Duolingo has replaced its hearts system with a new energy mechanic aimed at enhancing motivation by rewarding correct answers rather than penalizing mistakes. The new system allows users to start with 25 energy units for lessons, with the possibility of earning bonus energy for correct answers, presenting a more engaging approach to language learning while benefiting Duolingo's business model.

Gamification can significantly enhance user engagement and retention in products by incorporating elements like daily challenges, streaks, contests, leaderboards, and achievement awards. These strategies not only motivate users but also align their actions with business goals, creating a win-win situation. Understanding user needs and implementing appropriate gamified experiences can transform a mundane product into an enjoyable one.