How’s that Starbucks card filling up? One stamp left since 2005? Never bothered? I’m in the latter category. I just can’t seem to find a good mode of loyalty that suits me and it annoys me. When I set up Solo Wallet, I had this front and centre of my mind—I want to be loyal to anything, easily. The metaverse is coming, some say it’s already here and this presents the strongest potential to create new forms of economic and social interaction. In such a world, traditional models of economy and loyalty must be adapted or reimagined. This has to happen, but how will it work? And who will make it sweet?
You Might Win Something
Traditional loyalty programs are marketing tools used by businesses to encourage repeat purchases from their customers. These programs work by rewarding customers for their loyalty, usually through a points-based system. From the sign-up to the promotions everything is flawed in this new way of connecting.
Here’s how:
The Sign up: Customers can sign up for the program for free by providing their name, email address, and sometimes additional information like their phone number or address. It sucks to be you when these marketing corps know how to trade on your personal information. Is that the only currency you have? No! That’s rude. Your hard earned cash is the currency you have. If you are still doing this to get that, go now, leave, RUN!
What do points make? Members earn points for every purchase they make at the business. These points can be based on the amount of money spent or the number of products purchased. The tricky part is in the language used. It’s too easy to say “we will give you stuff”, it’s easier, much easier to go the whole hog and surmise what we might get. That spend a penny to win a pound thing never really dies.
The great redeemer: Members can redeem their points for rewards such as discounts, free products, or other perks. The number of points required for each reward varies. In my pet food supplier-of-choice website, I never seem to have just enough points for a packet of flat peas. This really pisses my bunnies off. “Why don’t you spend more money on delivery next time, mum?” Why indeed.
More of the same, but different: Some programs have a tiered system where customers can earn additional benefits or rewards as they move up levels based on the number of points they accumulate. For example, a basic level might offer a 5% discount, while a higher level might offer a 10% discount and additional perks like free shipping. Again, I refer to the wisdom of Dave and Seon-hye, my two 7 kilo Flemish giants for this one. Yes I am a dick for not falling into the trap clearly laid out for me.
The one where you don’t win: Some programs offer additional ways to earn points, such as special promotions or referral bonuses. Like the first point of signing up or on (unless it’s my glorious newsletter) there is absolutely nothing to do here. This is akin to selling Aloe Vera juice or dildos—though not together.
You+Your Data=You
I’m fascinated by economy and loyalty models. I’m a complete thicko for ever being a designer or writer in the games industry or a supposed architect of the metaverse because well, finance thinkers and doers get paid more, much more than us mere crayon eaters. I’m passionate about virtual and digital currencies though, of all kinds. From the humble Gil to the mighty Bitcoin, I think there’s a place for all of them in the metaverse. Digital currencies, such as Bitcoin or Ethereum, could be used as a medium of exchange in the metaverse, allowing users to buy and sell virtual goods and services. Additionally, blockchain technology could be used to create a decentralised economy, where users are rewarded for contributing to the ecosystem, and where ownership and control of assets are distributed among the community. Then there’s DAOs with all that public policy stuff which is being created on the fly; I’m not too into that right now, but it does follow the economic and loyalty principles that I feel need a closer look.
But back to my guilty pleasure: virtual currency. Literally, how in the hell are we going to make this work? I just looked in my Metamask wallet (I really don’t like Metamask) and there were fragments of dumb purchases with weird currencies. Why did I do this? Because the metaverse made me do it. I can’t buy in Decentraland unless I have MANA, The Sandbox=SAND, The Otherside=APE, the list goes on. And if these metaverses were fully functioning metaverses where the commerce mechanics were set up as they are IRL, then there wouldn’t be a problem. Whilst I appreciate that we’re in some strange holding pattern where we’re both ready and not quite ready to accept that virtual world travel is a bit like going from my desk in Switzerland, to say, a bar in Malaysia I would be very honest and say that most of these currencies are utility-backed but only through use-cases in their worlds and we’re just gonna have to get more savvy here because when game currencies come, and they will, it’s goodbye yellow brick road.
Virtual game currencies have already become an important part of the tech economies of the present, and are likely to continue to play a significant role in the future. Here are some examples of how virtual game currencies may be used in the tech economies of the future:
Unify! As more games and virtual worlds are created, players may be able to use the same virtual currency across multiple games. This would create a unified virtual economy, where players can earn and spend currency in a variety of different virtual worlds. The cryptocurrency platform Enjin is working on creating a cross-game virtual currency that can be used in a variety of different games and virtual worlds.
Secondary market magic. Virtual game currencies may also become more closely linked to real-world value, and could even become a form of investment. Remember World of Warcraft? Well it’s definitely still a thing and players can earn gold by completing in-game tasks, and then sell that gold to other players for real-world money. This has created a secondary market for virtual currencies, with some players making significant amounts of money by buying and selling virtual goods.
DeFi the laws of Ca$h. Virtual game currencies may also become more decentralised, with blockchain technology being used to create virtual currencies that are not controlled by a single entity. This would allow for greater transparency and security, and could also create new opportunities for developers and players to earn rewards. Decentraland uses its own cryptocurrency, MANA, which is built on the Ethereum blockchain and can be used to buy virtual real estate and other goods within the game, but as I said, right now, this is limited and it’s not guaranteed either.
Game On! Virtual game currencies may become the basis for entire virtual economies, with players earning a living by creating and selling virtual goods and services. For example, the game Second Life has a thriving virtual economy, with players earning real money by creating and selling virtual clothes, buildings, and other items.
Virtual game currencies are likely to become an increasingly important part of the tech economies of the future, as more games and virtual worlds are created and as blockchain technology becomes more widespread, but it has to do that. We can have this stupid pump and dump mentality. We need people who understand that currency is something that only works if it lasts and these fly-by-night coins are just a big bag of crap currently.
Interoperability and the Laws of Attraction
Interoperability for economies related to technology is a concept focused on the ability of different economic systems to communicate and exchange value with each other seamlessly. In other words, interoperability enables different economic systems to work together, creating a unified economic ecosystem that can be more efficient and beneficial for all participants.
In tech, interoperability can be applied to various economic systems, including virtual currencies, online marketplaces, and digital payment systems. It’s not just for avatars and LinkedIn flexes you know! Did you know that interoperability can allow users of different virtual currencies to exchange value with each other, or allow sellers on different online marketplaces to accept payments in a variety of different currencies? You didn’t? Why not? This is a web2 kind of thing which has had the edges filed off.
Interoperability should not be so hard to implement in this space. It can be achieved through various means, such as the use of common standards or protocols that enable different systems to communicate with each other. Here’s one: blockchain technology. And we all know that blockchain can be used to create a common framework for different virtual currencies, allowing them to be easily exchanged with each other. Simples. Imagine what that will do to one world and open policy agreement for things like sureties and insurances?
Please tell me you have heard of the Open Banking initiative? This enables different financial institutions to share data and services with each other in a secure and standardised way. This initiative has enabled greater competition and innovation in the financial sector, as well as better services for consumers. Again, another win for interoperable finance. Universal banking and open banking initiatives can play an important role in creating an inclusive world by increasing access to financial services and promoting greater competition and innovation in the financial sector. We love inclusivity. Ok, I’m in the minority here because I look around and I see elitism in finance everywhere, not just in the decentralised finance sector. And this is not ok. Why would you create a new world which has exactly the same old mistakes in it?
Universal banking is a concept that refers to the provision of a full range of financial services by a single financial institution, including services such as savings, loans, investments, and insurance. By offering a wide range of services, universal banks can provide greater convenience and accessibility to customers, especially those in underserved or remote areas.
The tech economy needs this. It does. Stick your AI as far up as the sun stops shining because finance, decentralised or however you want it, keeps the lights on. Not only that; it enables greater collaboration and integration among different economic systems, leading to more efficient and effective use of resources, and better outcomes for all participants. How else might we rethink finance, banking and the like for this new decentralised world?
Access: Universal banking enables customers to access a wide range of financial services from a single institution, which can be especially beneficial for underserved populations who may have limited access to financial services. Open banking initiatives can further increase access by allowing customers to access a wider range of financial services and products from multiple providers.
Literacy: Universal banks can play an important role in promoting financial literacy by offering educational resources and guidance to customers. Open banking initiatives can also promote financial literacy by providing customers with more information about their financial options and enabling them to make more informed decisions.
Innovation: By opening up financial systems to third-party developers and services, open banking initiatives can promote greater competition and innovation in the financial sector. This can lead to the development of new products and services that are more affordable and accessible to a wider range of customers.
A Culture of Freedom
How about a reputation-based system? We have that already in web2 where sites like Ebay and Stack Exchange get the community to rate you. In the metaverse perhaps that model works? Users earn rewards for contributing positively to the community. Think about the ways a user who creates popular virtual goods or services could earn a higher reputation score—this could lead to increased visibility or preferential treatment in the marketplace. Additionally, users who participate in community events or contribute to the development of the metaverse could earn rewards or recognition. That’s gamification to some extent and does show the sticky side of what gamification can do when placed in the correct space.
The social factor is BIG. No. Think bigger because social connections allow users to earn rewards or benefits for referring friends or building a network of followers. Could this be similar to how referral programs work in traditional e-commerce or social media platforms? Yes but without added data capture. Perfect!
How about those tiered systems from before? Many video games use a tiered system to reward loyalty, where players can earn additional benefits or rewards as they progress through different levels or ranks. This can be applied to web3 loyalty systems by creating different levels of rewards or benefits based on the amount of engagement or participation from the user. In games this is natural, so, if you can loop it or gamify it, you should!
Remember how Travis Scoot pulled all those users into Fortnite? Video games and metaverses often host special events or promotions that offer unique rewards to players who participate. These events can create excitement and motivate players to engage more with the game. BUT IN THE METAVERSE THEY DON’T. Largely because these gods of the new age, aka the platform creators and CEOs are lazy as hell. Their *if you build it they will come* ethic is about as tired as old knicker elastic. Web3 loyalty programs should create special events or promotions that offer unique rewards or benefits to users who participate, but they don’t and this shows how much they care about you.
NFTs have finally become popular as a way to reward players with unique, collectible items. Web3 loyalty programs can use NFTs to reward users with unique, collectible tokens that can be traded or sold on blockchain marketplaces. But use these things as a pivot towards loyalty rather than a shill.
Many video games allow players to share their progress or achievements on social media platforms, which can help to build a community around the game. Web3 loyalty programs can incentivise users to share their progress or achievements on social media platforms by rewarding them with additional benefits or rewards and it’s all part of the loop baby! You do this to get that and you keep doing it and you tier up and you do more and before you know it, you’re the queen of everything!
Challenges and achievements work similarly. The challenges or achievements on offer reward players who complete them. Loyalty programs in web3 can offer similar challenges or achievements that reward users for engaging with the platform or completing certain tasks.
The next time to assess ways that you will be the most successful at finance, loyalty and reward systems; think about hiring a game developer. Even better, talk to me! At Solo Wallet, these are all the things we’re doing to make life really simple but also really rewarded. From minting NFTs to visiting your local supermarket, this shouldn’t be a one app for this, or one app for that approach. This has to be easier or we will never advance. If you want to stay where you are, fine, but I don’t want to. I want to be free of all this data, I want to make data something that I control not something that controls me. So if the only way to do it is to make myself; you can bet that I will—and you should too.