Hey so how does this actually work? I love the idea of this in theory but I’m trying to work it out-- Interoperability + Loyalty sounds contradictory to my millennial mind. If I can take from Bob Corp and then profit off of that on the AliceDEX then I don’t quite see how that factors into “loyalty”.
Companies’ points systems are often somewhat arbitrary and built off of annoying percentages which is why we don’t bother to engage with them. But in this case, wouldn’t companies need to “work together” in order to determine some relative value of their tokens? Are people just selling them on secondary markets? No, because you mention interoperability. In what specific cases could loyalty points be interoperable between companies?
How would these points translate into “real world” value?
This seems like it’s the future but I’m just trying to piece it together.
Hi TM, thanks for your comment. Yes companies would need to work together. For example, brands could set up a marketplace for customers to exchange their loyalty tokens based on a pre-determined exchange rate. In addition, NFT transactions would generate a royalty fee for each brand. Web3 enables more collaborative, mutually beneficial partnerships through smart contracts, which handle most terms (e.g exchange rate, revenue splits for NFT transactions or for co-marketed products sold on-chain). Anything that can't be enforced on-chain can be addressed through traditional agreements and in cases of a long term partnership formation of a joint venture.
In a web3 co-marketing campaign example, Starbucks and Uber could make their loyalty tokens interoperable. Starbucks token holders could then exchange their tokens for Uber rides, adding real-world value to these digital assets.
We just published an article on interoperable loyalty and have previously covered the utility of brand reward tokens:
Hey so how does this actually work? I love the idea of this in theory but I’m trying to work it out-- Interoperability + Loyalty sounds contradictory to my millennial mind. If I can take from Bob Corp and then profit off of that on the AliceDEX then I don’t quite see how that factors into “loyalty”.
Companies’ points systems are often somewhat arbitrary and built off of annoying percentages which is why we don’t bother to engage with them. But in this case, wouldn’t companies need to “work together” in order to determine some relative value of their tokens? Are people just selling them on secondary markets? No, because you mention interoperability. In what specific cases could loyalty points be interoperable between companies?
How would these points translate into “real world” value?
This seems like it’s the future but I’m just trying to piece it together.
Hi TM, thanks for your comment. Yes companies would need to work together. For example, brands could set up a marketplace for customers to exchange their loyalty tokens based on a pre-determined exchange rate. In addition, NFT transactions would generate a royalty fee for each brand. Web3 enables more collaborative, mutually beneficial partnerships through smart contracts, which handle most terms (e.g exchange rate, revenue splits for NFT transactions or for co-marketed products sold on-chain). Anything that can't be enforced on-chain can be addressed through traditional agreements and in cases of a long term partnership formation of a joint venture.
In a web3 co-marketing campaign example, Starbucks and Uber could make their loyalty tokens interoperable. Starbucks token holders could then exchange their tokens for Uber rides, adding real-world value to these digital assets.
We just published an article on interoperable loyalty and have previously covered the utility of brand reward tokens:
https://magiclabs.substack.com/p/transforming-grocery-loyalty-programs
https://magiclabs.substack.com/p/brand-reward-tokens-the-new-asset
I also recommend reading this article on competition in the Web3 space: https://rohanhanda.me/blog/thoughts-on-competing-in-web3