From Points to Tokens: The Gradual Development Path of Blockchain Projects

In the blockchain industry, many practitioners believe that projects without tokens lack core value. However, for most blockchain projects, whether it is the design of token economics, the operation of exchanges, or the integration of technology and public chains, has not yet reached a sufficiently professional and mature level.

Moreover, the issuance and application of tokens face a complex regulatory environment globally. For startup teams to issue tokens directly not only brings significant compliance pressure but may also lead to operational loss of control. Therefore, a more prudent choice is to first incentivize users through a points system, and after the ecosystem stabilizes, gradually convert the points into tokens and migrate them to the Blockchain for assetization.

The Value of Points: From Incentives to Transition

The advantage of the points system is that it provides a low-cost tool for projects to validate the market while avoiding legal risks during the early stage of token issuance. Through points, the team can provide rewards to users within the application, enhancing user stickiness and activity. As the points mechanism matures, it can be tokenized, giving it more value and enabling on-chain circulation.

This model not only enhances the operational flexibility of the team but also builds user trust and ecological foundation through points, laying the groundwork for the future Token economy. For example, a blockchain platform that focuses on community autonomy incentivizes users to vote and participate in governance tasks through points, and after stabilizing the points system, it introduces on-chain Tokens, allowing users to more intuitively perceive the value and role of the Tokens.

Take HashKey Group, which recently issued tokens, as an example. The group was established in 2018 and is a leader in the field of digital asset financial services in Asia. The group is known for its comprehensive Web3 ecosystem layout, covering multiple core areas such as trading, investment, tokenization services, and infrastructure. Its main businesses include two trading platforms, one of which is Hong Kong's first licensed virtual asset exchange, providing users with compliant and secure trading services; the other caters to global users, offering diversified digital asset trading services and holds a Class F license from the Bermuda Monetary Authority.

HSK is the core Token of the HashKey ecosystem, designed to support its vast business network and enhance user participation. The total supply is fixed at 1 billion coins, and HSK is launched through a private distribution method, avoiding the legal and compliance risks that may arise from public sales. This distribution method directly links the value of the Token to the activity level of the ecosystem, making it more sustainable. In practical application scenarios, HSK is endowed with multiple functions. Within the exchange, HSK can be used to pay platform fees and provide holders with discounts on trading fees, significantly reducing trading costs. Additionally, as a core tool for community incentives, HSK promotes user participation in ecosystem construction through various reward programs, increasing community activity. Users holding HSK can also gain priority access to new products and services, further enhancing user experience. This diversified application design makes HSK not only a functional Token but also a key driving force for promoting collaborative development within the ecosystem.

The HASHKEY token issuance model and application scenarios provide valuable experience references for startup teams. In their token issuance and promotion process, they adopted the following strategies:

1. Ecological Incentives and Distribution

HASHKEY's Token was not distributed through public sales, but rather through internal ecological incentive methods. This model avoids the risk of violating securities regulations, while effectively expanding the base of Token holders through the reward mechanism.

2. Task-driven Airdrop

Users earn Token rewards by completing specific tasks. This method not only enhances users' sense of participation in the ecosystem but also promotes community activity and brand dissemination. For example, HASHKEY once rewarded Tokens through ecological activities to encourage users to share and promote ecological content.

3. Combination of Business and Technology

HASHKEY's Token incorporates various functions in practical applications, such as participating in governance, paying transaction fees, and exchanging for ecological services. This token economic design not only aligns with business logic but also promotes the in-depth application of Blockchain technology in the financial sector.

This progressive model of converting points into tokens not only allows HASHKEY to avoid unnecessary compliance risks but also enhances users' trust and loyalty towards the project.

A Win-Win Path for Compliance and Business Verification

The path from points to tokens is not only the key to the legalization of the project but also a necessary step for commercial validation. As Web3 entrepreneurs, if token issuance is part of your future roadmap, starting with points might be a more suitable development path. We can analyze this specifically from the following four aspects:

1. Market Validation of User Incentives

Whether it is traditional centralized points or future-oriented decentralized project tokens, the core issue to be solved is the user acceptance problem. The core value of early point systems lies in providing project parties with a low-cost market testing tool. Through point reward mechanisms, teams can observe user acceptance and stickiness towards the project. For example, an application that focuses on decentralized knowledge sharing can design point reward rules: users upload high-quality content to earn points, and additional points can be rewarded if the content is liked or bookmarked. This approach not only attracts early users to participate but also accumulates project data, providing a real basis for subsequent tokenized economic models. Additionally, point consumption data reflects users' preferences for different payment services. This market validation not only enhances operational efficiency in the early stages of the project but also indicates the direction for subsequent tokenization design.

2. Choosing the Timing for Tokenization

Pragmatically speaking, tokenization is a natural extension of the points system's development, but the timing of its implementation needs to consider the user base, ecological construction, and technological readiness. Initially, users are incentivized to participate in minting and trading through points, and after the points system matures, a gradual transition to tokenization occurs. This strategy effectively avoids issues of token oversupply or user loss caused by "incomplete technology and unestablished ecology." For example, a certain NFT project achieved a daily trading volume of over one million dollars on the first day of its token launch, one year after its points system was operational. This timing in tokenization provides important lessons for startup projects.

3. The Balance Between Compliance and Financing

Many teams mistakenly believe that tokens are the only tool to attract investment. In fact, financing models can be more flexible. For the vast majority of blockchain startup teams, it is entirely possible to obtain funds through equity financing in the early stages. Based on this, if there is a future need for token issuance, both parties can clearly stipulate in the shareholder agreement that when the project reaches a specific stage, a certain proportion of tokens will be allocated to investors. This approach meets the funding needs of the team while avoiding the compliance risks of direct token sales. In addition, many startup projects introduce qualified investors or investment funds by establishing overseas companies such as Hong Kong or Singapore (, while also using a points reward mechanism to increase user stickiness. This ensures compliance in financing and enhances project valuation through the verification of user data and business scenarios. This approach meets the funding needs while avoiding compliance risks of early token sales.

4. Technical and Application Linkage Verification

The linkage verification between technology and business scenarios is the key to the success of project tokenization. For example, a blockchain project focused on green energy trading initially incentivized households to upload electricity usage data and energy-saving measures through points, accumulating a massive energy data pool. During the technology verification phase, the platform exchanged points for environmental tokens, integrating off-chain energy data with on-chain smart contracts, completing the transition from points to tokens. The advantage of this model is that points not only serve as a user incentive tool, but also provide real-world scenario data in technology application testing, helping the team identify issues and adjust strategies. After multiple rounds of model adjustments, a public risk pool was officially established through tokens, significantly reducing the risk of failure after launch.

By implementing the above strategy, the team can not only steadily advance the project's compliance but also effectively verify its commercial value and user demand, laying a solid foundation for the future Token economy.

Summary

From points to Tokens, it is not only an evolution of a business model but also an entrepreneurial path that combines market validation and compliance innovation. In the context of an increasingly complex global regulatory environment, startup teams should abandon the illusion of "one-step-to-success" token issuance and adopt a gradual strategy, starting from points, accumulating data through market validation, optimizing mechanisms, and then transforming successful experiences into asset-based applications on the Blockchain.

This "progressive tokenization" model not only reduces the legal risks in the early stages of the project but also makes the validation process of commercial value more natural and efficient. Blockchain entrepreneurs can only find their breakthrough in a complex and changing market environment by continuously experimenting and optimizing within a compliant framework. Internet entrepreneurship emphasizes taking small steps quickly, but in the exploration of the blockchain field, steady progress may be the true meaning of "fast."