Introduction

New projects have adopted the point system to incite user engagement, foster loyalty, and create a buzz around them. However, this came with its own set of problems due to strict criteria and whale domination of such platforms. Secondary marketplaces were created to solve these issues. However, they involved issues like collateral requirements and other barriers limiting users from utilizing their points.

In a bid to solve these issues, Rumpel offers a point-transforming platform that allows users to sell points, exposes them to more investors, and gives protocols a platform to gain more users.

What are Loyalty Points?

Loyalty points are points issued to users as a means of rewarding user behavior, promoting loyalty to the platform, and to foster trust through regular use of the product or service. Loyalty points have become an important part of the crypto industry, as platforms have adopted the system to enhance the onboarding of users into the protocol before the launch of the platform’s tokens.

With loyalty points, developers are able to guide users and incentivize interaction with the platform. By doing this, the platform is able to properly reward users who contribute liquidity by performing specific tasks for the protocol at specific points in time.

What is Rumpel?

Source: Official website

Rumpel is a protocol that turns off-chain loyalty points into tradable tokens, creating an active market where these tokens can be bought and sold. By doing this, the platform is able to offer users a better experience by providing them with a robust infrastructure for trading points.

Through this technology, token farmers can sell their earned points, investors are given more exposure, and the protocol can prove its financial value. This ultimately creates a flexible system that meets the platform’s stakeholders’ needs while curbing existing platforms’ financial limitations.

History of Rumpel

Rumpel was launched on September 13, 2024, on the Ethereum mainnet. However, it was born from a previous project called Sense Finance. Sense Finance was created to provide fixed lending rates and yield trading; however, a vision change led the protocol to grow into an advanced financial tool incorporating dynamic reward mechanisms and user liquidity incentives.

The Rumpel protocol is led by Kenton Prescott and Josh Levine, who are also the co-founders of Sense Protocol, which ran from 2021 to 2023. The two have a rich history working together as software developers at MakerDAO and have utilized their skills to create user incentivization mechanisms.

How Does Rumple Work?

source: alearesearch.io

Rumpel is a protocol that converts off-chain loyalty points into tradable tokens, creating liquid secondary markets for these tokens. To provide these services, Rumple consists of several components that work together to ensure point tokenization and incentivization.

To use the platform, users need to collect tokenized points (pTokens) and store them in the Rumpel wallet. This wallet holds pTokens earned through staking, trading, and lending. The Rumpel Oracle then verifies the earned pTokens, allowing users to mint them based on their loyalty points. Once minted, these pTokens become ERC20 tokens that can be traded, sold, or saved for later use.

Rumpel App

The Rumple App is a hub for users to connect their wallets and make use of their loyalty points however they wish. The platform offers users three main functions: Earn, Mint, and Trade.

Earn

Source: Rumpel App

With the earn feature, users can apply different strategies to their points to earn extra income. There are different strategies for different tokens, which give different Annual Percentage Rates (APR). These strategies include providing liquidity, lending, and borrowing to make best use of the deposited asset. For example users can deposit weETH, borrow against it, and then reinvest in order to amplify their returns.

MInt

Source: Rumpel App

With Minting, users can deposit their points for a certain period to accrue rewards and extra yield. The platform tracks the off-chain balance and updates the on-chain allowance at a specified time weekly.

Trading

Source: Rumpel App

This allows users to trade and earn from their tokenized points by selling them in the marketplace. With the trading feature, users can also provide liquidity to earn added and stake their assets for added rewards.

Features of Rumpel

Rumpel consists of several components that ensure users can earn, manage, and do much more with their loyalty points. These platform-tuned features include the Rumple Wallet, Rumple Oracle, Rumple Vault, and Rumple Straws.

Rumpel Wallet

The Rumpel Wallet is a solution designed to assist users in earning, managing, and tokenizing their loyalty points. Users can securely store their points within the wallet, which the Rumpel Oracle verifies. This process allows users to mint pTokens by their accumulated points, allowing them to trade their pTokens on any secondary market of their choice.

To ensure malicious users can not tamper with the system, the Rumpel Wallet uses the Rumpel Guard to prevent users from claiming rewards for already tokenized and sold points. This is possible by limiting actions to only those points that have been validated, ensuring only permitted transactions can be carried out in the wallet.

The Rumpel Guard is managed by an admin who is in charge of authorizing certain actions such as function calls and transfers. The admin can place certain actions to be permanently allowed to ensure users have access to certain essential features, fostering enhanced trust and transparency.

The wallet uses the Rumpel Model to automatically reward users. It helps them claim and transfer reward tokens to the Rumpel vault for Point Token redemption. This process is securely done, ensuring that users’ reward tokens don’t stay dormant in their wallets.

Minting

Source: rumpel-docs.gitbook.io

The Rumpel protocol also has a minting mechanism that allows users mint their tokens to earn points. All the user has to do is deposit their capital through their Rumpel wallets. Once the wallet receives the points, it monitors the off-chain balance of the points from their respective platform and updates the onchain point minting allowance for the Ptoken seller.

Once completed, the pToken seller can then Mint their pToken and sell off their point tokens to point speculators on the other side of the market looking to buy.

Burning/Redemptions

Source: rumpel-docs.gitbook.io

Rumpel has a token burning system that allows users to burn and redeem their pTokens for the underlying tokens. This happens when the protocol announces its airdrop for point holders and then sends the allocation to a claim contract. Since the pToken sellers have no points to mint and sell, they can now withdraw their capital.

Rumpel then claims all reward tokens on the users behalf and sweeps them into the vault before pToken holders can redeem their pTokens for the underlying tokens.

Rumpel Oracle

The Rumpel Oracle is the Rumpel Wallet verification system that ensures safe and secure minting and redemption of pTokens within the Rumpel Vault. It also links off-chain loyalty points with their corresponding on-chain representatives. It achieves this by gathering, validating, and converting off-chain data into actionable updates.

It also reduces errors and improves security by distributing pToken minting allowances through a Merkle root every three to five days. This delay ensures the safety of the system, making sure there are no mistakes in the data.

Several distinct Oracle clients operate the Oracle system. This allows the platform to negate issues that may arise if a part of the action fails. It also ensures that the integrity of the platform stays the same even if one client encounters difficulties.

Rumpel Vault

The Rumpel Vault is in charge of all things regarding minting and burning of pTokens. It works together with the Rumple Oracle to ensure that the point balances and reward mechanisms are both in sync. It does this by updating the redemption logic of the system whenever a protocol that issues points announces an airdrop.

The platform then acts on behalf of the user to claim all possible reward tokens from the project’s airdrop before securely transferring the rewards into the vault. This ensures that the user capital is not tampered with at any point and allows the user to redeem their tokens for the airdrop rewards.

Redemption RIghts

Several programs have different vesting schedules, with some having more complex schedules than others. These vesting schedules are implemented by platforms to govern who, when, and how users can redeem points, restricting users seeking to redeem points immediately.

While many programs do not make use of redemption rights, a few programs with staggered or conditional vesting schedules do to ensure fair distribution of tokens. Rumpel is able to ensure fair distribution through the use of Merkle roots and proofs to restrict how many pTokens can be redeemed at any point by the user.

To do this, the platform follows certain vesting scenarios:

• Vanilla Vesting: Here all users are to follow the same vesting schedule.
• Whale Vesting: Here only users with large stakes in the program (Whales) have a vesting schedule.
• Minimum Balance Vesting: This requires whales to maintain a minimum balance of the asset in order to receive their vesting rewards.

Fees

An added feature of Rumpel is its zero protocol fees policy, allowing users to carry out transactions without worrying about other costs. However, there is a protocol fee switch on minting and burning point tokens on the platform.

Rumpel Straws

Rumpel Straw is a feature designed to reward users who contribute to the growth of the Rumpel platform. Users are rewarded with straws that indicate their contribution to the protocol’s development. These rewards are distributed based on two chapters.

The first chapter was released at the protocol’s launch in September 2024 and ended on the 1st of December 2024, rewarding users through token emissions and private allocations. Meanwhile, the second chapter released in December 204 and set to end in March 2025, involved rewarding users based on sustained momentum and user participation.

Rumpel Point Tokens: pTokens

Rumple Point Tokens (pTokens) are digital assets used to represent off-chain loyalty points earned by users and linked to possible future rewards. These tokens maintain a standard 1:1 ratio with the original points and are accepted as an ERC20 token, enabling seamless integration with other DeFi protocols.

To obtain pTokens, users first have to earn loyalty points on their Rumple wallets. The loyalty points are then validated and minted by the Rumpel Oracle, allowing users to mint their pTokens against their accumulated points. Once this is done, users can then trade their pToken on DEXes, limiting the issues involving future airdrops.

Furthermore, other users can purchase pTokens to earn certain projects’ loyalty points without having to go through the rigorous process required to earn them, further creating more liquidity for the points.

Rumpel Vs Other PointFi Projects

While Rumpel is making waves in the PoinFi market, there are other projects with their unique solutions to optimize reward points in the blockchain ecosystem.

Rumpel vs Whales Market

Whales market provides a platform for pre-token liquidity, allowing users to trade points before the token distribution takes place. Users can list their accumulated points for sale, and interested buyers can negotiate the price they would like to pay for the points.

Unlike Rumpel’s automated liquidity system which allows users to trade their points without waiting for a third party, Whales Market’s point market requires a buyer to match the seller’s offer, limiting liquidity to the user’s demand.

Lastly, Rumpel supports a plethora of blockchain reward points, giving users access to different ecosystems. Meanwhile, Whales Market’s point market focuses on specific point systems like EigenLayer points, Ethena points, and other similar systems.

Rumpel vs Pendle

Pendle’s point reward system is designed to allow users to stake their assets in exchange for reward points for specific projects. Unlike Rumple, it requires users to lock up assets for a period to earn points, eliminating immediate liquidity for the user.

Conclusion

Rumpel is creating new value for loyalty points by converting them into tradable on-chain assets. It provides point farmers with more liquidity through its ecosystem of services that ensures security, transparency, and ease of use. These features make its uses beneficial to farmers, investors, and platform developers, making it a project to look out for.