Building loyalty with Web3

What is a Web3 Loyalty Program? (A Jargon-free Answer.)

Full name
August 16, 2023

Table of contents

Updates by month

Stay up to date
Share this post

We demystify the traits and tech of Web3 loyalty programs, delve into the benefits of going Web3, and give you some real-world examples of Web3-powered loyalty programs.

If there’s any single word that sums up the modern internet, it’s noisy. The everyday internet user is barraged with requests either for their money or their data. As a business, it’s difficult to capture and maintain an audience’s attention in a climate like this. How can your brand show it’s genuinely invested in customers for the long haul?

If these issues strike a chord, you’ve likely considered a loyalty program as a solution. The problem is, so has your competition. Fortunately, there is something that will give you a competitive edge: Web3. 

In this post, we'll discuss the traits and tech behind Web3 loyalty programs, delve into their business advantages, and give you some real-world examples.

Web3: A decentralized version of the internet 

Before we explore the intricacies of Web3 loyalty programs, let’s quickly unpack what Web3 is. 

Web3 is an emerging version of the internet that tackles issues like data privacy, tech monopolies, and digital ownership present in today’s web. 

Today’s internet is centralized – it’s owned and managed by a handful of companies that decide what content is valuable. In contrast, Web3 embraces decentralization through blockchain, aiming to democratize the internet ecosystem in terms of platform usage, content sharing, and interaction methods.

Versions of the internet from Web1 to Web3

In a decentralized internet, there is no central authority or control, and users can interact directly with each other without the need for intermediaries or gatekeepers. Sounds pretty neat, right?

Signature traits of Web3 loyalty programs

Most customer loyalty programs are transactional – they offer fleeting engagement but fail to build true loyalty. Web3-powered loyalty programs go far beyond doling out points. Here, customers don’t merely receive rewards – but for the rewards they do get, they have true ownership of them. 

The key traits of Web3 loyalty programs: 

  • Reward ownership: If a customer decides to exit the program, rewards can be sold or traded.
  • Transparency: Every transaction is logged in a publicly accessible database.
  • User data control: Personal data is only collected with explicit user consent.
  • Trustlessness: Transactions are automated, based on predefined conditions, sidestepping the need for intermediaries or added security.
  • Diverse rewards: Web3 loyalty programs often venture beyond discounts and points, offering experiential, personalized rewards. 

At their core, Web3 loyalty programs aim to provide real value to customers and build win-win long-term relationships.

Core tech powering Web3 loyalty programs

What makes a loyalty program “Web3”? We’ve thrown around a few different terms, but let’s dive deeper into what these terms mean through a loyalty-program lens. 


Web3 loyalty programs exist on the blockchain, a technology that enables tokenization. Tokenization transforms valuable items into digital tokens for use within blockchain applications. These tokens can represent ownership of tangible assets like art or intangible ones like company shares or voting rights. Essentially, any item of value can be tokenized.

Users store digital tokens in a digital wallet (we'll delve deeper into this shortly). Blockchains are inherently secure and operate without a central authority, making them decentralized. In Web3 loyalty programs, they ensure a tamper-proof record of the rewards or points customers accumulate.


When we’re talking about tokens, we’re referring to NFT (non-fungible tokens). 

These are unique digital properties with an ID on the blockchain. In loyalty programs, NFTs serve dual roles:

  1. They act as membership credentials, enabling members to claim specific rewards or benefits.
  2. They can be the rewards themselves.

(Psst! Here’s a short blog post explaining the roles that NFTs play in customer loyalty programs.)

Digital wallet

The digital wallet is another key piece of technology here. Digital wallets allow users to personally own the tokens that they receive. Digital wallet services hold all sorts of digital properties and are tied directly to a user’s identity rather than an account name. A digital wallet functions similarly to a user account in this example, with the main difference being that control of the account is in the hands of the user rather than a company.

Smart contracts

Smart contracts enable blockchain transactions to occur. A smart contract automates agreements when certain conditions are met. Think of them as digital vending machines: they automatically execute actions when set conditions are met. In Web3 loyalty programs, these contracts manage and dispense rewards as customers fulfill specific criteria.

Business benefits of Web3-powered loyalty

woman facing on white counter


A more personalized, unique loyalty program can be extremely attractive to prospective customers, as it stands out as something particularly unique about your brand. 


When another brand's loyalty program is on the blockchain, its inherent interoperability lets you create joint rewards, merging both customer bases. This enables collaborations, like fashion brands teaming up with department stores for exclusive clothing rewards.

New rewards and customer engagement

More meaningful, personalized, and non-financial rewards mean more customer engagement. Customers can choose the rewards they want ranging from traditional discounts and free products to experiential awards like events or experiences. 

Attract new audiences

Web3, driven by Gen-Z and millennial pushback against centralized data control, signals a generational shift. Embrace Web3 and collaborate with blockchain brands to appeal to younger audiences and invigorate your brand.

Customer retention

Web3 helps you keep your customers engaged with your brand through fresh rewards and community access. You can also gamify the experience by adding achievements or awards to incentivize long-term relationships.

Customer benefits of Web3-powered loyalty

Greater control of personal data

Customers can control who they share their personal data with. Sharing personal data can be more of a mutually beneficial exchange where customers receive personalized benefits. 

New ways to be rewarded

Rather than collecting intangible points or small discounts, customers receive interesting rewards that are relevant to their interests. (Here are 12 examples.)These rewards can be collected through community engagement and gamification rather than making qualifying purchases. 

Control, own, and trade rewards  

NFTs allow for direct ownership of the digital properties earned. Trading, selling, or exchanging rewards is made possible for all customers. 

Examples of Web3 loyalty programs

Lacoste Evolves NFTs into Community-Focused Loyalty Program - Retail  TouchPoints
Source: Lacoste


Fashion brand Lacoste’s Web3 loyalty program uses NFTs in the form of cards. These cards involve elements of gamification like quests that customers complete to unlock benefits and rewards. The cards also evolve over time as the holder continues to engage with the brand, allowing them to ascend membership tiers and have access to more benefits. The Lacoste mission also involves a brand community hosted on the social media platform Discord to discuss the card and similar interests. 

Global Fit Club

Global Fit Club has a simple goal: Let its customers work out anywhere at any gym. 

Customers purchase an NFT that acts as an access pass to a number of participating gyms across the world. Beyond comprehensive membership plans, members also get access to classes and services. Global Fit Club also incorporates gamified play-to-earn elements where they receive discounts and rewards based on the number of daily workouts they accomplish. 

PBA LBC Rewards

The Professional Bowlers Association launched LBC awards on the Avalanche blockchain to offer rewards for fans of professional bowling. The loyalty program allows its customers to earn rewards as they improve their bowling game that exists within the digital space. In later phases, the PBA plans to introduce points for completing certain achievements that can be redeemed for prizes. 

Web3 loyalty programs continue to evolve as new reward structures, ideas, and strategies are developed. It’s an exciting space that’s perfectly suited for brands that are looking for a unique perspective on customer loyalty. How could your brand benefit from enhancing its loyalty programs with Web3?

Full name
Job title, Company name