Polygon Labs paid $4 million to host Starbucks Odyssey, the NFT-powered loyalty program that made headlines as a crypto biz-dev coup.
The deal became as soon as a hallmark of a “huge and flashy” enterprise construction plan that Polygon has since deserted, of us conversant in the topic mentioned.
Corporations on the total pay their tech vendors for companies and products rendered. For Starbucks’ soon-to-be-defunct foray into crypto on the Polygon network, it became as soon as the assorted advance around.
Polygon Labs paid $4 million to the espresso huge in 2022 as fraction of their deal to assemble and host a blockchain-based mostly entirely mostly loyalty program, Starbucks Odyssey, on the Polygon network, in step with two of us conversant in the topic. The payout ended a competitive hunt by proponents of a minimal of three blockchain ecosystems who wished to partner with Starbucks, a third person mentioned.
The beforehand unreported figure provides context to the origins of 1 of crypto’s flashiest crossovers into American consumer culture (and subsequent flops). Last week, Starbucks pulled the experience on Odyssey, its 18-month experiment in utilizing collectible non-fungible tokens as the anchor of a loyalty program.
The figure speaks to the designate of doing enterprise construction in crypto. In 2022 Polygon Labs pursued headline-grabbing partnerships with the likes of Nike and Starbucks, the form of corporations that can perchance elevate Polygon’s identify recognition. If huge brands had been utilizing Polygon as their launchpad for crypto, then perchance their huge buyer bases would apply swimsuit.
They didn’t.
“All these huge flashy presents are a remnant of the past and the outdated management’s plan,” mentioned an particular person conversant in Polygon Labs’ most up-to-the-minute pondering. The firm, the first developer of the Polygon blockchain, is now more livid about constructing modern tech than inking partnerships, the person mentioned.
Origins of Odyssey
The deal with Polygon seemingly wasn’t supreme a money play. Starbucks appears to dangle been if reality be told drawn to discovering a Web3 partner that can perchance host Odyssey. Its search became as soon as being led by Forum3, a advertising consulting store whose co-CEO Adam Brotman became as soon as as soon as Starbucks’ chief digital officer.
Brotman had conversations with representatives from Polygon to boot to Solana in early 2022, two of us privy to the discussions mentioned. Samson Mow, a longtime bitcoin booster, told CoinDesk he lobbied Starbucks to envision Liquid Community, a bitcoin layer-2.
Forum3 chose Polygon for its tech, one ragged Polygon employee mentioned. However the deal moreover got right here with the grant to boot to intensive technical and advertising pork as a lot as encourage Forum3 living up the Starbucks loyalty program, that person mentioned.
The Voyage Begins
Starbucks Odyssey sought to reimagine the espresso firm’s current loyalty program with a crypto tint, in step with a case watch printed by Forum3 in January. Individuals would fetch “stamps” (collectible NFTs) for finishing initiatives. They would perchance utilize those stamps to qualify for rewards bask in invitations to espresso-themed experiences or original branded swag.
The loyalty program promised to be a moneymaker for Starbucks. It sold these stamps for as a lot as $100 apiece. It seemingly transformed a quarter of one million bucks by taxing secondary gross sales of the stamps, in step with on-chain knowledge.
However Odyssey moreover had upside for its members, the sign merchants. They would perchance resell the stamps to others by blueprint of a digital storefront living up by Starbucks and Nifty Gateway, an NFT market.
Forum3’s case watch hailed the “measurable monetary designate” Odyssey might perchance create for Starbucks and its followers. The principle monetized Odyssey NFT series (the Siren Series) sold out in 18 minutes and immediate traded at a 4x top rate, in step with Forum3.
As occurs with many NFTs, Odyssey stumbled on a collector neighborhood that believed in its designate ability and wager huge. One such collector became as soon as Dan Elitzer, co-founder of the project capital company Nascent.
“We dangle not invested a large quantity when put next to what we in overall finish,” Elitzer mentioned in a January interview. Even so, Nascent believed that Odyssey NFTs can dangle prolonged-time duration designate if Starbucks Odyssey continued as the first huge NFT loyalty program, he mentioned.
Even sooner than Starbucks mentioned it might perchance shutter Odyssey, its NFTs designate proposition became as soon as below stress. The last Siren NFT to promote sooner than Starbucks’ March 15 announcement became as soon as priced at $215. On Tuesday prospective merchants had been offering a most of $86 per Siren NFT, whereas sellers wished a minimal of $165.
Representatives for Forum3, which as soon as billed itself as a Web3 firm but has since pivoted to AI, in step with its online page, didn’t reply to a query for comment.
The Odyssey Ends
Starbucks Odyssey succeeded in fostering a gap following for the length of its 18-month bustle as an invite-supreme “beta” program. Along with a vibrant Discord server, it impressed a cult following whose proponents traded the NFTs, boosted this plan on social media and even created a “Guidelines” online page to encourage of us strategize their facets-earning.
That neighborhood became as soon as in a sense of shock last week when Starbucks by surprise launched the Odyssey became as soon as ending. Individuals traded messages of ache, nettle, disappointment and wistful memories in its deepest Discord server, in step with screenshots of messages reviewed by CoinDesk.
“It’s positively rather upsetting as any individual who has save a whereas and $$ in but overall I designate the pivots of large enterprise and I’m gay that Starbucks tested the theorem that,” Bryan Kayne, a crypto manual and Odyssey member, mentioned in a Telegram message to CoinDesk.
In an electronic mail to CoinDesk, a representative for Starbucks mentioned: “We’re having a keep in mind forward to applying our learnings to the blueprint in which forward for this program.” She would not component what that future holds, nor whether or not this will continue working in Web3.
“We designate our relationship with Polygon and the contributions it has made to Starbucks Odyssey,” the representative mentioned. She would not disclose about the financials of its enterprise partnership with Polygon.
Previous Polygon, New Polygon
The Starbucks deal became as soon as an exemplar of the high-flying, huge-identify-forward dealmaking vogue Polygon pursued below the management of Ryan Wyatt. The ragged on-line gaming govt became as soon as Polygon Labs’ president from early 2022 till mid-2023, when, in step with two of us conversant in Polygon, he became as soon as ousted.
“Would possibly dangle to you keep in mind at Polygon Labs now, over the last nine months they’ve shifted their point of curiosity to become a tech powerhouse livid about ZK tech and presents which dangle more of a at as soon as affect on-chain in enlighten of promoting designate,” one supply mentioned.
The change moreover reflects the challenges of constructing crossover Web3 products for a non-crypto audience, paid deal or no. A pair of customers and proponents of Odyssey told CoinDesk the characteristic became as soon as constructed to accommodate of us who didn’t dangle a crypto pockets or an understanding of blockchains – in varied phrases, most human beings (and by extension most Starbucks prospects).
A ragged Polygon employee who worked on the Starbucks deal mentioned it became as soon as no surprise Odyssey is shutting down.
“Chasing Web2 is a idiot’s errand, in my leer,” the person mentioned, regarding established tech giants. “The crypto native legend is big ample can dangle to you play it trusty.”
Wyatt, who declined to comment by blueprint of a spokesperson at his most up-to-the-minute employer, Optimism Limitless, highlighted his emphasis on the advertising designate of dealmaking in recorded talks he gave after leaving Polygon.
“We had been in a really ravishing enlighten the place of us had been making an are attempting to build up certain tales and so a host of the efforts had been amplified,” Wyatt mentioned in an interview with crypto investing company Variant in September 2023, months after leaving Polygon. Partnerships with “family place names” helped Polygon “attach credibility,” he mentioned.
It became as soon as overall for Polygon to pair grants with their partnerships, a ragged employee mentioned, calling the note traditional during crypto. Wyatt mentioned the equal in an look on CoinDesk TV in December 2022.
“The general protocols are doing paid presents,” he mentioned on the time.
