Cryptorewards and NFTs: the future of loyalty programs

Do you know how NFTs and Crypto Rewards can help your brand? NFT is not such a new technology, but it can be very useful in building customer loyalty and bringing your company into a rising market

Having loyalty programs that focus on Crypto Rewards help the company take a next step in loyalty by offering more customized programs that offer exclusive rewards like NFTs.  

What is it and how does it work? 

To understand the concept of NFT, one must first understand the concept of fungibility. Imagine physical money or even cryptocurrencies - both are fungible goods, so they can be replaced by others of the same kind. A five-reais bill, for example, can be replaced by another five-reais bill. 

Non-fungible tokens (NFTs), on the other hand, are encrypted digital records of completely unique, irreplicable, and irreplaceable assets

Therefore, the buyer of an NFT receives two types of certificates: 

- one that proves the originality of the token, 

- and another that proves the fact that the buyer is the sole owner. 

Since NFTs are stored on the Blockchain, public access to the file and its duplication is prevented. In addition, both certifications are ensured by the security of the network and the cryptography of the block in which the NFT was registered. 

When did NFTs come into being?

The title of the first NFT in history is attributed to the Quantum artwork developed by Jennifer and Kevin McCoy in 2014, when the term NFT did not yet exist. The work was registered on a blockchain network with the aim of increasing the artists' source of income and the control they had over their work

In 2015, Etheria, the first game in NFT format registered in the Ethereum cryptocurrency blockchain, also emerged. The main proposal that the game offered users was the sale of NFT land in this virtual universe.

 As early as 2017, when the term NFT officially came into use due to the creation of the ERC-721 standard, other NFTs emerged, such as Larva Labs' CryptoPunks and the CryptoKitties game (based on Ethereum as well as Etheria). 

Why do NFTs go viral?

A quick search for the term "NFT" in Google Trends reveals the sudden growth the subject had on the search engine. Even as of 2017, when the acronym began to be officially used, there was no more than one search per day

But then, what made NFTs go viral overnight? You probably know the Nyan Cat, a video animation posted on YouTube that took over all social networks in 2011. 

In February 2021, almost 10 years after it was posted on the internet, Chris Torres (creator of the video) auctioned off a remastered version in NFT for 300 Ethers, the equivalent of $590,000 at the time. Since then, NFT has become the acronym of the moment

Throughout the year, other NFTs have generated news, debate, and trending topics. One example is Everydays: the First 5000 Days, a collage of digital images created by artist Mike Winkelmann under the pseudonym Beeple, which was auctioned for $69 million.

Another example is the Bored Ape Yatch Club (BAYC). Beloved by celebrities, the Bored Ape NFTs have sold for millions of dollars (today they have lost market value) and give access to a club with exclusive benefits.

Crypto rewards and program integration

In an increasingly competitive market full of new technologies, the traditional points programs have been left behind and are being replaced by more customized and complex dynamics. 

Today, loyalty is about creating unique, memorable, and personalized experiences. Understanding what the major trends are at the moment and applying them to your loyalty strategies will enable you to develop dynamics and rewards that customers really want, creating loyalty and true connections with your audience.

Blockchain is the key technology for developing loyalty programs that offer security, flexibility, and Customer Experience, promoting the best results for both companies and customers. 

It is expected that in the future users will be able to manage all their loyalty programs and therefore all their points in a single digital wallet. Companies can then create co-branding strategies for integrated rewards, provide usage options in the wallet itself, and enable the transfer of points between participants.

Companies can offer crypto rewards, i.e. rewards that are equivalent to NFTs or cryptocurrencies. Since Web 3.0 has decentralization as its main premise, this tends to be the basis of the economy in the new digital ecosystems. 

Also, since the purchase of NFTs and resources in the Metaverse occurs through cryptocurrencies, the use of cryptocurrencies will become more and more fundamental for users, which generates an imminent interest in crypto rewards. 

Because they are backed by the high cryptography provided by blockchain networks, all these practices have a security content that could never be offered in traditional loyalty programs. 

By offering crypto rewards or tokenizing the points, companies prevent any kind of fraud, such as repeated spending of rewards, and cyber attacks on their databases. In addition, transactional data can be captured and analyzed to offer better experiences without compromising customer privacy. 

All this security and flexibility offered by the Blockchain allows users to have more control over their rewards and trust the companies providing the programs, strengthening the loyalty relationships.

Learn more about how NFTs and Crypto Rewards in our e-book: How to build customer loyalty in times of Blockchain, NFTs and Metaverse

About Indico

Indico is a Brazilian Martech company with an experience that has reached more than 150 million customers in 9 countries, that develops solutions to combine Loyalty and Innovation creating unique connections between consumers and brands.

We create solutions that boost relationships and transform results. 

Disruptive campaigns, programs and projects that connect ideas, innovation, data and technology to engage, delight and retain customers. We generate data-driven insights and new opportunities, developing the customer experience with the brand. 

Contact us to find out how we can create more loyalty for your brand and boost your results!