# What is Rumpel?

Rumpel is a point tokenization protocol. It enables secondary market liquidity and price discovery for offchain loyalty points, unlocking new opportunities for point holders, traders, airdrop hunters, and point issuers.

### What are Web3 points?

Loyalty points have emerged as the golden thread in growth strategies across the crypto landscape. They serve as a crucial mechanism to reward early adopters, incentivize specific behaviors, and foster loyal communities. In Web3, points offer significant unique advantages, including day-one incentives, enhanced agility, and optimized token generation event (TGE) timing.&#x20;

Instead of obfuscating airdrop criteria, [teams can leverage pointenomics](https://mirror.xyz/kenton.eth/WLQ98TytJgxtdkcTevSlISbUKoFWex5Gw_TcW8u_SaY) to “line up” user participation in specific ways, prime new markets, and predictably expand across the ecosystem.&#x20;

Oftentimes, Web3 points have a claim to a future airdrop.

### What are the problems?

But users are upset with the state of Web3 points. Large point earners are feeling farmed because they can’t lock in a profit before an airdrop. Small point earners feel helpless and can’t “catch up” on point stacking; additionally, some users struggle to get exposure to a project's potential. Both issues cause user apathy, making it difficult for projects to incentivize growth.

### How does Rumpel solve these?

Rumpel solves these issues by tokenizing points, allowing them to trade on a secondary marketplace.

With Rumpel, users get liquidity and access to new markets, and projects keep the flexibility of their point programs.

### Does Rumpel take a protocol fee?

While there’s a protocol fee switch on [minting](../how-does-rumpel-work#minting) and [burning](../how-does-rumpel-work#burning-redemptions) point tokens, there are currently _zero protocol fees_. If Rumpel decides to enable this fee, it will notify its users well in advance.

<figure><img src="https://1867312591-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FpufmDi4GX1YNAMUXZqqn%2Fuploads%2F72E8fkxiQ16zigpNP68Y%2Fimage.png?alt=media&#x26;token=8ac104dd-02cf-4602-a929-f0861af14b96" alt=""><figcaption></figcaption></figure>

## Simple Point Token Lifecycle

At the heart of the Rumpel ecosystem are [Rumpel Point Tokens](../how-does-rumpel-work#point-token). Let's walk through their lifecycle:

1. Alice begins points _through_ her [Rumpel Wallet](../how-does-rumpel-work#wallet), a specialized 1-of-1 Safe multisig
2. ⌛ (Some time passes as points accrue to Alice's Wallet) ⌛
3. The [Rumpel Oracle](../how-does-rumpel-work#oracle) pushes an update to her minting allowance
4. She / the [auto-sell](benefits-and-how-to-guides/selling-points/auto-sell "mention")er mints Point Tokens against the points owned by her Rumpel Wallet
5. With points in token form, Alice /  the [auto-sell](benefits-and-how-to-guides/selling-points/auto-sell "mention")er now sells them through Univ3 for any asset, such as ETH, DAI, etc
   1. Value: Alice can now reduce her point exposure at a competitive, fair market price
6. Bob wants to buy points, so he buys Point Tokens from Univ3
   1. Value: Bob can now easily increase his point exposure without needing the same capital requirements
7. ⌛ (Some time passes) ⌛
8. Point issuer announces an airdrop and conversion from points to their native token
9. Rumpel converts its points for reward tokens and holds them for Point Token holders to redeem
10. Bob redeems his Point Tokens for his share of reward tokens

