Gamification is all about integrating game dynamics into your site or community in order to engage you members and encourage their participation.
The overall goal of gamification is to engage with consumers and get them to participate, share and interact in some activity or community. A particularly compelling, dynamic, and sustained gamification experience can be used to accomplish a variety of business goals.
At the most basic level, gamification of a social network is about earning rewards, points, levels and even cash awards for participating. It's is similar to an airlines frequent flyer program. The more you participate in the community the more points you earn. Members can use points to purchase store items or upgrade their personal space in the community. In many cases, if they do not have enough points members cane even purchase additional points to shortcut the process. In addition to earning points, a member's status is upgraded as they participate as well often giving them higher levels of prestige within the community.
How do members earn points? Well that's really up to you. Members can earn points for joining, picking or uploading a new avatar, inviting friends, adding pictures or videos to their space, commenting on or sharing information from the community through other social networks, by buying store items, watching videos and even by just visiting once a day.
As members advance they are encouraged to participate at higher levels, maybe as a blogger, moderator or store operator raising their status and visibility in the community even more. In many instances members have risen to "rock star" status and even launched book deals based on their expertise in the subject of the community.