November 13, 2023 - 7 min read
POAP, or Proof of Attendance Protocol, is a method of proving that someone has attended an event by allowing them to mint a specific NFT. POAPs were first created in 2019 at the ETHDever convention to track hackathon participants and, in the last few years, have become increasingly popular, with some POAPs being considered collectibles in their own right.
In addition to generating cryptographically verifiable proof-of-attendance for real-world events, POAPs have also become popular in the metaverse. For instance, the popular NFT land game Decentraland sends POAPs to users to register and record their attendance at in-game parties and other virtual events. POAPs are also increasingly being used by DeFi dApps (like SushiSwap), Layer-1 and Layer-2 blockchains, and even by traditional companies and events, like FOX, the U.S. Open, and TIME Magazine.
According to the official POAP website, as of mid-to-late 2023, over 6.7 million POAPs have been minted by over 37,000 unique issuers, with an average of 39 new POAP drops per day.
POAPs were initially specialized ERC-721 NFTs minted on the Ethereum mainnet. However, to improve scalability and reduce gas fees, in 2020, POAPs were transferred to MakerDAOs Ethereum xDAI sidechain. Every POAP has its own serial number, timestamp, and unique image.
While many POAPs operate digitally, directly via crypto wallets, some POAPs have a physical component requiring users to scan a QR code to send the POAP NFT to the user’s wallet.
POAP Use Cases, Explained
POAPs are currently used for functions including proof of event attendance, entrance into reward programs, and other purposes.
While POAP NFTs are currently fully transferable to other wallets, some have advocated for the creation of POAP Soulbound Tokens (SBTs). In contrast to traditional NFTs, Soulbound Tokens cannot be transferred from one wallet to another. This would provide an increased level of proof that someone has really attended an event and hasn’t just bought a POAP on an NFT marketplace or through a private transaction. It should be noted that SBTs use a different token standard, ERC-5114, which is a different standard than traditional ERC-721 NFTs or ERC-1155 dynamic NFTs.
Since many POAPs are used to directly reward participants for attending events, contributing to specific projects, and even giving DAO users additional privileges, the fact that POAPs can easily be traded means that individuals can take advantage of the system to gain rewards without actually attending events or contributing to projects. If POAPs are utilized for DAO governance or DAO member privileges, this could cause serious issues, as imposters would be able to “game” the system or even potentially impersonate other DAO members with their POAP.
In contrast, using SBTs for POAPs would ensure that the person who received the POAP did attend a specific event or take a specific action. However, using SBTs for POAPs does have one major downside– that these POAPs will no longer have any value as collectibles, as they cannot be traded on the secondary market. This could significantly reduce interest in POAPs.
However, regarding Soulbound Tokens and POAPs, things don’t have to be black and white. For instance, some POAPs could still use the ERC-721 token standard, while others could use the ERC-5114 SBT token standard. For example, general event attendance POAPs might utilize the transferable ERC-721 standard, while more specialized POAPs that grant highly valuable rewards or even DAO governance privileges could use the ERC-5114 standard. Theoretically, the same event or organization could issue both types of POAPs, each serving different and distinct purposes.
POAP has its own mobile application, currently available on both the Apple App Store and the Google Play Store.
Fortunately, creating a POAP is relatively easy and can be accomplished in only a few steps, including:
In addition to enabling individuals to create their own POAP drops, POAP also works with high-profile events, companies, and protocols to create customized POAPs and to help integrate POAPs within other applications.
As previously mentioned, POAPs have become increasingly popular among Web3, Web2 and even traditional, non-internet-focused companies. According to the POAP website, a few of the most popular organizations and brands that currently use POAPs include:
Unlike many blockchain and NFT protocols, POAPs are issued by a private company, POAP Inc. As previously mentioned, POAPs are NFTs that use the ERC-721 standard but utilize specialized POAP smart contracts. These smart contracts are currently governed and controlled by POAP, Inc., which POAP says helps make POAPs tamper-resistant. This means that POAP is a fully centralized protocol, which could lead to trust issues.
If POAPs become increasingly popular, the POAP protocol may decide to decentralize and divest control of POAP smart contracts (and the broader POAP ecosystem) to a DAO. This could lead to increased trust in the protocol and could also lead to more innovation, as new developers could contribute directly to the POAP ecosystem, bringing more functionality and enabling new POAP use cases.
While DAO governance promotes decentralization, DAOs do have their own governance issues– and many DAOs simply provide the appearance of decentralization while still remaining relatively centralized. To effectively decentralize and transition to DAO-based governance, POAP Inc. (or the theoretical POAP DAO) may have to issue fungible tokens, allowing token holders to vote on DAO proposals.
However, this may not be absolutely necessary, as current POAP holders could potentially be issued POAP Soulbound Tokens, which could enable a “one person, one vote” system that could be significantly fairer and more equitable than a “one token, one vote” system, which often means that just a few large whales effectively control a DAO.
While POAPs are only a few years old, they’ve caught the crypto world by storm and have only increased in popularity in recent years. POAPs are often considered the most advanced form of NFT ticket. However, unlike most standard NFT tickets, POAPs have a variety of other use cases, such as providing additional rewards to event attendees or providing POAP holders with DAO governance privileges.
As we’ve discussed, POAPs still have room for growth– and various changes, such as creating Soulbound Token/SBT POAPs, could increase the popularity and effectiveness of POAPs. In addition, decentralizing the POAP ecosystem to allow community governance and open-source developer contributions could increase trust in POAPs and lead to significantly more innovation and POAP functionality. While POAPs are a specialized use case for NFTs and serve a niche function, their effectiveness and popularity mean that POAPs are likely to only grow in popularity in the coming months and years.
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