Presentation by Micha Roon, Sweetbridge, Principal Blockchain Developer
SweetCoin proposes an innovative approach to the fields of loyalty programs and bonus points. Where current systems leave companies with a liability for each loyalty point distributed, Sweetcoin provides with only assets. Sweetcoin is a simple and efficient way for participant companies and their customers to benefit from loyalty programs. Customers benefit from discounts and cashbacks whereas companies get rewarded for growing the economy and on boarding new companies.
2. Benefits
Solving the most common pain points related to loyalty programs:
● Lack of Reward Relevance
● Flexibility
● Value
● Lack of a Seamless Multi-Channel Experience
● Customer Service Issues
[Source: Capgemini Consulting Analysis, Social Media Scan conducted in December 2014
https://www.capgemini.com/consulting/wp-content/uploads/sites/30/2017/07/reinventing_loyalty_programs.pdf]
3.
4. ● Sellers
○ Incentivized to grow the economy
● Customers
○ Incentivized to buy from the economy
● Investors
○ Benefit from economy growth
Stake-Holders and incentives
8. SWC Flow
● Buyers get SWC from Sellers as rewards
○ As incentive to join the network
○ Instead or in addition to the Fiat reward
● Sellers get SWC in two ways
○ For contributing to growth
○ The undistributed rewards are used to buy SWC which are given to sellers
● Anyone can buy and sell SWC in the secondary markets
9. ● Initial sale to finance project - investors
● The rest is locked up to be minted by growth
● Minting process
○ SWC Supply grows by the same % as the rewards pool or 10% of remaining tokens
whatever is smaller
● Sellers are free to do with their tokens as they please. E.g. use them as
loyalty points or sell them on the secondary market
Token distribution
10. SWC usage
● SWC has to be activated to get rewards
● Activated SWC only gets rewards after being active for 30 days
○ Disincentive to trade for customers of the network
● Non buyers have no incentive to activate SWC
11. Intrinsic value
● The value of the SWC can actually be computed. Past or present value
is easy to compute but future value is hard to predict
SWC Value = Total Rewards / Activated SWC
12. ● Usable for B2B
● Strong loyalty binding because of accumulation of assets
● Token has intrinsic value
● Token supply reflects the size of the economy
● Liability does not increase with the distribution of loyalty points
A reward system that works better together
Editor's Notes
Who is sweetbrige
Who am I
My background
My role within sweetbridge
Thank you for listening to my talk about reward tokens
Too many loyalty programs to remember. Average household participates in 21 programs
Why should the customers care about the loyalty points?
Value is the main contention point: exchanging loyalty points for services is not available over all channels
The main goal of SWC is to provide increasing value to its holders
The cashback from SWC ownership is seamless
The owner of SWC is free to sell them on the secondary markets
Sellers get rewarded for contributing to growth
Customers get cashbacks when they spend in the network
Investors benefit from the raising value without impacting the cashback
Stakeholders are Sellers and buyers
Sellers incentivize buyers to join by giving them SWC. This is not a mandatory step
Buyers spend money at sellers in exchange for products and services
Participant sellers contribute a fixed percentage of revenue to the rewards pool
Tokens have to be locked in order to get rewards
An arbitrary locking period of 30 days has been defined
The value of each token locked up for at least 30 days is computed as follows
Total Reward Pool / Sum(Activated Tokens) = Individual token reward
The reward is capped at the owner’s spending
The rewards pool is distributed according to the formula SWC Value * SWC held
In addition to the rewards pool, sellers are free to distribute other rewards like the SWC they have earned from mining
Giving SWC is a good idea as the more SWC customers have, the more likely they are to remain loyal
Lack of Reward Relevance
Flexibility
Value
Lack of a Seamless Multi-Channel Experience
There are 3 ways to get SWC
Buyback from undistributed rewards
Mining by growing the economy
Purchase from secondary markets
As the rewards are capped to the spending of the buyers there might be overflow. This is used to buy SWC on the market
The purchased SWC are then distributed to the Sellers in proportion to their contribution to the rewards pool
Growth is. Computed on an absolute basis. The rewards pool must pass its last peak for growth to be registered
The number of SWC grows by the same percentage as the rewards pool or 10% of the remaining SWC to be mined whatever is smaller
At the beginning there will be only one economy but as the system grows, there is no reason to limit that
Even if there are multiple economies there will be a single mining pool and probably only a handful of exchanges
The activation requirement means that you can get cashback from only one network for any SWC you own.
Activating SWC without buying has the effect of gifting SWC to all the sellers
As the token increases in value, everyone wins so getting more companies on board is beneficial
The token represents the size of the economy. The bigger it is the more valuable it becomes
When you distribute an appreciating token to your customers they are more likely to stick around
A token with intrinsic value allows nice features like alerting users when they can purchase an item with over X% discount
As the cashback value is dependent on buyer spending and active SWC it varies all the time
Normally each loyalty token is a liability, in the SWC system it is the rewards pool contribution which represents the liability. This means that the liability is the same (10% of revenue say) independent of the loyalty program or customer behaviour