How Blockchain will take Ambassador Marketing to the Next Level
1. Security Token Offering
With the rising popularity of blockchain technology initial coin offerings (ICOs) have become an increasingly popular means to raise capital in order to promote company growth. ICOs give any business the possibility to get funded by multiple investors that purchase tokens issued by the company which either let the buyer use their tokens on the platform or entitle them to certain benefits similar to buying stocks during a traditional IPO.
For Hypd, we have chosen the latter. Instead of creating a Utility Token, that would be volatile and therefore interesting for investors would be a nightmare for our platform that demands a stable and reliable currency and vice versa, we decided to let investors participate in the company’s success by issuing a Security Token. The HYPD Security Token is designed in a way that every token holder is entitled to receive dividends of all Hypd business operations’ profits. It is similar to a share or stock as opposed to Utility Tokens distributed in most other ICOs. This allows us to attract more investors that care about the project and also leverage their networks
2. Utility Token
Besides the HYPD Security Token, we will move our entire system to the blockchain, creating a token that is only tradable within the Hypd eco system. The token is in no way to be seen as some sort of an investment but instead this in-app currency. For every successfully performed action the Hypd ambassadors will earn tokens that are unique to each campaign and will be saved to their Hypd wallets. By using smart contracts for the campaigns and actions within the system we will be able to solve the two biggest pitfalls any brand ambassador program has to deal with while making major improvements to user experience that to this day are unparalleled
One of the biggest obstacles when running brand ambassador programs is asymmetrical information. If the campaign owner doesn’t know what their ambassadors are doing and the ambassador is not sure whether the action they just performed meets the criteria of the brand owner, these insecurities lead to nobody doing anything and thus ultimately to the failure of the program. Luckily we have already developed a system that prevents these drastic consequences from happening. However, moving the system to Blockchain will grant an even greater user experience. As we will set up every campaign and every action within it as a smart contract that will be stored on the blockchain, all information stored in these contacts is public and cannot be changed.
In business things often go differently as planned. Ambassador programs are no exception to that. It can happen that sometimes brands do not issue the rewards on time or not at all for whatever reason that may be. For now, the ambassador would of course still posses a claim against the brand owner but it would be incredibly tiring to enforce said claim. We are planning to solve this dilemma through the following logic: When brands sign up they will have to purchase the amount of in app tokens they are planning to issue to their ambassadors for successfully performed actions. There will therefore be a monetary value attributed to each token. This however will not be public but remain between Hypd and the individual brand. Should the brand fail to honour their duties resulting from the smart contract, we can therefore automatically reimburse the ambassador with the equivalent of fiat for the redeemed tokens and fine the brand on top. This way we can easily keep the level of disappointment on the ambassadors side reduced while incentivizing the brand to prioritise the issuance of rewards to their ambassadors without any hassle.
The usage of blockchain technology within the platform therefore also prevents cheating of any kind.