A world-first blockchain loyalty research project has been launched by the University of New South Wales and loyalty agency, LoyaltyX.
The Unify Rewards program allows UNSW students to earn Ether cryptocurrency (ETH) by scanning a barcode in their digital wallet, earning $5 of Ether for every ten transactions made across 12 campus retailers, including Boost Juice and IGA.
The program aims to provide members access to cryptocurrency without risk or investment required, while maintaining loyalty benefits.
ETH, supported by the Ethereum network, also maintains key differences to the traditional points system, which has restrictions on where the points can be spent, expiry dates and no control over its value.
LoyaltyX Chief Design Officer and Co-Founder, Philip Shelper, described the project as the first major advancement in loyalty program design since the launch of the frequent flyer program in the early 80s.
“Consumers are tiring of big loyalty programs which devalue points balances over time to boost their profits.
“Cryptocurrency democratises the program design, with the value of the currency increasing as demand increases.
“Our project also allows members to own cryptocurrency without having to invest their own money, thus de-risking the experience,” he said.
Since the launch of the project on 13th October, ETH has already experienced volatility, with a 13% spike over the weekend and a 15% drop in the last 24 hours, which is starting to rise again.
Shelper said its unpredictability is what makes ETH so exciting.
“The really interesting thing is that because it is new and speculative, there are quite big swings in its value.
“We believe it makes for a more compelling currency,” he said.
LoyaltyX Co-Founder and Managing Director, Andrew Lowe, said the project steps into uncharted territory to disrupt traditional loyalty points programs.
“Last month, the value of Ether rose by 30%, so we’re excited to see how members respond to this type of loyalty currency vs traditional approaches such as points.
“This is the first time a loyalty program allows members to transact across multiple retailers and earn a popular cryptocurrency which fluctuates based on market forces.
We’re confident they’ll find it much more engaging, but the research will give us a more definitive answer,” he said.
Unify Rewards scan IDs have been set up in participating retailers.
Campaigns and surveys are being run to capture research data by Professor Ron van der Meyden and Associate Professor Salil Kanhere of UNSW’s School of Computer Science and Engineering, as well and Eric Lim from UNSW’s School of Business.
The research will identify whether ETH drives greater engagement than points, and provide recommendations to clients on using cryptocurrency.
Shelper said community sharing is a strong aspect of the company and said once the trial project is completed, the research will be made publicly available.
“Other companies, including other loyalty providers, will be able to draw on and build on that knowledge,” he said.
The 6-week long program is limited to 500 staff and students, with registrations now closed. Research updates are regularly posted on the Unify Rewards website.
The project is partnered with Loyaltycorp, PicoLabs, and Honeywell.