There is a legal saying that “bad facts make bad laws.” Right now, cryptocurrencies need better data. If cryptocurrencies are to resonate with policymakers, we must downplay the facts and narratives that threaten governments (down with fiat!) and the wealthy (down with banks!).

Instead, cryptocurrencies should emphasize meat-and-potatoes stories that are simple, valuable, and consumer-friendly. This is a technology that is supposed to benefit everyone, that strengthens communities without dismantling individual rights. Oddly enough, one of the clearest examples of this is Web3 loyalty programs.

Josh Rosenblatt is General Counsel, COO, and Co-Founder of Co:Create. This article is part of CoinDesk Politics week.

Web3 loyalty programs have numerous advantages over traditional loyalty programs, but three will resonate most with policymakers: ownership, control, and interoperability. With a Web3-based loyalty program, users have actual ownership of their points, tier status, and brand-related collectibles, all of which come in various forms of “loyalty tokens.” Users also have the ability to transfer, market or sell their property, as the brands see fit.

Because companies can make their loyalty tokens subject to transfer restrictions, they have granular control over how their loyalty programs work and who can participate. Brands can choose which wallets can receive tokens based on set requirements. This goes further to show that Web3 loyalty tokens are not securities, because they cannot necessarily be traded for profit. Instead, they are a consumable good.

Another benefit of Web3 loyalty programs is that brands can choose to make their loyalty programs interoperable. This means that any brand that wants to participate in a particular program can earn or redeem loyalty tokens.

See also: The loyalty revolution / Opinion

Examples of this interoperability exist today, but are limited by Web2 technology that requires collaborations to be manual, slow, and two-way (meaning Brand A must negotiate an agreement with Brand B and seek timely systems integration). and expensive to be able to collaborate).

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Web3’s loyalty programs make these collaborations partially or totally permissionless, depending on brand preferences. Any participating brand may partner with any other participating brand. Brands with similar audiences and non-competing products could cross-promote and leverage each other’s brand equity, with little or no pre-planned coordination. For example, a restaurant could offer gold tier members of a product a discount for a limited time, simply by providing the user with the NFT that represents their gold tier membership.

If Web3’s loyalty programs are successful, they will generate positive results for the entire crypto industry by onboarding new users in a familiar context.

First, they provide a low-risk introduction to crypto assets and blockchain technology through shared incentives. There’s no faster way to get everyday users comfortable with wallets than to provide real-life benefits (i.e. discounts at your favorite stores). Web3 loyalty programs make it easier for people to understand and adopt technology by putting wallets in people’s hands and encouraging them to use blockchain-based tools in a familiar context with clear benefits.

Second, Web3’s loyalty programs show the value of blockchain technology in a real world context. These programs are not trying to revolutionize the world, but are taking established programs and improving them with the added benefits that are only possible through the use of blockchain technology.

See also: On-Chain Branding: Why Marketers Are Shifting Investment to Web3 / Opinion

The entire industry will benefit if regulators and the public can think of crypto through the lens of Web3 loyalty programs, as the regulatory frameworks already exist. Loyalty programs operate within well-established laws and regulations: consumer protection and privacy standards are among them. There are fewer open questions and less need for new legislation to regulate Web3 loyalty programs.

Web3 loyalty programs are “non-threatening”. Unlike other cryptocurrency use cases, such as decentralized finance (DeFi), Web3 loyalty programs do not threaten the power of the state or traditional financial systems. It is very difficult to financially harm consumers with a loyalty program. This makes them more politically acceptable and easier to regulate.

See also: Birth of the Network of Nations

Web3’s loyalty programs are also business friendly. They provide companies with a valuable tool to compete, collaborate, and attract customers. It becomes much more difficult for policymakers to regulate tools that are commonly understood to be “good for business.”

If the Web3 loyalty program narrative is widely adopted, everyday users will feel ownership and loyalty to Web3 technology. As users become aware of their ownership and control over their loyalty programs, they will become more supportive of crypto policies that benefit the entire industry.