WEBVTT 1 00:00:10.240 --> 00:00:13.940 I think the topic is something which is 2 00:00:14.960 --> 00:00:19.580 like "loyalty and stablecoins." How many of you are here just because you run a 3 00:00:19.640 --> 00:00:24.420 loyalty program? And how many of you are like, 4 00:00:24.480 --> 00:00:26.920 just because let's see what stablecoins can do with loyalty? 5 00:00:29.560 --> 00:00:33.280 Well, that was the question I also had when I was writing this up. So, 6 00:00:33.780 --> 00:00:36.780 I want to start with a very big number, which is like, okay, 7 00:00:36.880 --> 00:00:41.060 let's everyone focus on this because that's a massive number on the screen, 8 00:00:41.680 --> 00:00:46.660 and that's $48 billion. And no, it's not a random number. It has a value for it, 9 00:00:46.720 --> 00:00:51.580 for sure. Which is like, that's the amount today, every year, 10 00:00:52.280 --> 00:00:55.920 where you have unredeemed loyalty value. So every year, 11 00:00:56.780 --> 00:00:58.180 this is the money that is not lost, 12 00:00:58.520 --> 00:01:00.480 but this is the loyalty amount that is never redeemed, 13 00:01:01.160 --> 00:01:04.800 which means nobody's stealing it from you, but the brands are stealing, 14 00:01:05.460 --> 00:01:06.640 or the customers are stealing, 15 00:01:07.140 --> 00:01:10.620 or it is not set up in a way where the end customer, 16 00:01:11.120 --> 00:01:13.160 who should have this as a value, 17 00:01:13.680 --> 00:01:18.080 he's not getting it. And that is something which I would 18 00:01:18.620 --> 00:01:23.420 try to convince you why or how stablecoins can actually go out and 19 00:01:23.480 --> 00:01:27.600 solve for that. So when you look at this number, 20 00:01:27.880 --> 00:01:32.240 and when you look at it and you say like one of the thought process for 21 00:01:32.340 --> 00:01:36.580 everyone, and like working with brands, one of the thing everyone says is, "Hey, 22 00:01:36.740 --> 00:01:40.760 loyalty is never designed to be 100% redeemed because if the loyalty is 100% 23 00:01:40.960 --> 00:01:45.360 redeemed, that means I have a big expense on my balance sheet." So that's why, 24 00:01:45.720 --> 00:01:48.640 or this is how, why a lot of people actually think about it, 25 00:01:49.100 --> 00:01:53.980 and they see it is not an uncomfortable number because we are saving 26 00:01:54.140 --> 00:01:57.380 on our balance sheets because someone is not redeeming it, 27 00:01:57.540 --> 00:02:01.720 which means the customers are not getting the final value. But when we... 28 00:02:02.300 --> 00:02:06.540 I think I've worked with a couple of brands where we realized that this was not 29 00:02:06.620 --> 00:02:09.940 true. And I'll talk about some of those use cases later on, 30 00:02:10.420 --> 00:02:13.820 where we have actually worked with brands to go out and solve for it, 31 00:02:14.240 --> 00:02:19.020 and they have seen results. And then they were like, "Yeah, this is much better. 32 00:02:19.180 --> 00:02:23.320 We are happy to get all our money ready." So with that, 33 00:02:23.660 --> 00:02:24.820 I think this whole industry, 34 00:02:24.880 --> 00:02:29.760 which is like a $300 billion industry where almost one-sixth of the 35 00:02:29.800 --> 00:02:33.540 value is not getting to the customers, but just remember this amount, 36 00:02:33.830 --> 00:02:38.480 $300 billion, because this is important from a stablecoin's perspective, 37 00:02:38.960 --> 00:02:41.880 and this is like, if you look at the overall stablecoin market, 38 00:02:42.380 --> 00:02:44.700 the total stablecoin market cap versus this, 39 00:02:45.220 --> 00:02:49.320 this is a substantial number in the market. Now, 40 00:02:49.840 --> 00:02:53.700 why this is like just from a perspective of like when you look at loyalty, 41 00:02:54.300 --> 00:02:57.120 why this is like a quiet disaster? One, 42 00:02:57.660 --> 00:03:00.520 like if you look at it from a perspective of payment mechanism, 43 00:03:00.580 --> 00:03:01.500 so let's say tomorrow I say, 44 00:03:01.500 --> 00:03:06.120 "We should think of loyalty as a payment mechanism." This is one big problem 45 00:03:06.240 --> 00:03:08.060 where basically what you will say is like, 46 00:03:08.060 --> 00:03:12.540 "Will I use a payment system where 15% of my money is lost?" 47 00:03:12.840 --> 00:03:16.800 The answer is "No," because that's why we are trying to go out and use much more 48 00:03:16.880 --> 00:03:20.860 efficient systems, and these efficient systems are trying to go out and get us 49 00:03:22.480 --> 00:03:25.920 a lot more money for our businesses at a lot lesser pricing. 50 00:03:26.620 --> 00:03:31.340 So there's a lot of value evaporation that happens with the loyalty perspective. 51 00:03:32.100 --> 00:03:34.700 Also, like every time you stay in Marriott, 52 00:03:34.760 --> 00:03:37.960 how many of you staying too in Marriott just because you're getting points 53 00:03:37.980 --> 00:03:42.380 there? I too. I have been like doing that for the last one month, 54 00:03:42.840 --> 00:03:43.820 about to get Gold here. 55 00:03:45.720 --> 00:03:50.280 But like the whole point is like the value evaporation happens 56 00:03:50.740 --> 00:03:53.340 from a customer's perspective, but even like it is very slow. 57 00:03:53.980 --> 00:03:55.920 Every time I exit out a Marriott, 58 00:03:56.480 --> 00:03:58.180 I'm not getting my points the moment I check out. 59 00:03:58.840 --> 00:04:03.380 It will take a good amount of time, and it will... The other challenge is, 60 00:04:03.920 --> 00:04:07.280 now when you want to go out and play this game of airlines, like I travel, 61 00:04:08.420 --> 00:04:10.780 I've done like 15 flights in the last 35 days, 62 00:04:11.440 --> 00:04:15.440 and that has been China Airlines, Emirates, 63 00:04:16.540 --> 00:04:20.360 Air India, Turkish Airlines, Virgin [Atlantic]. 64 00:04:20.920 --> 00:04:24.200 So now I have a lot of points and a lot of applications, 65 00:04:24.800 --> 00:04:27.940 and I have been like one of the worst guys who has been traveling from five 66 00:04:27.960 --> 00:04:32.940 years and is not in a Gold tier of any of these loyalty programs because what I 67 00:04:33.000 --> 00:04:36.820 do every time is I book my flights at the last moment. So that is the biggest 68 00:04:36.960 --> 00:04:37.380 problem, 69 00:04:37.380 --> 00:04:42.280 which means every different loyalty program is getting accounted 70 00:04:42.420 --> 00:04:46.760 in a different fashion. They're not connected to each other. And yeah, 71 00:04:48.440 --> 00:04:49.600 I'll show you a slide later on, 72 00:04:49.700 --> 00:04:54.400 which is how my phone looks with downloading 200 applications to try to go out 73 00:04:54.540 --> 00:04:58.520 and redeem these things. So why points are broken today? One: 74 00:04:59.800 --> 00:05:04.120 I think brands, they are getting created in a way where, 75 00:05:05.520 --> 00:05:09.040 and this comes from a lot of regulatory perspective where points are something 76 00:05:09.080 --> 00:05:11.100 which are just unregulated IOUs. 77 00:05:11.800 --> 00:05:14.960 They are not a payment mechanism. So you can, 78 00:05:15.260 --> 00:05:18.040 like the way you tax them in different countries is completely different. 79 00:05:18.720 --> 00:05:22.440 Then brands can devalue them because you don't never, 80 00:05:22.720 --> 00:05:26.260 or you don't really know what is the value of those points. 81 00:05:26.840 --> 00:05:31.380 So basically brands will devalue that you collect so much points in many areas. 82 00:05:31.500 --> 00:05:35.840 I've seen people who have been in Marriott for collecting points for 20 years 83 00:05:35.900 --> 00:05:39.960 because when they want to retire, they want to actually go out on a nice, 84 00:05:40.580 --> 00:05:43.720 big holiday. Well, after 20 years, 85 00:05:43.820 --> 00:05:47.920 your points get literally devalued. Now what do you do? 86 00:05:48.740 --> 00:05:52.120 You can just get pissed off. That's it. And so that is there. 87 00:05:52.200 --> 00:05:53.420 And then these walled gardens, 88 00:05:53.480 --> 00:05:56.400 like you have so many apps that you want to just go out and download, 89 00:05:56.500 --> 00:06:00.620 convert those points. And then there's these programs which were built like, 90 00:06:00.680 --> 00:06:02.400 "Hey, you can move this point to this point. 91 00:06:02.620 --> 00:06:07.360 One point is equals to one point of this different program." Which is like, 92 00:06:07.460 --> 00:06:11.660 I look at a lot of these Instagram reels where these influencers are telling me, 93 00:06:11.660 --> 00:06:15.140 "You should have this card. You should have that card. And using those cards, 94 00:06:15.200 --> 00:06:17.380 you basically can move this money from this, 95 00:06:17.600 --> 00:06:19.520 you can move money from there," but, hey, 96 00:06:19.600 --> 00:06:21.480 that's not what we want to do as a consumer. 97 00:06:22.180 --> 00:06:26.420 So I think that is something which is very difficult in today's world. 98 00:06:27.120 --> 00:06:31.600 And when you just look into it, the problem is not the applications. 99 00:06:32.140 --> 00:06:35.620 The problem is not that I'm in an Emirates loyalty program, 100 00:06:35.680 --> 00:06:39.100 and that loyalty program process to get those points is difficult. 101 00:06:39.640 --> 00:06:44.240 The problem is how they're interconnected, or the problem is the rails. So 102 00:06:45.740 --> 00:06:49.340 what if I just say that all of this was just money? 103 00:06:50.120 --> 00:06:55.080 What I mean by that, there's this one look on your screen, which says, 104 00:06:55.940 --> 00:07:00.760 "Well, I have 25 applications, and if you look at the applications, 105 00:07:00.820 --> 00:07:04.620 there's one on Starbucks, I have 207 Stars, or points, 106 00:07:04.880 --> 00:07:06.840 then I have another app where I have like 500, 107 00:07:07.360 --> 00:07:09.280 then I have another app which has like another 500, 108 00:07:09.520 --> 00:07:14.400 then I have another one which is 175." Now, what are these worth? 109 00:07:16.440 --> 00:07:20.880 How many of us can actually figure out what they are worth? I mean, 110 00:07:21.140 --> 00:07:23.360 it's a rhetorical question, and nobody knows that. 111 00:07:24.600 --> 00:07:29.380 But then I go to a different slide, or a different prospect, where I just say, 112 00:07:29.440 --> 00:07:33.280 "Hey, I'm going to give you like $5." And what does $5 mean? 113 00:07:33.940 --> 00:07:37.620 It's in the form of a stablecoin. You can spend it wherever you want. 114 00:07:39.020 --> 00:07:43.780 And I can take all the flights, 115 00:07:44.480 --> 00:07:45.313 and I can go out, 116 00:07:45.680 --> 00:07:50.460 and I can leverage it very easily into wherever I 117 00:07:50.520 --> 00:07:53.020 want, which means I'm creating an interoperable loyalty, 118 00:07:53.940 --> 00:07:58.140 which also will bring it back to the questions like, as a brand, 119 00:07:58.280 --> 00:08:01.520 I don't want 100% of my redemption. "As a brand, 120 00:08:01.860 --> 00:08:06.320 I don't want to go out and let people fly in United Airlines, 121 00:08:06.420 --> 00:08:10.980 but get those benefits in Emirates." And that's true. 122 00:08:11.320 --> 00:08:14.140 So one way to look at this from a business perspective is, 123 00:08:14.140 --> 00:08:15.820 "I'm creating loyalty, 124 00:08:15.880 --> 00:08:19.740 and I'm forcing customers." But if you look at the pattern of people today, 125 00:08:19.880 --> 00:08:20.713 the Gen Zs, 126 00:08:21.680 --> 00:08:25.160 Gen Zs are not buying Porsches because of the brand value. 127 00:08:25.280 --> 00:08:30.060 They're happy to go out and buy a Chinese car because it is giving them 128 00:08:30.320 --> 00:08:35.040 much more benefits at one-third or one-fifth of the pricing. So, 129 00:08:35.600 --> 00:08:38.480 and it's not that there's any quality difference, 130 00:08:38.980 --> 00:08:43.860 there's a massive amount of brand value or goodwill that has been put on those 131 00:08:43.920 --> 00:08:48.020 pricing of those products, which is like basically taking away all your sales. 132 00:08:48.800 --> 00:08:51.260 So on one side, you can always be like, "Okay, 133 00:08:51.440 --> 00:08:56.240 I'm not going to go out and do this and keep losing because as a 134 00:08:56.320 --> 00:09:00.920 product, if the product is good, Gen Zs are going to use it" versus "Okay, 135 00:09:01.120 --> 00:09:04.800 I will go out and hold them under the whole thing of 136 00:09:06.120 --> 00:09:09.200 a particular brand." And even with different brands, 137 00:09:09.360 --> 00:09:13.440 I think this is also important. And one of the use cases that I did with a 138 00:09:13.480 --> 00:09:14.920 company called Flipkart in India, 139 00:09:15.440 --> 00:09:20.120 I'll show you why even if it is interoperable, it makes sense. 140 00:09:21.160 --> 00:09:23.640 So why stablecoins? I mean, 141 00:09:23.840 --> 00:09:27.160 I tried to find everything on Google which could be good about stablecoins, 142 00:09:27.400 --> 00:09:28.360 and I wrote them here, 143 00:09:28.960 --> 00:09:32.880 which is like everything has a very good clarity like, "Stablecoins, 144 00:09:33.000 --> 00:09:36.440 I can see everything on my blockchain." But then the question is: 145 00:09:37.080 --> 00:09:41.440 which stablecoin is it? Is it the KlarnaUSD? Is it the Circle's USDC, 146 00:09:41.920 --> 00:09:46.680 or is it some other stablecoin which is issued by a brand? So, yeah, 147 00:09:46.840 --> 00:09:48.840 I mean, stablecoins can go out and do that, 148 00:09:49.280 --> 00:09:54.040 but the whole point about these stablecoins is they can become interoperable 149 00:09:54.160 --> 00:09:58.040 because if you remember the initial slide, I said the apps are not the problem, 150 00:09:58.320 --> 00:10:01.920 the rails are. All these stablecoins, even though 151 00:10:03.480 --> 00:10:06.320 they can be created in different brand values, 152 00:10:06.880 --> 00:10:09.760 but if they are following a particular act or a regulation, 153 00:10:10.160 --> 00:10:14.760 which means they are exactly one-is-to-one interoperable between each other. So 154 00:10:16.000 --> 00:10:19.320 that is much more clear, that is much more transparent. 155 00:10:19.880 --> 00:10:23.760 And the other thing also is it can actually go out and get you something which 156 00:10:23.800 --> 00:10:25.960 is programmable. What does that mean? 157 00:10:26.680 --> 00:10:31.160 It means that a KlarnaUSD stablecoin can actually be 158 00:10:31.280 --> 00:10:33.640 redeemed by, let's say, 159 00:10:33.760 --> 00:10:38.760 a DoorDash stablecoin only based on the programming that has been done between 160 00:10:38.840 --> 00:10:41.280 them. So they can still be interoperable, 161 00:10:41.760 --> 00:10:44.000 they can still move here and there wherever they want, 162 00:10:44.400 --> 00:10:45.920 but when you're going out and doing that, 163 00:10:46.120 --> 00:10:50.360 you can actually program it for various use cases within the stablecoin. 164 00:10:50.680 --> 00:10:54.360 And that is what the smart contract capabilities on the blockchain give you. 165 00:10:55.000 --> 00:10:58.680 They're much more flexible. They're instant because on the blockchain, 166 00:10:58.800 --> 00:11:01.280 the block times are like milliseconds, seconds. 167 00:11:02.000 --> 00:11:05.680 They're easy to integrate because you're not actually integrating an entire 168 00:11:06.360 --> 00:11:09.080 system. You can just integrate it through APIs. 169 00:11:09.160 --> 00:11:13.240 The blockchains are becoming that ready today. They're composable. 170 00:11:13.520 --> 00:11:15.080 They can move from one place to another, 171 00:11:15.200 --> 00:11:19.280 one system to another without months and days of 172 00:11:19.800 --> 00:11:23.320 integration between one system and another because on the blockchain, 173 00:11:23.440 --> 00:11:26.480 you're just doing a smart contract integration, which is much easier to do. 174 00:11:27.000 --> 00:11:31.080 And it creates a seamless way to move money. And, 175 00:11:31.840 --> 00:11:33.120 at the end, it is, 176 00:11:33.360 --> 00:11:38.200 I don't know why says "No enterprises delays," but it still... Sorry. Yeah. 177 00:11:38.480 --> 00:11:39.960 It brings a lot of that... 178 00:11:41.440 --> 00:11:45.220 If the Marriott program was running on stablecoins, I could have instantly, 179 00:11:45.280 --> 00:11:46.460 the moment I would have checked out, 180 00:11:46.620 --> 00:11:50.080 I would have instantly got my points within two seconds. So, 181 00:11:51.600 --> 00:11:53.560 what powers all these things under the hood? 182 00:11:54.920 --> 00:11:59.300 When you look at it from a perspective of the technicalities and like what you 183 00:11:59.320 --> 00:12:02.600 would have to embed into your systems, 184 00:12:03.440 --> 00:12:07.360 I'm just breaking it down. One: like from a purchase perspective, 185 00:12:08.520 --> 00:12:12.800 what are the rules that you want to create? Which means that on a lot of loyalty 186 00:12:12.880 --> 00:12:16.620 programs, what you do is you say, "If you use my card, 187 00:12:16.660 --> 00:12:19.380 or if you use my loyalty program, if you use my product... 188 00:12:19.380 --> 00:12:22.060 " Let's say a payment product to buy a particular airline. 189 00:12:22.240 --> 00:12:26.460 So let's say I'm an American Express card. American Express card says, 190 00:12:26.460 --> 00:12:29.180 "If you go out and buy Cathay Pacific airlines, 191 00:12:29.600 --> 00:12:32.340 we will give you more points, 10x points, 192 00:12:33.180 --> 00:12:35.820 versus if you go out and buy a United Airlines, 193 00:12:36.240 --> 00:12:38.140 we'll give you less points." So effectively, 194 00:12:39.160 --> 00:12:42.860 the whole thing about here is you can actually embed these rules within the 195 00:12:42.880 --> 00:12:43.600 system, 196 00:12:43.600 --> 00:12:47.580 which means the moment the contracts are going out and engaging with a Cathay 197 00:12:47.660 --> 00:12:50.220 Pacific, which is written in the smart contract, 198 00:12:50.280 --> 00:12:52.720 it will automatically create those accounting rules, 199 00:12:53.280 --> 00:12:54.620 and it will automatically give it to you. 200 00:12:55.100 --> 00:12:56.560 So you're not accounting it at a backend. 201 00:12:56.780 --> 00:13:00.180 There is no software required for you to actually go out and create that 202 00:13:00.240 --> 00:13:05.000 backend, soft backend integration and it also gives you a very powerful tool. 203 00:13:06.420 --> 00:13:09.040 I think when I was at Amex, and this was five years ago, 204 00:13:09.120 --> 00:13:12.100 so I don't know what is the latest on that, but five years ago, 205 00:13:13.320 --> 00:13:18.080 when a brand who was associated with American Express used to actually go out 206 00:13:18.140 --> 00:13:20.520 and they wanted to go out and launch a particular service, 207 00:13:20.980 --> 00:13:22.600 or like a brand program, 208 00:13:22.840 --> 00:13:27.120 or like anything which has to do with like their specific 209 00:13:27.500 --> 00:13:29.360 programs that Amex has built for them, 210 00:13:29.980 --> 00:13:34.120 they had to wait for Amex to actually go out and give them approvals. Why? 211 00:13:34.360 --> 00:13:39.280 Because, first, Amex used to check whether they are eligible for it. Second, 212 00:13:40.440 --> 00:13:45.240 and the biggest fight that used to happen was, "Hey, Amex, 213 00:13:45.440 --> 00:13:49.840 you created this program and activated it on your website at 10:00 p.m." 214 00:13:51.340 --> 00:13:53.900 And the program was launched at 12:00 a.m., 215 00:13:55.140 --> 00:13:58.360 but since you took 10 hours or whatever in between, 216 00:13:59.080 --> 00:14:03.240 any purchases that happened there is not because of you. It is because of the 217 00:14:03.400 --> 00:14:05.320 organic traffic that was coming on the website. 218 00:14:06.100 --> 00:14:08.120 And this used to be one of the biggest fights. 219 00:14:08.580 --> 00:14:10.780 And I think if you guys are running brand programs, 220 00:14:10.860 --> 00:14:15.740 I think this for sure is a problem when it comes to like 221 00:14:16.540 --> 00:14:19.180 how many things were eligible for a particular program. 222 00:14:20.100 --> 00:14:24.200 So all these things actually from a perspective of smart contracts, 223 00:14:24.740 --> 00:14:26.440 you can actually go out and build those rules. 224 00:14:27.180 --> 00:14:31.120 It is real time so you don't have to worry about when the program get activated. 225 00:14:32.200 --> 00:14:35.040 And the last thing is, when you want to create those interoperabilities, 226 00:14:35.220 --> 00:14:39.480 it is much easier for you to actually go out and do that. So that is one. 227 00:14:39.660 --> 00:14:40.493 The second thing is, 228 00:14:41.000 --> 00:14:45.000 now where do all these stablecoins or loyalty stablecoins 229 00:14:45.840 --> 00:14:48.700 reside? And that is where wallets come in. Now, 230 00:14:48.880 --> 00:14:53.210 wallets from a perspective of it is like something that you can just go out, 231 00:14:53.860 --> 00:14:57.250 integrate within your own application. So you're not building a new application, 232 00:14:57.750 --> 00:15:01.100 you're not going out and creating a different SDK tool. 233 00:15:01.170 --> 00:15:03.850 You're not doing months of work to go out and do things. 234 00:15:04.410 --> 00:15:07.810 It can be much easily integrated within your system to hold 235 00:15:10.130 --> 00:15:11.750 all these stablecoins that are coming in. 236 00:15:12.430 --> 00:15:15.400 So you don't have to go through the complexities of like 2017, 237 00:15:15.400 --> 00:15:19.250 '18 where you need to remember a 24-phase, seat phase, 238 00:15:19.330 --> 00:15:22.090 otherwise you lose everything. You don't have to worry about, 239 00:15:22.090 --> 00:15:25.770 "How do I pay for those transactions?" Because all of that is extracted away. 240 00:15:26.250 --> 00:15:27.870 You do not need to know anything about it. 241 00:15:28.250 --> 00:15:32.570 It can work in as simple fashion as possible. 242 00:15:33.050 --> 00:15:36.430 So that is something which is the second one. And again, 243 00:15:36.630 --> 00:15:41.130 you can actually go out and give the ownership of these assets to the users 244 00:15:41.210 --> 00:15:43.790 itself, which means that in a noncustodial way, 245 00:15:44.150 --> 00:15:46.670 even if you are going out and creating it as a stablecoin, 246 00:15:47.190 --> 00:15:50.990 you do not have to go through all the licensing as well. So I think that is 247 00:15:51.030 --> 00:15:54.190 where the wallets come in. And then from a settlement perspective, 248 00:15:54.330 --> 00:15:56.950 which is where the blockchains come in and so many blockchains in the world, 249 00:15:57.490 --> 00:15:59.350 I don't want to go into how blockchains work, 250 00:15:59.410 --> 00:16:02.470 but so many of these blockchains which exist, you can choose any ledger. 251 00:16:02.730 --> 00:16:07.410 I think there is no difference in using a particular type of blockchain 252 00:16:07.990 --> 00:16:11.390 or not using something like that. And what, 253 00:16:11.890 --> 00:16:14.390 as an end result, happens is, first, 254 00:16:15.170 --> 00:16:18.610 in your existing loyalty programs, in general, 255 00:16:18.750 --> 00:16:20.390 like there will be better programs for sure, 256 00:16:20.870 --> 00:16:25.650 where you have like 30 days to go out and have those loyalty programs settle 257 00:16:26.350 --> 00:16:28.530 and make mistakes sometimes. 258 00:16:28.710 --> 00:16:32.990 And then you are putting out resources from a customer care perspective, 259 00:16:33.450 --> 00:16:37.190 trying to go out and fight, "Hey, this is not what my reward should be. 260 00:16:37.890 --> 00:16:41.770 My reward should be lesser, high-" Nobody will say that. 261 00:16:41.770 --> 00:16:44.650 My reward should be always higher and all those things. And the second is where 262 00:16:44.830 --> 00:16:46.190 everything is settling onchain. 263 00:16:46.770 --> 00:16:49.590 The way it is settling onchain is very much visible. 264 00:16:50.230 --> 00:16:55.190 You do not have to have like a back account office or an accounting firm 265 00:16:55.270 --> 00:16:57.090 to actually go out and take care of it, 266 00:16:57.690 --> 00:17:02.150 and everything settles in a much faster manner. And now, 267 00:17:02.570 --> 00:17:06.930 I think this is one of the most important slides because the one apprehension 268 00:17:06.950 --> 00:17:09.270 that I said at the start was, 269 00:17:09.270 --> 00:17:13.370 "If I get all my loyalty programs redeemed, 270 00:17:13.870 --> 00:17:15.240 I am losing money, 271 00:17:15.240 --> 00:17:18.880 and I don't want my loyalty programs to be so good that they can be 100% 272 00:17:19.220 --> 00:17:24.130 redeemed." So here's a way in which I want to convince you as a finance 273 00:17:24.150 --> 00:17:27.720 guy that this is a wise decision. 274 00:17:28.350 --> 00:17:31.210 And why is this a wise decision? The first one on the balance sheet, 275 00:17:31.690 --> 00:17:32.550 one of the biggest things, 276 00:17:33.720 --> 00:17:38.310 and this is working with a brand where basically when you go out and create 277 00:17:38.330 --> 00:17:39.350 these loyalty programs, 278 00:17:39.890 --> 00:17:42.770 since they're not the expense on your balance sheet till redeemed, 279 00:17:43.410 --> 00:17:48.210 they effectively are treated as contingent liabilities. 280 00:17:48.210 --> 00:17:50.460 Too much jargon, but like very simply put, 281 00:17:51.050 --> 00:17:54.110 they accumulate under, not in your balance sheet, 282 00:17:54.550 --> 00:17:57.430 but alongside your balance sheet. And when people redeem it, 283 00:17:57.730 --> 00:18:00.810 they effectively move from alongside your balance sheet into your balance sheet 284 00:18:00.910 --> 00:18:05.810 and become an expense item. And the problem here is one, 285 00:18:07.150 --> 00:18:10.510 the price is not public, the prices change. 286 00:18:10.950 --> 00:18:13.930 So the amount of expense in your balance sheet sometimes could be very high, 287 00:18:14.210 --> 00:18:15.470 sometimes it could be very low. 288 00:18:16.070 --> 00:18:20.030 So you do not really know till the end of the year how much you have actually 289 00:18:20.090 --> 00:18:23.670 spent by just looking at the numbers. As a stablecoin, 290 00:18:23.910 --> 00:18:27.730 when you look at this as a number, you can actually see that, okay, 291 00:18:28.310 --> 00:18:31.430 300,000 token spend means $300,000 spent. 292 00:18:32.330 --> 00:18:37.290 The second one is it is replacing a lot more of those platforms today that 293 00:18:37.370 --> 00:18:41.710 are built from a loyalty perspective because you do not need the accounting. 294 00:18:42.330 --> 00:18:46.170 You do not need to go out and create like a proper paper trail because 295 00:18:46.230 --> 00:18:47.730 everything is happening on the blockchain. 296 00:18:48.150 --> 00:18:50.010 And since those blockchains are public blockchains, 297 00:18:50.070 --> 00:18:52.630 the cost of that infrastructure is not in your balance sheet. 298 00:18:53.250 --> 00:18:57.590 So that is the second benefit that you have. The third on this one is also like 299 00:18:57.610 --> 00:18:59.310 you're not reconciling between brands, 300 00:18:59.730 --> 00:19:03.270 where a lot of people who are running like massive loyalty programs are spending 301 00:19:03.310 --> 00:19:05.410 most of their time-in reconciliations, 302 00:19:05.950 --> 00:19:09.410 in going out and convincing that this is when it started, this is when it ended, 303 00:19:09.470 --> 00:19:10.990 this is how much it has been redeemed for. 304 00:19:11.470 --> 00:19:14.310 So all those things from an operating perspective are going away. 305 00:19:14.690 --> 00:19:17.050 So that's the cost that you're saving. And the third thing is, 306 00:19:19.250 --> 00:19:23.850 which is kind of like something that can only happen because of a stablecoin 307 00:19:24.150 --> 00:19:27.870 is you can actually go out and distribute the stablecoin, 308 00:19:28.130 --> 00:19:30.710 but you can actually go out and keep those dollars in the bank, 309 00:19:31.490 --> 00:19:34.870 or you can go out and buy a treasury from that particular thing, 310 00:19:34.970 --> 00:19:39.410 which means that all the loyalty points, till the time they are not redeemed, 311 00:19:39.730 --> 00:19:44.280 are generating revenue for you, which means like your lawyer... 312 00:19:44.330 --> 00:19:48.710 So till the time... So let's say I go out and I have a loyalty point, 313 00:19:48.770 --> 00:19:51.130 which I can like, let's say you set up a minimum, which is like, 314 00:19:51.670 --> 00:19:54.760 until and unless your minimum balance does not touch $50, 315 00:19:55.750 --> 00:19:58.930 I will not allow you to redeem it. If you have a million people, 316 00:20:00.370 --> 00:20:01.570 and out of those million people, 317 00:20:01.710 --> 00:20:06.570 900,000 people are achieving it and 100,000 people are never achieving 318 00:20:06.610 --> 00:20:11.390 it, which means you have money, which is earning yield, whatever is the yield, 319 00:20:11.530 --> 00:20:12.730 whichever country you are, 320 00:20:13.130 --> 00:20:17.230 you are earning a yield on that money till the time someone is redeeming that 321 00:20:17.350 --> 00:20:20.330 money, which becomes your revenue item. 322 00:20:20.930 --> 00:20:24.350 And I'm not saying this will completely cover all the cost of loyalty, 323 00:20:24.790 --> 00:20:28.970 but what I'm saying is it will go out and take care of all the 324 00:20:29.290 --> 00:20:32.750 expenses that you were trying to prevent by creating a loyalty system, 325 00:20:33.290 --> 00:20:36.670 which couldn't be redeemed 100%. So that is, I think, 326 00:20:36.730 --> 00:20:40.410 one of the biggest benefits that you can actually go out and create. 327 00:20:40.910 --> 00:20:44.450 And it might be like if your loyalty program is set in a way, 328 00:20:44.990 --> 00:20:49.750 it could become a profit center. And is it easy? That is, 329 00:20:49.810 --> 00:20:53.680 I think, the question. The point is from a technical perspective, 100%, 330 00:20:54.750 --> 00:20:59.470 but where is the biggest complexity? One, how you set up those programs. 331 00:20:59.750 --> 00:21:04.090 So you have to set up those programs in a way where it is compliant from the 332 00:21:04.130 --> 00:21:08.610 regulations perspective. The second biggest challenge is explaining. 333 00:21:08.890 --> 00:21:13.170 And I think I take this example often. When you look at banks, 334 00:21:13.870 --> 00:21:18.850 one of the reasons why when you move money through banks and it is slow is 335 00:21:18.950 --> 00:21:20.730 not because banks are inefficient. 336 00:21:21.730 --> 00:21:25.870 It is because they make their most money when the money is in their system. 337 00:21:26.710 --> 00:21:28.010 And that is how they make their money, 338 00:21:28.830 --> 00:21:33.170 which we call as "float." So every time a bank is taking four days to deliver 339 00:21:33.210 --> 00:21:35.150 your money from point A to point B, 340 00:21:35.930 --> 00:21:38.490 they're not doing it because they can't deliver it instantly. 341 00:21:39.430 --> 00:21:43.730 They're doing it because they are making money out of it. So the whole idea is, 342 00:21:44.390 --> 00:21:46.630 and when organizations become super big, 343 00:21:47.530 --> 00:21:51.510 now I can convince a bank that even if you go out and deliver the money 344 00:21:51.610 --> 00:21:53.170 instantly, you will still make more money, 345 00:21:53.850 --> 00:21:58.570 but the problem is the balance sheet items are divided into different people or 346 00:21:58.630 --> 00:22:03.330 different kind of departments. So one department's revenue means 347 00:22:03.450 --> 00:22:05.250 another department's revenue is going down, 348 00:22:05.670 --> 00:22:08.310 but even though your entire balance sheet is making more money, 349 00:22:08.850 --> 00:22:13.830 but this person is not happy, so he will not let this person go up. So I mean, 350 00:22:13.890 --> 00:22:17.070 that has been one of the biggest challenges when you explain it to the brands, 351 00:22:17.790 --> 00:22:19.830 like how these organizational changes happen. 352 00:22:21.310 --> 00:22:24.810 And the question isn't like if this happens, the question is: 353 00:22:25.230 --> 00:22:26.550 who are the people who are moving first? 354 00:22:26.610 --> 00:22:29.150 Who are the people who are already taking benefit of it? 355 00:22:29.830 --> 00:22:33.830 And how much time will you take to convince your organization that this is the 356 00:22:33.850 --> 00:22:38.810 right move? So let's talk about who is already moving money around it. 357 00:22:39.450 --> 00:22:41.030 How many of you have heard of Mercado Libre? 358 00:22:43.910 --> 00:22:46.670 So Mercado Libre has been running a loyalty program. 359 00:22:46.850 --> 00:22:49.330 I don't know if you guys have been a part of it or not, 360 00:22:50.010 --> 00:22:52.950 but Mercado-and we have not worked with them on this brand position, 361 00:22:53.030 --> 00:22:56.430 I'm just giving this as an example because I saw it as a very good example to 362 00:22:56.470 --> 00:22:59.310 give-Mercado Libre, I think for a year, 363 00:22:59.690 --> 00:23:03.730 actually ran this program as a loyalty program without calling it a stablecoin. 364 00:23:04.710 --> 00:23:08.710 And now I think recently they've announced that they're converting that entire 365 00:23:08.750 --> 00:23:11.290 program into a stablecoin program, 366 00:23:12.170 --> 00:23:14.810 which means they studied what people are liking. 367 00:23:14.990 --> 00:23:18.570 They studied what people are not liking. They did not disclose the value of it, 368 00:23:18.870 --> 00:23:23.270 but ultimately now they're disclosing that value. So that is one. The second is, 369 00:23:23.590 --> 00:23:26.050 I'll take the example of Flipkart now, 370 00:23:26.450 --> 00:23:29.230 and this has to associate with the example where I said, 371 00:23:29.750 --> 00:23:34.550 or "Why should I make my loyalty programs interoperable with each 372 00:23:34.610 --> 00:23:36.110 other?" Now with Flipkart, 373 00:23:36.190 --> 00:23:40.070 one of the biggest problems-they had two big problems-one problem was that they 374 00:23:40.110 --> 00:23:44.230 were actually going out and the amount of vouchers that they were issuing, 375 00:23:44.790 --> 00:23:46.530 they were unable to redeem them, 376 00:23:46.810 --> 00:23:50.670 and their contingent liability in the balance sheet was increasing. 377 00:23:51.170 --> 00:23:55.430 So they were reaching a point that they would have reached where they would have 378 00:23:55.530 --> 00:24:00.190 not been able to issue any more vouchers because it was going beyond the 379 00:24:00.230 --> 00:24:04.210 threshold of the risk they wanted to take. 380 00:24:05.230 --> 00:24:07.230 So that was one challenge. And the second one was, 381 00:24:07.610 --> 00:24:09.310 so let's say I'm buying an Apple phone, 382 00:24:10.050 --> 00:24:14.130 and the voucher that I'm getting is for a brand which is not Apple. 383 00:24:14.190 --> 00:24:16.630 So let's say I'm getting a Samsung voucher. Now, 384 00:24:16.690 --> 00:24:20.450 how many of you who are using an Apple phone will buy a Samsung phone just 385 00:24:20.470 --> 00:24:24.590 because you got a Samsung voucher? I hope nobody. Yes. 386 00:24:25.670 --> 00:24:27.050 So that is exactly what was happening. 387 00:24:27.410 --> 00:24:32.270 So it was not that Flipkart on their platform was not having people who did not 388 00:24:32.350 --> 00:24:33.590 want to buy Samsung phones. 389 00:24:34.170 --> 00:24:38.550 It was the people who were having the vouchers were not at all interested in 390 00:24:38.590 --> 00:24:42.550 those vouchers. So what we did, we actually tokenized these vouchers, 391 00:24:43.290 --> 00:24:47.650 created a secondary marketplace, and we actually went out and we said, 392 00:24:47.650 --> 00:24:52.310 "Whoever wants to buy..." So let's say I buy an iPhone which is 393 00:24:52.570 --> 00:24:56.610 worth, let's say, $1,000, and I get a voucher worth a hundred dollars. Now, 394 00:24:56.670 --> 00:24:58.570 when I get this voucher worth $100 for me, 395 00:24:58.690 --> 00:25:03.130 because I will never buy a Samsung phone, is zero. On the marketplace, 396 00:25:03.230 --> 00:25:06.870 what you could do is you could actually list it for a price. So you list it for, 397 00:25:06.930 --> 00:25:10.970 let's say, $50, which means anyone who is buying that, 398 00:25:11.290 --> 00:25:15.800 the benefit for him is that he's able to go out and get an additional $50 399 00:25:16.650 --> 00:25:20.750 benefit from that voucher. The person who is selling it is getting a value out 400 00:25:20.770 --> 00:25:24.470 of it. And even when you're not running a program or an incentive, 401 00:25:25.330 --> 00:25:28.690 at that point, let's say there is no sale, there is no Christmas sale, 402 00:25:29.050 --> 00:25:31.890 there's no New Year sale happening on your platform, 403 00:25:32.570 --> 00:25:37.330 you are giving them an opportunity to actually go out and come to your platform 404 00:25:37.370 --> 00:25:40.790 because there is a random voucher in a marketplace which they can buy, 405 00:25:41.450 --> 00:25:44.810 and they can get the Samsung phone for $50 less. 406 00:25:45.770 --> 00:25:47.850 So that is where the sales increased. 407 00:25:48.390 --> 00:25:52.790 And we did this experiment with 45 brands from the likes of Apple, Coca-Cola, 408 00:25:54.370 --> 00:25:57.050 Samsung, and a lot of the other brands. 409 00:25:57.550 --> 00:26:01.790 And the ROI on the GMV, which is the gross margin that they were like, 410 00:26:01.850 --> 00:26:03.190 the gross value that they were selling, 411 00:26:04.270 --> 00:26:09.130 an average 16x jump foresee. As a platform, 412 00:26:09.990 --> 00:26:14.730 they started selling more as compared to Amazon just because 413 00:26:14.770 --> 00:26:18.030 people could come to their platform and they could get things cheaper even when 414 00:26:18.050 --> 00:26:22.650 there was no sale going on. From a perspective of Samsung, 415 00:26:22.750 --> 00:26:24.690 they were able to pinpoint their user base, 416 00:26:25.050 --> 00:26:26.730 which everything is happening on a blockchain, 417 00:26:26.790 --> 00:26:29.270 which means tomorrow when you go back to the brand, 418 00:26:29.550 --> 00:26:34.150 you can actually prove it-that these are the actual customers I can show you 419 00:26:34.190 --> 00:26:35.830 onchain that have bought the vouchers. 420 00:26:36.550 --> 00:26:41.150 And now when you're going to the brand to sell this as a different advertisement 421 00:26:41.190 --> 00:26:44.870 platform, you're proving the numbers, you're going out and saying, 422 00:26:45.030 --> 00:26:49.150 "I know exactly out of the 400 million people using my platform, 423 00:26:49.650 --> 00:26:54.210 these are the targeted 100,000 people who have actually bought a Samsung phone, 424 00:26:54.730 --> 00:26:58.650 which means next time when I'm going to go out and market your Samsung product, 425 00:26:59.050 --> 00:27:02.210 I'm going to go out and do that through those 100,000 people, 426 00:27:02.370 --> 00:27:05.850 which means I will have much targeted sales." So overall, 427 00:27:06.310 --> 00:27:10.250 my whole point being that you are able to go out and increase your sales. 428 00:27:11.170 --> 00:27:13.710 So that is kind of like a counter to the point that, 429 00:27:13.710 --> 00:27:16.350 "Why should I go out and give it to some other brand?" Then, 430 00:27:16.370 --> 00:27:17.590 the second one is JioBrowser. 431 00:27:17.950 --> 00:27:22.730 I think this is a browser that launched three years back with 432 00:27:22.910 --> 00:27:27.110 almost, for two-and-a-half years, it had 5,000 users. 433 00:27:27.970 --> 00:27:30.590 And what we did is we created this coin, 434 00:27:30.790 --> 00:27:33.070 which is pegged to an INR stablecoin. 435 00:27:33.670 --> 00:27:35.390 And effectively what we did is like we said, "Why don't you-" And Jio, 436 00:27:37.990 --> 00:27:38.730 by definition, 437 00:27:38.730 --> 00:27:42.610 it is like the richest man of Asia whose company is Reliance and he has like 438 00:27:42.610 --> 00:27:44.330 6,000 companies running in India. 439 00:27:45.150 --> 00:27:47.950 So what he did is he started this with a browser. 440 00:27:48.450 --> 00:27:51.970 The first thing people did is like people started using it because they were 441 00:27:51.990 --> 00:27:54.390 getting coins, and they had no idea what these coins are. 442 00:27:55.090 --> 00:27:58.510 So they're not going to the browser because they are feeling that they are 443 00:27:58.530 --> 00:27:59.750 getting something out of it, 444 00:28:00.190 --> 00:28:03.070 but they're feeling it might have some value in the future. So they started 445 00:28:03.270 --> 00:28:04.670 using it. In three months, 446 00:28:04.910 --> 00:28:08.030 we were able to increase the user base from 5,000 to 10 million. 447 00:28:09.110 --> 00:28:10.110 And then after that, 448 00:28:10.170 --> 00:28:13.690 what we did is like we started integrating it into all their loyalty programs or 449 00:28:13.790 --> 00:28:14.730 all their applications. 450 00:28:15.150 --> 00:28:19.390 So they have like around 700 different applications running on App Store, 451 00:28:19.390 --> 00:28:20.143 [Google] Play store, and everywhere, 452 00:28:20.230 --> 00:28:22.690 and this started percolating to all those applications. 453 00:28:23.270 --> 00:28:26.370 And when it started percolating to every application and the value was fixed, 454 00:28:26.790 --> 00:28:30.070 people realized that every time I'm using the browser and generating tokens, 455 00:28:30.510 --> 00:28:34.490 and these tokens I can use for going out and doing literally everything because 456 00:28:34.890 --> 00:28:38.290 as a brand, Reliance and Jio owns as a family business, 457 00:28:38.570 --> 00:28:41.930 literally everything in the country from being going to a gas station, 458 00:28:42.410 --> 00:28:44.070 to going out and getting a mobile recharge, 459 00:28:44.350 --> 00:28:48.290 to going out and getting food for your home, anything and everything. 460 00:28:48.870 --> 00:28:52.410 So I think that is another thing which is there. And I think I guess you guys 461 00:28:52.450 --> 00:28:55.130 would be much more privy to the company called Raise, 462 00:28:55.610 --> 00:28:59.610 which is right now going out and instead of going out and having those loyalty 463 00:28:59.670 --> 00:29:00.910 points or like vouchers, 464 00:29:01.350 --> 00:29:06.150 they're actually building a gift card business where they're saying all the cash 465 00:29:06.190 --> 00:29:09.130 back that people will get is not in the branding name, 466 00:29:09.610 --> 00:29:14.230 but they will get it in the form of a stablecoin. There are a lot more examples, 467 00:29:14.470 --> 00:29:16.850 and I want to give them for sure, but I don't have the time. 468 00:29:19.850 --> 00:29:23.670 And one of the question for you would be like, Polygon is a blockchain, 469 00:29:23.730 --> 00:29:26.910 why is it talking about loyalty? So from that perspective, 470 00:29:26.990 --> 00:29:31.090 I think all the three examples that I gave you today, like what are the things, 471 00:29:31.230 --> 00:29:32.670 what are the infra that you need? 472 00:29:33.110 --> 00:29:35.770 So I'm not saying we have a loyalty program that I'm selling to you guys. 473 00:29:36.210 --> 00:29:39.490 What I'm saying is like all these things are available for you if you want to 474 00:29:39.530 --> 00:29:44.110 actually go out and create that infrastructure for any of your brands. 475 00:29:44.610 --> 00:29:46.990 So you have the blockchain, you have the wallet, 476 00:29:47.310 --> 00:29:51.350 you have the payment infrastructure for us to be able to go out and deliver you 477 00:29:51.370 --> 00:29:53.440 the product if you want it. And 478 00:29:55.150 --> 00:29:58.410 this is like the line which I love the most. I don't know how I made this up, 479 00:29:58.930 --> 00:30:01.170 but: "Stripe made it simple to move money on the internet, 480 00:30:01.750 --> 00:30:06.250 that was chapter one. And chapter two is making it simple to move value." And I 481 00:30:06.290 --> 00:30:08.210 think from Stripe's perspective, 482 00:30:08.270 --> 00:30:12.830 this is also true because they are also going out and taking care of everything 483 00:30:12.870 --> 00:30:15.450 which is related to building a blockchain, to having a wallet, 484 00:30:15.830 --> 00:30:19.130 to going out and doing orchestration through stablecoins. 485 00:30:19.590 --> 00:30:23.790 So it's the same thing that they're doing, which is like where you are now, 486 00:30:24.090 --> 00:30:26.670 instead of just going out and making it simple to move money, 487 00:30:26.830 --> 00:30:31.390 you're making the money or the loyalty program programmable, 488 00:30:31.590 --> 00:30:35.910 composable, and trusted. So loyalty is where that chapter starts. 489 00:30:36.630 --> 00:30:40.730 So very quickly, your move. I think if you're a brand, 490 00:30:41.610 --> 00:30:43.750 pick one segment that is the best thing you should do. 491 00:30:44.410 --> 00:30:46.910 You don't have to go out and replace everything. 492 00:30:47.730 --> 00:30:51.710 Pick a particular segment, run a stablecoin-based cash back. 493 00:30:51.770 --> 00:30:53.770 You don't have to create your own stablecoin for that. 494 00:30:53.830 --> 00:30:57.150 There are 2,000 of them in the market already. You don't have to get your own 495 00:30:57.190 --> 00:30:59.890 blockchain. It's always like 2,000 blockchains in the market already. 496 00:31:00.430 --> 00:31:01.460 So pick one segment, 497 00:31:01.760 --> 00:31:06.000 run a stablecoin cash back alongside some of your existing business or some of 498 00:31:06.020 --> 00:31:08.440 your existing program, and let the data decide. 499 00:31:09.120 --> 00:31:13.700 So you're not actually going out and proving your management or your team that 500 00:31:14.160 --> 00:31:16.300 this makes sense because I said so. 501 00:31:16.600 --> 00:31:21.400 You're doing it because you can have actual data which can drive that result, 502 00:31:21.760 --> 00:31:24.060 and you can then show it to your brand. 503 00:31:24.540 --> 00:31:27.200 The second is from a builder's perspective, if you are someone who is, 504 00:31:27.640 --> 00:31:28.473 as a builder, 505 00:31:28.600 --> 00:31:31.340 you should go out and start building these products because these are the 506 00:31:31.360 --> 00:31:35.480 products that would become very important in the future. And for everyone else, 507 00:31:36.020 --> 00:31:39.960 if you want to figure out what else can we do, I have my email ID here, 508 00:31:40.160 --> 00:31:42.800 so you can actually just go out, ping me on my email ID, 509 00:31:43.000 --> 00:31:46.620 and I'm more than happy to help you guys out. Again, 510 00:31:46.780 --> 00:31:50.060 remember $48 billion. That's every dollar, 511 00:31:50.220 --> 00:31:54.760 which is a broken promise from a brand perspective, and stablecoins, 512 00:31:55.100 --> 00:31:57.000 let us keep it. Thank you, everyone.