LOYALTY COIN

The Loyality Vision

The​ ​Loyalty​ ​Market 

-For a long time, many merchants have offered their customers “loyalty” or “reward” points as an added benefit for shopping with them. The loyalty industry is huge. We estimate that the global loyalty market is between USD 300 and 500 Bio. Annual growth has been double digit for several years. The loyalty players are also fragmented and differ greatly country by country. The best figures are available for the US where the market size is estimated to be USD 138B with 3.8B members enrolled across all US loyalty programs, i.e. on average almost 15 memberships ​for ​every ​US ​inhabitant ​(Source: ​Colloquy ​2017 ​Loyalty ​Census).

The​ ​Problem

-However, the loyalty industry is not living up to its potential. In the US, more than half (54%) of loyalty memberships are inactive. 28% of Americans have left loyalty programs without ever redeeming ​a ​single ​reward. ​What ​a ​waste! Some of the reasons for consumer apathy towards loyalty programs has been addressed through ​digitization, ​e.g. ​mobile ​apps ​instead ​of ​cards. ​LoyaltyCoin ​is ​of ​course ​100% ​digital. However, the real reason consumers don’t join new programs or do not use them after joining is that the rewards themselves are perceived as being too low value or collection goals are seen as being unreachable. While redemption rates of loyalty points for typical single branded programs lie between 30 and 60%, coalition programs like Payback in Germany can reach 95% redemption rates. Coalition programs achieve a high level of liquidity within the bounds of the participating partners. On the other hand, coalition programs force a unified, non-customizable approach on participating merchants and put themselves – not the merchant brand – in the driver’s seat. This is why many strong brands do not join coalition programs, which limits the liquidity ​and ​usability ​of ​such ​rewards.

The​ ​LoyaltyCoin​ ​Vision

-LoyaltyCoin believes that the loyalty industry will have to fundamentally change in the coming years to offer customers more choice and make loyalty rewards more liquid without sacrificing the benefits of strong individualized programs. Our vision is to build THE single global loyalty program platform making loyalty rewards exchangeable and simple to use while preserving the branding ​flexibility ​of ​the ​merchants.

Why​ ​Blockchain

Why ​does ​LoyaltyCoin ​require ​blockchain ​technology?

-We built the LoyaltyCoin ecosystem by leveraging blockchain technology to allow seamless exchange of loyalty points among customers, without the need for individual agreements between the merchants and thus without any need for continuous settlement procedures and  accounting costs (see our video). Our customers have the freedom to use their rewards at their preferred location and our merchants will be able to efficiently stimulate sales with their most loyal ​customers.

 LoyaltyCoin aims to create universal exchangeability and liquidity for the world's rewards programs. To achieve this, LoyaltyCoin will leverage a public blockchain with an on-chain order book and exchange functionality as guarantor for high liquidity and a functioning price discovery mechanism.

 As soon as the LoyaltyCoin blockchain is made public, the blockchain community around the world will be able to integrate LYC Tokens and the rewards point tokens built on top of it - thus creating immediate liquidity. Moreover, as soon as the LoyaltyCoin blockchain is public, the community will be able to download the node software and make a market between any of the token pairs, thus further improving liquidity and ensuring that the price discovery mechanism can ​function.

Before the invention of blockchain technology, the LoyaltyCoin project would have needed to be built on a private server with APIs created to attempt to attract both global exchanges and third party liquidity providers. Fear of manipulation by the operator and missing direct control over the digital loyalty points have prevented this so far. The blockchain revolution has enabled people to control digital assets without needing to trust any third parties, and this is what makes it possible to achieve LoyatlyCoin's vision of creating universal exchangeability and liquidity for the ​world's ​rewards ​programs.


Why​ ​Exchangeability

Some people wonder why merchants would agree to let their loyalty points become exchangeable. Our experience has demonstrated that merchants are enthusiastic about rewards ​exchangeability ​for ​the ​following ​key ​reasons:

•  Making​ ​rewards​ ​real​: Exchangeability makes the rewards more valuable to consumers, which in ​the ​end ​is ​the ​whole ​point ​of ​rewards ​programs. ​You ​can’t ​make customers ​more ​loyal ​by ​giving ​them ​worthless ​points. 
•  Making  reward  effective:​ Exchangeability offers information that merchants would otherwise not obtain, i.e. how customers value different rewards available to them. Merchants want to know why customers are or are not using their points, and by observing ​exchanges ​valuable ​insights ​can ​be ​gained. 
•  Making rewards growing the business​: Merchants can gain new customers by attracting customers ​from ​other ​participating ​merchants ​to ​join ​their ​programs. ​Every ​rewards exchange on our platform is peer-to-peer, meaning that a merchant never loses any such ​merchant. 

Our own experience has shown that merchants understand the benefits of liquid, exchangeable rewards. They understand that it is in their interest for rewards to flow via peer-to-peer exchange to the customers who value their rewards most. This makes the selling customers happy ​and ​the ​buyers ​even ​more ​loyal.

Scalability

LoyaltyCoin offers the merchant partners a unique digital loyalty program platform with a simple set-up at low cost, direct access to communicate and activate loyal and new customers, full ​customer ​journey ​data ​analytics ​and ​tailored ​branding. 

The ecosystem is open to both new entrants as wells as established legacy programs. Legacy programs can join LoyaltyCoin without any need to adjust their current architecture: integrating them into the LoyaltyCoin ecosystem is seamless and non-disruptive to legacy members. Merchants who do not have a loyalty program yet can rely on us to build a new program when they join the platform: we will offer the option between a tailored made program and an out of the box solution. The LoyaltyCoin ecosystem is specifically built to on-board bricks-and-mortar as well as e-commerce and multi-channel programs. LoyaltyCoin Ltd, the company which created ​LoyaltyCoin ​is ​there ​to ​support ​the ​ecosystem ​and ​continuously ​build ​it ​up. 

The ​LoyaltyCoin ​ecosystem ​will ​grow ​fast: ​any ​new ​merchant ​will ​add ​its ​customer ​base ​to ​the platform while getting access to existing user. The LoyaltyCoin ecosystem will become more and more valuable as additional merchants join since users will be more likely to use their points when they are exchangeable across a large selection of merchants, while more merchants will join when they see how attractive the platform is for users. This is like the Amazon flywheel principle ​on ​steroids. 

The​ ​Competitors  

Despite the obvious advantages of using blockchain technology to create liquid, exchangeable rewards, we have not identified any other companies that have managed to create a blockchain-based architecture used by real customers in the real world. A few have come up with similar ideas and some have come up with limited pilots in controlled settings. LoyaltyCoin currently ​enjoys ​a ​first ​mover ​advantage ​that ​needs ​to ​be ​leveraged ​and ​further ​strengthened. 

How​ ​it​ ​Works:​ ​The​ ​LoyaltyCoin​ ​Mobile​ ​App  The LoyaltyCoin ecosystem is already live: we invite you to join LoyaltyCoin now and start collecting your rewards by downloading the LoyaltyCoin app on www.loyaltycoin.ch or via your ​Apple ​or ​Google ​App ​store ​by ​searching ​for ​“LoyaltyCoin”.

Join ​our ​Partner's’ ​loyalty ​program ​offered ​on ​the ​LoyaltyCoin ​App ​and ​start ​to ​explore ​and experience ​the ​LoyaltyCoin ​ecosystem. ​You ​can​ ​check ​the ​balance ​of ​all ​your ​loyalty ​programs in ​real ​time, ​see ​historical ​transactions ​and ​explore ​new ​offers ​and ​available ​vouchers ​simply and ​immediately ​on ​your ​phone.

The ​app’s ​branding ​is ​tailored ​to ​our ​partner ​programs ​and ​changes ​automatically ​once identified ​in ​the ​shop, ​giving ​you ​a ​seamless ​brand ​experience ​in ​real ​time. 

▪ You can collect your loyalty rewards by simply showing your LoyaltyCoin app in the participating ​shops. 

▪ Your rewards will be immediately visible on your phone in the LoyaltyCoin ​app. 

▪ You can directly use your rewards in the shop and manage them on your ​phone.  

Through ​the ​exchange ​functionality ​rewards ​can​ ​be ​traded ​easily ​from ​one ​brand ​to ​another.

▪ Exchanges are secured through our LoyaltyCoin​ ​blockchain ​technology. 

▪ Exchanges are visible real time within a few seconds. 

▪ No direct knowledge of blockchain is needed, everything is performed simply through the LoyaltyCoin app in a user-friendly ​and ​seamless ​experience.  

▪ The LoyaltyCoin app is available in five languages (English, Spanish, German, French and Italian) and includes a map to find shops nearby. 

▪ Any program has its own brand universe with links to the relevant web-shops, social media presences or info on latest collections and offers. 

THE LOYALITYCOIN ECOSYSTEM

The ​LoyaltyCoin ​ecosystem ​is ​built ​upon ​five ​major ​cornerstones:

LYC​ ​Customers 

Anybody with a smartphone can join the LoyaltyCoin ecosystem free of charge and participate in the loyalty programs offered by our merchant partners. Download for iOS and Android is available at the respective app stores. Registration for LoyaltyCoin and for the individual loyalty programs ​is ​done ​through ​the ​app.

LYC​ ​Merchants  

Merchants can join the ecosystem independently of their size and loyalty program history. LoyaltyCoin can on-board merchant partners new to loyalty as well as merchant partners with a legacy loyalty program. LoyaltyCoin can handle ​e-commerce ​as ​well ​as ​traditional ​in ​store ​operations. The LoyaltyCoin ecosystem addresses merchants from all industries benefiting from loyalty programs (e.g. retail, airlines, ​travel ​& ​tourism, ​banking).

LoyaltyCoin is flexible and can handle loyalty programs with a wide variety of design choices and parameters as long as the program allows exchangeability of points with other programs.

Ecosystem​ ​Builders  

-LoyaltyCoin Ltd develops and maintains the LoyaltyCoin mobile app and the IT backend systems that make it easy for merchants ​and ​customers ​to ​participate ​in ​the ​ecosystem. 

-LoyaltyCoin will develop the community by attracting, on-boarding and servicing merchants. LoyaltyCoin will provide off the shelf loyalty programs for merchants that currently do not have a loyalty program and also advise merchants with existing programs to improve their attractiveness.

-Further, LoyaltyCoin will provide merchants with access to superior data analytics and direct interaction channels with their ​current ​and ​prospective ​customers. 

-LoyaltyCoin will be compensated through fixed or variable service fees collected from the merchants. This business model of loyalty program service provider is well established and ​proven​ ​in​ ​the ​loyalty ​industry ​today. 

Blockchain​ ​Operators

The LoyaltyCoin blockchain is currently still private, but will be eventually made fully public. The blockchain has been up and running since September 2017. The public blockchain and its node software (LoyaltyCoin nodes) will be made available to the public as soon as security audits have been completed ​and ​stress ​testing ​is ​finished

The LoyaltyCoin blockchain works with a Delegated Proof of Stake (DPOS) consensus algorithm. Any holder of LYC Tokens can download the LoyaltyCoin node and participate in securing (witnessing) of the blocks by running the LoyaltyCoin​ ​node

If a LYC Token holder provides the witness service to the community (proof of stake), he/she will be rewarded by the community through the built-in blockchain reward mechanism (cf. details on the LYC Token functionality below). The reward mechanism ensures the LYC Token holders are incentivised to contribute to the security and stability of the LoyaltyCoin blockchain which underpins the LoyaltyCoin​ ​ecosystem. 

Exchange​ ​Offer  Providers  

Loyalty points of the individual merchant brands are represented as sub-tokens on the LoyaltyCoin blockchain. Exchange requests of customers are matched on the decentralized exchange on the LoyaltyCoin blockchain. However, exchanges of loyalty points through the blockchain can only happen if there is a counterparty who is willing to take the opposite position. Blockchain operators running a full node will be technically capable of taking on this counterparty role to provide exchange opportunities on the decentralized exchange platform. In this way, it is also assured that the exchange rates between the different loyalty programs will reflect utility and supply/demand characteristics ​of ​the ​respective ​tokens.

Loyalty points of the individual merchant brands are represented as sub-tokens on the LoyaltyCoin blockchain. Exchange requests of customers are matched on the decentralized exchange on the LoyaltyCoin blockchain. However, exchanges of loyalty points through the blockchain can only happen if there is a counterparty who is willing to take the opposite position. Blockchain operators running a full node will be technically capable of taking on this counterparty role to provide exchange opportunities on the decentralized exchange platform. In this way, it is also assured that the exchange rates between the different loyalty programs will reflect utility and supply/demand characteristics ​of ​the ​respective ​tokens. 

Technical​ ​Infrastructure​ ​and​ ​Blockchain  

The LoyaltyCoin ecosystem processes are powered by a hybrid IT architecture, i.e. partly on-chain ​and ​partly ​off-blockchain: 

         ■ On-blockchain:​ creation of sub-tokens by merchant representing their loyalty points and ​matching ​exchanges ​of ​loyalty ​points ​initiated ​by ​customers. 

         ■ Off-blockchain​: ​all ​other ​transactions, ​including ​collection ​and ​redemption ​of points at the point of sale as well as the loyalty program specific transactions like issuance of customer vouchers are handled in the back-end server of the merchants and LoyaltyCoin ​and ​not ​on​ ​the ​blockchain.

Development​ ​Roadmap​ ​and​ ​Use​ ​of​ ​Funds  

The funds from the LoyaltyCoin TGE will be allocated to support this roadmap, i.e. for product development, building critical mass of the ecosystem in Switzerland as well as international expansion ​(see ​pie ​charts ​below).

LoyaltyCoin ​Ltd., ​a ​Swiss ​corporation ​with ​seat ​and ​offices ​in ​“Crypto-Valley” ​Zug ​was incorporated ​in ​February ​2017

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Contact​ ​&​ ​Support    Adresse ​: ​LoyaltyCoin ​Ltd, ​Chamerstrasse ​67, ​6300 ​Zug, ​Switzerland

Website ​: www.loyaltycoin.ch 
Email ​: info@loyaltycoin.ch 
Facebook ​: https://www.facebook.com/LoyaltyCoin-1802829109729416/ 
Twitter ​: https://twitter.com/LoyaltyCoin_AG 
Youtube ​: https://www.youtube.com/watch?v=uLLAZ_yEk2I 
Telegram ​: https://t.me/LoyaltyCoinTGE 
BitcoinTalk ​: https://bitcointalk.org/index.php?topic=2089279