Many mainstream companies that attempted to use non-fungible tokens (NFTs) for customer or user loyalty programs may have seized the opportunity prematurely, according to Juan Otero, CEO of the crypto-native travel booking platform Travala. He argued that these companies had not yet figured out the best ways to use NFTs in loyalty programs, ultimately leading to their failure. The adoption of NFTs for loyalty programs by such companies has tarnished the reputation of NFTs in the blockchain industry.
Otero insisted that mainstream companies should have onboarded users by offering crypto or NFT rewards as part of a free membership, rather than running these programs as trials adjacent to the main loyalty program. This approach significantly limited user participation and the attractiveness of the rewards. Otero believes that traditional companies jumped on the opportunity too early and did not integrate NFT-based loyalty programs effectively into their existing systems.
The NFT market and the metaverse still hold promise in an increasingly isolated world, according to Otero. The challenge lies in providing a worthwhile, engaging experience in the metaverse on a large scale without requiring an initial investment or expensive VR headsets. He emphasized the importance of creating a model that can be emulated across different ecosystems and communities to attract mainstream companies back to the space.
Travala.com has been operating as a crypto-native travel booking service for more than six years. Otero noted that the travel and hospitality industries faced a challenging period during the COVID-19 pandemic, which led to operational adjustments and changes in customer bookings. Despite these challenges, Travala.com focused on building and improving its platform in anticipation of market rebounds in both the travel and crypto industries.
Travala.com’s business-to-consumer clients are primarily millennial travelers who opt to pay exclusively with crypto. Only a small percentage of clients pay with credit cards, while the majority prefer to use crypto for bookings. The most popular digital asset used by Travala.com’s crypto-savvy clients is USDT, followed by BTC, ETH, and AVA, which offers an additional discount on bookings.
In terms of Bitcoin network fees, Otero highlighted the importance of keeping fees low for users to continue using Bitcoin as a payment method. High network fees may lead users to seek alternative assets for more cost-effective transactions, potentially reducing the number of daily Bitcoin transactions. Travelers can reduce their Bitcoin network fees by using the Bitcoin Lightning Network, depositing Bitcoin to their platform wallet, or purchasing Travel Credits with Bitcoin on Travala.com.
Otero also discussed the approval of crypto exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission, noting that it has been a significant milestone for the crypto industry. The approval of Bitcoin and Ethereum ETFs helps legitimize the industry and bridge the gap between traditional and blockchain-based finance. Otero sees the approval of an Ethereum ETF as another important step towards further regulatory clarity in the crypto industry.