Cointime

Download App
iOS & Android

The Next Big Crypto Cycle

Validated Media

The Collapse of Trust and the Rise of Loyalty

It’s no secret that many view the crypto industry with suspicion.

2022 didn’t help. Meltdowns. Implosions. Bankruptcies. And the ongoing trial of Sam Bankman-Fried, which will consume the news media for 2023 and beyond. (Prediction: there will be a Netflix documentary.)

How do we, as an industry, regain trust?

The first way is to tie tokens to real value. Apart from stablecoins, most tokens are backed by nothing but people’s belief. During market panics, we’ve seen that belief is the first thing to go, soon followed by token price.

Stablecoins were a real innovation, because they’re backed by real dollars — at least, the good ones. Stablecoins have flourished as a result, and will likely be the first crypto asset to be regulated and properly integrated into the traditional financial system. (Another prediction.)

The BMJ token (and, we hope, other crypto loyalty programs to follow) are only minted when real revenue is received. This is different from stablecoins — we’re not holding the money in reserve — but it mirrors loyalty programs today, like frequent flyer programs or Starbucks Rewards.

The second way to regain trust is to give tokens real utility. Make them do something. Investors are fixated on tokens that just sit in a wallet, hoping that “price go up.” The BMJ Reward Token is something different: you can redeem it for real-world rewards.

This gives reward tokens an enormous advantage over other crypto tokens. If designed correctly, you don’t live under a black cloud of fear that they may be an “unregistered security.” Loyalty tokens are digital loyalty points, period. Just like Delta SkyMiles. Just like Starbucks Rewards.

The difference is utility: they’re not just tokens that you buy, hoping that the price will increase, based on the efforts of others. They’re tokens you are awarded as a paying customer, which you can collect and redeem for valuable real-world rewards.

Peace out, Howey.

This. On blockchain.

Real Rewards Cost Money

Let’s take a typical credit card reward program: you earn one reward point for every dollar spent. Then you can redeem these reward points for free flights, hotel stays, or even — gasp! — cash back.

These rewards, of course, cost real money.

Again, with crypto loyalty programs, we’re building real businesses that take in real revenue to make real products and services. This means all the beautiful, high-quality merch on our rewards page costs real money … just like credit card rewards for the credit card company.

So where does this money come from?

For credit card companies, it’s hidden in the interest and fees. The foolish consumers who don’t pay off their credit card bills in full each month pay interest, and their interest pays for your credit card rewards.

For your local coffee shop, they have enough profit margin built in that they can afford to give you a free coffee after you’ve bought ten (you probably bought ten pastries or muffins, too).

For those who are building their own crypto reward programs, you can solve the “real rewards cost real money” problem in a few ways:

  • You can mark up the initial product, or (more likely) the reward product, so you still make a profit;
  • You can offer digital downloads, which are essentially free to fulfill;
  • You can allocate some of the cost as a marketing expense (good loyalty programs will reduce customer churn and increase customer stickiness);
  • You can figure out what percentage of reward tokens will go unredeemed, and price accordingly.

On the topic of unredeemed tokens, here’s a valuable data point. When we did our initial token mint for the BMJ token, we found there were a number of users who never hooked up their MetaMask wallets. They paid real money for a Premium membership (RRE), but never claimed the tokens.

We’ve minted these tokens — some 17,680 — back into the master wallet, which we’re calling “BMJ Reserves.” The idea is that these can potentially be awarded to Premium members in the future. It’s a war chest that lets us invest back into the program, to make the loyalty flywheel go even faster.

Remember: the point of reward programs is to increase customer loyalty. Companies must view them like marketing or community-building efforts: the long-term benefits are increased customer happiness, decreased churn, and more sales. (More benefits = more business.)

The Great Crypto Cycles

When you’ve been in this industry a while, you see that it goes through cycles.

The easiest way to see these cycles is to look at the price of bitcoin:

But what’s happening behind the scenes looks something more like this:

That’s because each downturn in the cycle washes out the weakness. It gets rid of the gamblers and the degens, and it opens the doors for fresh building.

The downturns are not fun, but they’re valuable because they force us to pay attention to what really matters. To innovate. To hustle. To find new solutions.

Up markets are for speculators, but down markets are for builders. To simplify the crypto market cycles, it would look something like this:

Every down market in crypto gave birth to some new innovation that fueled the next up market, whether that was smart contract platforms, DeFi, or NFTs. The next wave of growth, we believe, will be fueled by reward tokens.

I’ve laid down the principles we’ve used to create our BMJ Reward Token, with the hope it will provide a model for future projects to follow. Principles like transparency and trust. Real revenue earned. Real-world rewards. And above all, thinking of blockchains like businesses.

https://jhargrave.medium.com/the-next-big-crypto-cycle-caf3c631162c

Comments

All Comments

Recommended for you

  • Amazon Shares Surge 15.2%, Biggest Gain Since 2012

    On July 31, Amazon shares surged 15.2% to $271.255 per share, marking their biggest gain since 2012, with a total market value of $2.92 trillion.

  • US Treasury Secretary Bessent Vows to Track Down Iranian Assets Globally for Terror Victims

    US Treasury Secretary Bessent said the US will actively track down Iranian assets worldwide to ensure compensation funds for victims of Iran-backed terrorist activities. Bessent stated that the US government's military and economic blockade measures against the Iranian regime will continue and will not be relaxed. (Jinshi)

  • Apple Plunges Nearly 10%, Q4 Revenue Guidance Misses Expectations

    On July 31, Apple (AAPL.US) plunged nearly 10% to $300.33, marking its biggest drop since April 2025. In terms of fundamentals, Apple's third-fiscal-quarter revenue rose approximately 16% year-over-year to $109.42 billion, slightly above analyst expectations. Among the details, product revenue came in at $78.68 billion, beating the expected $77.25 billion. However, services revenue—a key driver of its valuation re-rating in recent years—totaled $30.74 billion, missing the consensus estimate of $31.36 billion. Additionally, Greater China revenue reached $18.82 billion, with year-over-year growth slowing to 22%, also below analysts' forecast of $19.58 billion. During the earnings call, Apple guided fourth-fiscal-quarter revenue growth in the range of 9% to 11%, overall below the 12.1% analysts had expected. CFO Parekh noted that component supply constraints would impact iPhone, Mac, and iPad businesses in the fourth fiscal quarter, with currency fluctuations also constraining growth.

  • Three Fed Officials Back Rate Hike, Hawkish Pressure Builds

    On July 31, three Federal Reserve policymakers said that dissenting votes in favor of a rate hike this week stemmed from stubborn inflationary pressures, highlighting rising internal pressure on Fed Chair Warsh to act. In statements released Friday morning, Hammack and Kashkari said they worry that although the current round of price increases may stem from short-term factors such as President Trump's tariff policies and the Iran war, the inflation situation already warrants Fed action. Logan also joined in, saying that even if inflation cools, if the Fed does not raise rates, inflation is unlikely to fully fall back to the Fed's 2% target; without any policy constraints, inflation could continue to run above target until an unexpected shock occurs. Kashkari said that if inflation remains persistently stubborn, he might support a series of rate hikes, not just a single increase, to prevent inflation from becoming further entrenched. He said: "A series of small policy adjustments may be preferable to waiting for developments to unfold and ultimately having to take more forceful action." Hammack said that if the Fed does not tighten policy, price increases could continue to accelerate. She said: "Inflation has been stubbornly above 2% for more than five years, and I have no confidence that it will return to our target on its own." (Jin Shi)

  • US 10-Year Treasury Yield Rises to 4.7388%, Highest Since January 2025

    On July 31, the US 10-year Treasury yield rose to 4.7388%, the highest level since January 2025.

  • Spot Gold Intraday Decline Widens to 2%, at $4,021.08 per Ounce

    On July 31, spot gold's intraday decline widened to 2%, reported at $4,021.08 per ounce.

  • BTC Falls Below $63,000

    Market数据显示,BTC has fallen below $63,000, currently reported at $62,985.99, with a 24-hour decline of 2.99%. Market volatility is significant, please exercise risk control.

  • Fed's Logan: Leaning Toward 25 Basis Point Rate Hike

    On July 31, Federal Reserve Governor Logan said she leans toward a 25 basis point rate hike, believing inflation has not yet entered a sustainable path back to the Fed's 2% target. Logan stated that taking moderate action now would reduce the risk of needing more aggressive tightening in the future, while emphasizing that the Fed cannot rely on unexpected shocks to achieve its inflation target.

  • Fed's Logan: Taking Modest Actions Now Reduces Likelihood of Needing Stronger Action Later

    On July 31, Dallas Fed President Lorie Logan said that taking modest actions in the near term would reduce the likelihood of needing to take stronger action in the future.

  • Philadelphia Semiconductor Index Erases 5% Gain, Turns Lower

    On July 31, U.S. chip and semiconductor stocks rapidly weakened, with the Philadelphia Semiconductor Index wiping out a 5% gain and turning lower. Micron Technology, which had risen 6%, is now down 4.2%. SanDisk, which had gained nearly 10%, is now down over 6%. SK Hynix and Seagate Technology, which had risen over 8%, are now down 2%. TSMC, which had gained 4%, is now down nearly 1%.