This post includes updates to the Open3 Collective knowledgebase and sent via email to members.
The one takeaway for this week’s update
Starbucks is unlocking brand marketing and potential revenue through a previously locked value stream. Here is how and why it is important.
The overhaul of their loyalty program to include web3 means that holders can sell their perks.
Loyalty members can gain perks a variety of ways, but if they want to sell off those benefits to someone else, they can do that. That opens up a secondary market for Starbucks loyalty perks. Rather than tying perks to a person, those perks are now independent and accrue to whoever currently owns the right to those perks. And, perks can continue to accrue, making them more and more valuable as time goes on.
This is important because:
- Starbucks is using web3 to let people do what they want with what they own. They are pushing more control to consumers, which makes them happier and strengthens the brand appeal. And it is more than just about selling off perks. Consumers can use the NFT backing the perk as part of social signaling to others. Will consumers use this to start creating their own associations with other loyalty NFT owners? Will Starbucks open up the potential for owners to do other things with their NFTs? The possibilities are endless.
- For Starbucks, it is creating brand marketing for itself by productizing something of value that was previously locked. Unlocked and there is now another way for the Starbucks brand to be advertised through new transactions.
- Will Starbucks create a new source of revenue by taking a royalty off of each sale, which it can do right now because this capability is part of web3 infrastructure? Will it instead allocate that revenue towards a charitable purpose, or some other purpose that directly benefits its loyalty members? The possibilities are endless.
Starbucks is a food brand in a consumer category that may not benefit as much via new meaningful revenue from web3 as other categories like outdoor and luxury. For Starbucks, it is more about making its brand stronger with consumers by pushing control and abilities to consumers to do what they want.
To see all weekly takeaways published to one document, click here.
Key Roadmap Changes/Additions
- Added tool that rolls up the key takeaways from the weekly email.
The above are key updates to consider. Go to the web3 market intelligence database to see all.
Key Tools Changes/Additions
- Added to the tool, Web3 Software Tools Ideas For Consumer Product Companies, an idea for smart contract dashboard manager.
The above are key updates to consider. Go to the web3 market intelligence database to see all.
Calendar Changes/Additions
- none this week
Notable Market Intelligence Updates
- Solana troubles…see forward guidance below.
The above are key updates to consider. Go to the web3 market intelligence database to see all.
Discord Server Conversations
- none this week
The above are key updates to consider. Go to the web3 market intelligence database to see all.
Knowledgebase Admin
- none this week
Forward Guidance
Which blockchain to use?
For consumer brands using NFTs and smart contracts, there are many blockchains with no discernable differences between each chain. The leaders are and have always been Ethereum and Polygon, the latter which is a layer 2 that writes to Ethereum. While some chains might currently do things faster, Ethereum and Polygon will catch up to match their performance.
In the last 6-months especially, these two chains have solidified their status as not just the leaders, but really the only smart-contract enabled chains that brands need to use. They are solid, command most of the NFT/smart contract blockchain market share, and here to stay.
Flow is a blockchain that will also very likely stick around because it focused on major sports and has recently received the blessing from Ticketmaster, the monopoly of monopolies. Brands, unless you are a major sports franchise, should not use Flow because for a variety of reasons, is not as good as Ethereum and Polygon.
ImmutableX may stick around because it has focused on online gaming. Nothing here for consumer brands to consider, unless they are a game developer.
What about Solana, a darling of the 2020-2022 bull market? Again, nothing discernably different that Ethereum/Polygon combo offer, and actually is worse for a variety of reasons, so brands should stay away from Solana. Further, Solana is in jeopardy because major projects are moving off of it to come to – that’s right – Ethereum and Polygon. The latter are just better than Solana.
For consumer brands, the emerging MO is to use Ethereum for higher-value, lower throughput NFT mintings, and use Polygon for lower or no-value, high throughput NFT mintings.
See all forward guidance published to one document here
