Mintalio

Problem

Traditional loyalty programs often struggle with low customer engagement, lack of personalisation, and limited customer ownership over rewards. They are typically centralised and offer generic, non-transferable points that fail to excite users, leading to decreased interest and participation. Reduced participation may contribute to a customer's decision to purchase from a competitor more often.

Proposed solution

NFT-based loyalty programs solve these issues by leveraging blockchain technology to create unique, verifiable digital assets that customers truly own. These programs enhance engagement through exclusivity and gamification, provide transparency with immutable transaction records, and allow for transferability and potential value appreciation of rewards. This innovative approach revitalizes customer interest and offers a more personalised and empowering loyalty experience.

Added value for customers

• True ownership - NFT based cards allow customers to truly own their digital points and rewards instead of holding ephemeral, centrally controlled points. This ownership increases the perceived value and exclusivity of the rewards
• Transferability and liquidity - customers can trade or transfer their NFT (loyalty card) and rewards, which opens the possibility for value appreciation. In this way, rewards can become potential investment assets, a feature not available with traditional loyalty points
• Personalisation and gamification - rewards can be tailored based on customer behavior and preferences, enhancing engagement. Gamification elements, such as collectible editions, leveling up, or special badges, can make the program more interactive and fun
• Transparency and trust - thanks to blockchain technology, customers have access to transparent and immutable records of their rewards. This boosts trust and removes doubts about the fairness of the program
• Exclusivity and social value - unique or limited edition NFTs can make customers feel part of an exclusive community, which can be a strong motivator for long-term loyalty

Added value for merchants

• Increased engagement and customer loyalty - implementing NFT-based loyalty cards creates a more dynamic and interactive experience that motivates customers not only to purchase but also to actively engage with the brand community
• New revenue streams - the possibility of establishing secondary markets for NFT trading can generate additional revenue through transaction fees, creating lasting value even after the initial sale
• Enhanced data insights - the digitization of rewards enables detailed tracking and analysis of customer behavior, providing merchants with valuable insights for targeted marketing campaigns and further optimization of the loyalty program
• Brand differentiation and innovation - incorporating blockchain technology and NFTs into loyalty programs strengthens the brand’s image as innovative and modern, setting it apart from competitors and attracting a new generation of tech-savvy customers
• Operational efficiency and security - the decentralized nature of blockchain gives merchants better control over transaction security and transparency, reducing the risk of fraud and enhancing customer confidence

Smart contract structure

The smart contract will be an ERC-1155 implementation that handles multiple token types:

1. Loyalty card NFTs (Non-Fungible Tokens):

   • Each loyalty card is a unique NFT with a specific token ID
     • Metadata associated with each NFT loyalty level

2. Loyalty points:

   • Loyalty points are represented as a simple uint associated with each NFT
   • The contract deployer can assign and manage points for each loyalty card using dedicated functions
   • Points can be accumulated and redeemed by users based on their loyalty status

1. Loyalty card implementation

• Minting loyalty cards:
  • When a user joins the loyalty program, a unique NFT loyalty card is minted and assigned to their wallet address
  • The token ID for each card is unique, ensuring non-fungibility
• Metadata management:
  • Metadata for each loyalty card includes:
    • Owner's wallet address
    • Current loyalty level
    • Other customizable attributes (e.g., membership tier)

2. Loyalty points system

• Earning points:

  • Users earn points through interactions such as purchases or participating in promotions
  • The smart contract includes functions to increase a user's balance of loyalty point tokens
  • Authorized addresses (e.g., the company's backend system) can call these functions securely

• Point tracking:

  • Points are tracked by mapping user addresses to their uint256 point balances
  • Points are managed as simple numeric values within the smart contract and are not represented as tokens

Leveling mechanism

• Level thresholds:

  • Define levels (e.g., Silver, Gold, Platinum) based on point thresholds
  • The smart contract checks point balances to determine if a user qualifies for a level upgrade

• Level upgrades:

  • Upon reaching a new level, the contract updates the user's loyalty card metadata
  • Emits an event (LevelUp) that off-chain services can listen to for triggering additional actions (e.g., sending notifications via email)

Point redemption process (optional for now)

• Redeeming points:

  • Users can redeem points for rewards through functions in the smart contract
  • The contract deducts the appropriate number of points from the user's balance
  • Rewards can be:
    • Issued as new tokens (NFTs or fungible tokens)
    • Managed off-chain by emitting events for the backend to process

• Validation checks:

  • The contract ensures users have sufficient points before allowing redemption
  • Includes safeguards against double-spending and unauthorized access

Engineering

• Network: Base, Optimism, Arbitrum or Polygon
• Smart contract language: Solidity
• Smart contract framework: Foundry

Business model

The business model capitalizes on multiple revenue streams:

• Charging of the trader's fee for rewinding and brokerage services
• Selling NFT loyalty cards and limited editions
• Earning royalties from secondary market trades (mint can be free and for every owner change there will be royalty fee)
• Boosting sales through heightened customer engagement (This opens up the possibility to charge merchants for points (purchases) made with these loyalty cards)

Additional opportunities include partnerships for co-branded NFTs:

• Subscription-based premium access
• Monetization of exclusive events
• Merchandise linked to the NFTs

By leveraging blockchain technology, the program reduces operational costs, enhances security, and builds customer trust through transparency and true ownership of rewards.

Related Reading/Work

Loyalty, Memberships and Ticketing: How NFTs Will Bring About Mass Adoption

NFT Loyalty Programs in Web3: Revolutionizing Customer Engagement and Loyalty Landscape

Foundry

Foundry is a blazing fast, portable and modular toolkit for Ethereum application development written in Rust.

Foundry consists of:

• Forge: Ethereum testing framework (like Truffle, Hardhat and DappTools)
• Cast: Swiss army knife for interacting with EVM smart contracts, sending transactions and getting chain data
• Anvil: Local Ethereum node, akin to Ganache, Hardhat Network
• Chisel: Fast, utilitarian, and verbose solidity REPL

Documentation

https://book.getfoundry.sh/

Usage

Build

$ forge build

Test

$ forge test

Format

$ forge fmt

Gas Snapshots

$ forge snapshot

Anvil

$ anvil

Deploy

$ forge script script/Counter.s.sol:CounterScript --rpc-url <your_rpc_url> --private-key <your_private_key>

Cast

$ cast <subcommand>

Help

$ forge --help
$ anvil --help
$ cast --help