Loyalty programs have evolved dramatically since the late 18th century’s copper tokens. Today’s systems no longer require physical stamp cards; instead, they operate seamlessly through mobile applications and digital frameworks.

However, the ease of creating loyalty programs via simple apps has also introduced unwanted complexities and fragmentation for customers. Points accrued can differ significantly across various travel segments.

Picture a comprehensive vacation where you accrue points from the flight, car rental, hotel, and dining experiences. Each of these belongs to different loyalty schemes, none of which are interchangeable. This results in fragmented point collections, with customers often ending up with numerous points they may never redeem.

Imagine a universal ecosystem enabling customers to exchange and utilize loyalty points amassed from travel, shopping, entertainment, and leisure activities. This is the vision behind Milk Alliance Inc., a blockchain-based loyalty integration platform that connects various services in the lifestyle, travel, and leisure sectors. With over 1.5 million users, MiL.k — the ecosystem’s user-friendly mobile app — bridges Web3 and Web2 service providers.

Loyalty Programs Unified through Tokenization

Blockchain ensures the security and integrity of loyalty program transactions by creating an immutable and transparent ledger of customer interactions, explains Aria-Jinwook Oh, CEO of Milk Alliance Inc., in an interview with Cointelegraph. Businesses offering loyalty programs can leverage blockchain to prevent fraud, counterfeit rewards, and unauthorized access to loyalty data, thereby fostering customer trust.

Aria highlights three transformative ways blockchain can revolutionize the loyalty space: Tokenizing loyalty points through a secure and reliable technology facilitates easy transfer between different services or users without requiring post-settlements among service companies.

“This is one of the principal reasons MiL.k leverages blockchain, and by transferring MLK to top crypto exchanges, users can cash it out,” Aria states.

Blockchain as a global infrastructure allows companies to expand into new markets. Additionally, data credibility is a critical aspect: “Utilizing blockchain’s reliability and credibility, sharing mileage point information — a significant financial element — can be managed securely.”

Milk Alliance Inc. exemplifies a practical real-world application using the three points Aria mentioned to onboard more brands into Web3. The company has collaborated with top conglomerates and key players in various industries, including AirAsia — a global airline with 600 million customers, loyalty integration platforms like OK Cashbag and L.Point, South Korean convenience store chain CU, and the Korea-based online travel agency Yanolja.

Blockchain-Based Loyalty: Operational Mechanics

MiL.k holds a patent for its unique algorithm that manages discounts based on the supply and demand of points. The platform’s algorithm determines the rate based on the current inventory of each point type.

When more users exchange AirAsia points for MLK within a given period, the AirAsia inventory increases, and the discount rate of AirAsia points rises, leading to higher demand for these points. This model helps MiL.k maintain a stable inventory of reward points.

“This circulating point exchange system eliminates the need for service companies to handle cash settlements, a common practice in point exchange programs,” Aria adds.

With MiL.k’s business model, the inventory of reward points keeps circulating, meaning no newly credited reward points are required. “Thus, there is no cash settlement necessary between MiL.k and the service company,” she emphasizes. “The point exchange mechanism on the MiL.k app allows users to exchange reward points for Milk Coin.”

Global Expansion

Transitioning from the fashion runways of New York City to the forefront of blockchain technology, Aria Oh now spearheads the global expansion of Milk Alliance Inc. After establishing a strong presence in South Korea, MiL.k is now extending its reach globally. In 2023, Aria attended major blockchain events as a keynote speaker, including the European Blockchain Convention in Barcelona and Gitex Global in Dubai. Her efforts have initiated a global partnership with The Sandbox.

Growing Ecosystem

Recognizing the potential of gamifying loyalty programs in the metaverse, MiL.k has partnered with The Sandbox, a prominent metaverse platform valued at over $1 billion. Through this collaboration, Milk Alliance Inc. has helped onboard a major convenience store chain with over 17,500 stores into The Sandbox metaverse.

“Integrating a brick-and-mortar retail chain into the metaverse is significant, and The Sandbox plans to showcase this,” Aria notes, adding that CU’s onboarding demonstrates how The Sandbox can integrate Web2 and traditional businesses, allowing them to reach new global audiences and reward their communities or customers through Web3 technology.

As global businesses continue to leverage loyalty point schemes to enhance customer loyalty and drive growth, Milk Alliance Inc. seeks to establish active partnerships with hotels, airlines, and online travel agencies worldwide. Aria believes that MiL.k will serve as a real use case for blockchain, maximizing utility and service marketing for the burgeoning Web3 market. “Expect more exciting partnerships that will design an ‘earn-and-burn’ loyalty program in a more engaging and entertaining way.”