Here’s how Web3 can disrupt traditional loyalty rewards

Plutus, a Web3-native rewards platform, uses blockchain to offer a more flexible and rewarding experience for users.

Traditional loyalty reward cards have long been a cornerstone of consumer finance, onboarding new users with the promise of points, miles or cashback on their purchases. However, these programs often come with limitations and often fall short of expectations.

Most traditional credit cards offer a minimal value of around 1% cashback—especially when paired with high interest rates. Programs like Air Miles provide much less in value and further restrict redemption to specific brands, flights, or services, leaving occasional users with a struggle to find meaningful ways to use their rewards.

Moreover, points and miles often lack transferability and ownership, with expiration dates pressuring users to redeem them quickly. These frustrations drive the demand for more flexible alternatives. Enter Web3 — a game-changer revolutionizing loyalty rewards.

Web3 to disrupt loyalty rewards

Plutus, founded in 2015 by crypto pioneer Danial Daychopan, is at the forefront of this revolution. Having launched a London-based Bitcoin exchange after joining the space in 2012, Daychopan was among the early adopters of blockchain. Plutus has since tokenized traditional rewards, distributing over £20 million in value through its Visa-powered debit card.

Plutus users earn 3% rewards on every card purchase, paired with banking-like features for a low monthly subscription. Unlike centralized crypto cards requiring asset lock-ups, Plutus provides non-custodial payouts, offering full transparency and freedom over earnings.

PlutusGifts rolls out on 30th Nov! 🎁

See how all utilities work:https://t.co/7r0WdRJLMf pic.twitter.com/qbQIgt3XAh

— Plutus (@plutus) November 21, 2024

Platform enhancements

Looking ahead, Plutus plans to raise rewards to as much as 10% through its innovative FUEL system. This mechanism charges a small fee on rewards transferred across the network, recycling that value back to customers.

Furthermore, Plutus introduces real-world utility for its native token, PLU. Starting Nov. 30, users can redeem 1 PLU for £/€10 gift cards from popular brands, with plans to expand to Air Miles and other features such as discount and cashback on travel bookings with PLU. This unique tokenization model bridges the gap between crypto and mainstream consumers, providing tangible, flexible benefits.

Tokenizing loyalty rewards for mainstream use

Plutus offers additional perks beyond 3% rewards. Customers can earn up to £/€10 monthly in PLU for spending at over 50 major services like Netflix, Spotify and Amazon Prime. By partnering with brands, Plutus generates revenue while delivering savings to its users — made possible by the power of tokenization.

Ensuring sustainability

The sustainability of such a lucrative model has been a topic of debate. To address concerns, Plutus partnered with Ernst & Young, a “Big Four” accounting firm, to validate its tokenomics. Their findings deemed the model robust, though certain assumptions are under review, with an updated report expected in December.

“Some question the system’s scalability and naively compare it to standard cashback,” said Daychopan. “By re-validating our model with Ernst & Young and making it public, we aim to reassure our community and inspire others to adopt and enhance their own reward systems.”

On concerns about revealing proprietary data, Daychopan added, “When others replicate, it encourages us to innovate and leave them behind.”

Plutus is also introducing a £/€10 Anchor, ensuring that all PLU earned in-app holds this value at a minimum. This decouples the token’s value from volatile external exchange prices, promoting long-term sustainability while preserving user trust.

The future of rewards

Plutus’ innovative approach exemplifies how Web3 can revolutionize loyalty rewards, offering flexibility, transparency, and real-world utility. With its robust tokenomics and forward-thinking initiatives, Plutus is paving the way for a new era of consumer rewards in the blockchain age.