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Discussed in this edition of Sporting Crypto:
The Product 🎁
The Sports Roots 🏀
Loyalty as Infrastructure 🏗️
Why is this important for sports? ⚽
The Product 🎁
Rain issues stablecoin cards for banks, fintechs and platforms, and sits as a Visa and Mastercard principal member. They claim to have over 100 partners, using their infrastructure.
Why would you want a stablecoin-linked card, you ask?
Because offramping from stablecoins to local fiat currency is still tricky. Or, you might be a contractor in Paraguay who wants to keep their earnings and savings in dollar-denominated stablecoins. Or, because there is a killer rewards program that you can’t ignore.
Cards are also compliant by default. Meaning the flow of funds from crypto → real world spending, has fewer compliance pain points for everyone in the chain.
Now, Rain have launched ‘Rewards’.
It adds the ability to integrate a loyalty layer to any card program that Rain launches with a partner. Points, earn rules, and redemption live in the same system that handles spend and settlement, so there's no second ledger to reconcile and no extra vendor to wire in. As Rain point out: “it's expensive, and stitching it together often takes months” to pull all of this together, for most businesses.
The points themselves are minted onchain only after a transaction settles, which means a reversal doesn't leave a stranded liability floating in the books. The onchain points have a name of their own, too, landing in the cardholder's wallet as ‘raindrops’.
Rain partners controls the programme. From the name, to the earn rates and the redemption, whether that's a flat rate or extra points in chosen categories. Cardholders see the partner's brand throughout and redeem within the same app, either as a statement credit or against hotels and flights in a white-labelled travel portal.
More than 90% of US credit card spending sits on rewards cards, which means that if you have a card program and don't offer rewards, you’re not competitive.
Rain ran a private beta with Avalanche Card before opening Rewards to everyone. Over 30 days, cardholders enrolled in the programme spent about 25% more per day than those who weren't, measured against their own past spending.
That is quite the needle mover.
The Sports Roots 🏀
This loyalty push comes several months after Rain acquired Uptop, who themselves saw great success in sports.
Uptop came up through sport, building onchain loyalty programmes for the Cleveland Cavaliers (Cavs Rewards), the Detroit Pistons (Pistons Rewards) and LSU Athletics.
[Here’s a rundown for the unitiated of how the Cavs Reward program works, which recently won platinum in the 360loyalty awards]
Fans sign up with an email and create a ‘Cavs ID’.
Onboarding for Cavs Rewards
After clicking ‘Get Started,’ users are walked through what they need to do to accrue points.
Fans are told they need to link a card to earn points on purchases at Cavs Rewards locations, and they can also earn additional points by scanning receipts for eligible products such as Coca-Cola, Michelob Ultra, and more.
Fans are then shown how business owners in the local area can connect with the Cavs Rewards program.
Finally, it is outlined how those points can be redeemed and what the rewards could be.
After the onboarding process, users are then prompted to connect a debit or credit card.
This is done easily through the fintech company Plaid, and after linking a card, fans are directed to the home screen.
From there, fans can click on ‘Add Points’ (1), ‘Earn Points’ (2), ‘Rewards’ (3) or (4) ‘Join as a Business’.
(1) Add Points: Allows fans to purchase points with fiat currency.
(2) Earn Points: Shows fans the different ways in which they can earn points, such as referrals, purchases and challenges.
(3) Rewards: Showcases the types of rewards fans can redeem.
(4) Join as a Business: Rerouted to a landing page from Uptop with a form to be filled out by businesses.
The model was simple for the fan. Link an existing debit or credit card, earn points on everyday spend at groceries, restaurants and partner locations, then redeem for tickets, VIP experiences and merch.
And it links to the card you already have, meaning there’s no friction of having a new card issued.
The clever part was the open loop. A team's sponsors could plug directly into the same programme, so a fan earned points for spending with sponsor brands in normal life, not only inside the arena. That gave sponsors measurable metrics, which is key.
The Cavs Rewards numbers were impressive. Sponsors saw a 21% lift in spend from enrolled members, and Team Shop sales rose 51% since launch. Rain has now taken that engine and verticalised with card issuing.
Looking elsewhere, Club Brugge, one of Belgium’s biggest football teams, has an embedded debit card which launched last year. It’s similar to the Uptop model, but with a debit card. 5000 fans requested the card on launch. There was a 13.3% increase in-stadium commissions. A 9.2% increase in fans arriving at least 30 minutes earlier on matchdays.
Club Brugge made ~$180m in revenue last year. This isn’t a massive business. The loyalty program is localised and aimed at enriching the match-going fan experience. But even without the need for global penetration, Club Brugge could still create an even more competitive, hyperlocalised rewards program,
Loyalty as Infrastructure 🏗️
The verticalisation, now that Uptop is part of Rain, means a wallet is already in place by default, so the raindrops a cardholder earns have somewhere to live without anyone needing to download anything.
Points accrue automatically with spend, are minted onchain once the transaction settles, and sit alongside the cardholder's other balances.
The really interesting thing here, however, is the shared infrastructure that Rain have built, and what they plan down the line.
They want a shared liquidity layer, so raindrops across different programmes can interoperate, rather than trapping each program’s points in its own silo. A single programme's points don't do much alone. Pooled across an ecosystem, they start to behave like a currency. Historically, big brands and airlines pre-fund card programs for multiple years to make them extremely competitive. You can only do this by placing a big burden on your liabilities(aka, you need a lot of cash).
Smaller brands could do loyalty before technically. But not commercially. And with this shared liquidity layer, there is a compounding effect.
On a recent episode of the Tokenized podcast (my other child), Ross Basri, Co-Founder of Uptop said:
"We're going to have a centralised liquidity facility for all of those tokenised points between our programs to interoperate with each other. If you're a small business and you issue an on-chain point, you may or may not be able to do a whole. But if you're part of the Rain ecosystem, there's potentially a lot more you can do with it, so that's that's in a nutshell how we're thinking about this”
Simon Taylor, Co-Host of the Tokenized Podcast, followed this up with:
“You had big programs and big brands that were doing loyalty. Airlines would pre-fund this for multiple years, everybody would compete for that product, and it only made sense if you were massive. But the Cleveland Cavaliers and the Detroit Pistons, very different scale of business and very different scale and type of customer base, and so I think the type of hyper personalised loyalty, if you bring down that cost, is really interesting on top of all of the yield mechanics that can manifest as rewards in a way that that actually makes sense”
Teams and smaller businesses could not create highly competitive rewards programs. Maybe now, they can.
Why is this important for Sports? ⚽
In mid 2024, Forrester ran a report with two incredibly interesting stats
According to their Q4 B2C Marketing CMO Pulse Survey, 2024, 67% of respondents planned to either enter the sports space for the first time or increase their investment in sports sponsorships.
Yet, 76% of U.S. B2C marketing executives who invested in sports sponsorships in 2023 agreed that they struggle to calculate the ROI of their investment.
So there was and still is an appetite to get involved in sports, but the people spending the money don’t quite know how that shows up as a return to the business.
And sports need these brands to drive revenues.
Broadcast, which is 50-80% of most sports teams’ revenues, is flattening almost everywhere apart from the NFL or greenfield sports leagues.
And whilst the case for sports as an asset class is that they are AI-proof and scarce, there still needs to be a reasonable revenue-to-value ratio for the growth to continue.
There are moves like multi-use stadia to increase revenues for teams that own their stadiums. But digital, and growing monetisation from global fanbases, is most likely where these ‘brands’ can drive further growth. And sports could, funnily enough, be incredibly well placed to move in this direction. Here is some context, from previous pieces I’ve written:
Fans are the entire revenue base, yet clubs barely know them: “They are the biggest and only revenue driver. They pay the subscriptions that pay for broadcast deals. They buy merchandise and they pay for tickets.” (Watford FC Sell 10% Stake to Fans)
Sport's real edge is passion, no other category can match: “They have passionate fanbases in the millions who want to engage with their league or team, more so than a consumer does with their favourite supermarket, coffee shop or airline.” (Commercialisation in Web3 Sports)
Today that fandom is unmeasured and monetised through a broken funnel: “My fandom isn't measurable… we are a captive audience from our relationship with a team alone, and we are exploited, but in a very fragmented, quite broken way.” (LAFC Launches Loyalty Club)
Loyalty has shifted from nice-to-have to core revenue: “For many huge brands, loyalty has become fundamental to the business model, rather than auxiliary and a ‘nice to have’.” (Ode to Odyssey)
The durable model is platforms and loyalty, not one-off drops: “Platforms, loyalty programs and engagement… is where brands are placing their bets.” (Web3 Loyalty: Buzzword or Breakthrough?)
Direct-to-fan is compelling precisely because it's global and frictionless: “selling to your fans in a frictionless, small-overhead, global way without having to ship anything physical is a very attractive proposition for someone with rights to leverage.” (Athlete-Direct-to-Fan)
And the oldest version of the case, from 2022: own your IP or your revenue model is hostage to the next deal. “If you are reliant on licenses… you have to be prepared for your business model to implode should you not get recurring deals over the line.” (To License or Not to License?)
So if the growth in digital requires knowing your fans more intimately, and globally, there also needs to be a more coherent funnel to monetise those fans. And as with every big funnel, there is a lot of leakage. That is exacerbated by having fans globally who pay in different currencies and have wildly varied spending power. But a credit card, issued physically and virtually, with competitive earn components, could be the way that teams and leagues compete. And, earn more revenue by owning more of the payments stack.
Indeed, in the same episode of Tokenized, Simon went on to say:
“I think about a consumer brand like Manchester United or Liverpool that have massive presence in Asia Pacific and Africa, hundreds of millions of people who are fans of what they do, that they have no direct way to monetise today, but could have a stablecoin-linked card, but try and launch a card program in those markets would be really, really hard. Stablecoin cards? Little bit easier to do, not completely easy, but much more cost-compressed and affordable”
Right now, those teams can monetise global fans through merchandise (where revenues are split with manufacturers), IP licensing (where revenues are underwritten by the licensor, and static), memberships (that haven’t changed in model since the internet began) and pre-season tours (a once-per-season event that has a cap in monetisation).
Web3 Loyalty only caught on sometimes and didn’t have enough staying power. It wasn’t as sticky as we thought. But verticalised with payments where earn and rewards are competitive, could be a huge unlock.
Sports teams and leagues are constantly looking for their next growth vertical. And for brands that have a constant flow of new customers (family/college attendance) and a massive global footprint, it’s time to move beyond primitive business models and own more of the value flow.
More Sports & Web3 Stories
General 'Stuff' that Could Impact You
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