The number of blockchain loyalty rewards programs has grown significantly in recent years as the Web3 and decentralized application (DApp) sectors mature. However, young adults, the most coveted consumer demographic, appear to prefer a participatory monetization paradigm with a focused ecosystem.
Statistics show that over the past decade, most Web3 and cryptocurrency products have seen their engagement peak during periods such as airdrops or other limited incentive windows. While there are numerous exceptions, most projects that fail to gain consumer traction in the first few months after launch tend to trend poorly.
Loyalty Program
The self-sustaining economy of providing incentives to consumers has existed since the advent of money and competition. From earning airline miles on credit card purchases to earning gift cards with Microsoft’s paid search incentive program, there’s little that businesses haven’t tried when it comes to customer retention programs.
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However, implementation across the blockchain and Web3 communities is sporadic and inconsistent in a fragmented ecosystem. Many projects focus on cryptocurrency rewards that can be cashed out upon receipt, reducing the incentive to reinvest those funds, while others focus on rewards that exist only on the platform where they are earned.
But in a recent roundtable discussion hosted by The Street’s Rob Nelson, a panel of insiders including Paul Mikel, CEO and President of REVO Ride Share, Scott Lomu, CEO and President of Element United, and influencer Paul Cuffaro singled out tokenization and rewards as key drivers for blockchain adoption.
Web3 workforce distribution by job type. Source: Consensys
The group discussed the potential for blockchain technology to act as a driver of consumer loyalty through its implementation in creator marketplaces.
However, as Cointelegraph reported, data from Consensys shows that influencers and freelancers make up a small percentage of the overall workforce in the Web3 industry.
Micro-experiences and prediction markets
It’s unclear whether current blockchain-based loyalty programs have resulted in measurable increases in user onboarding. Most companies don’t disclose information about the effectiveness of their marketing efforts.
However, as of September 2024, our analysis of the most successful projects found that mini dApps, Telegram games, click-to-earn games, and prediction markets are seeing explosive growth compared to traditional loyalty programs.
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Simple experiences where incentives are unobtrusive or seamlessly integrated into the user interface are proving to be the most popular in the Web3 and cryptocurrency communities, many of whom were born after 1981.
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