MuDAO creates the Mu tokens. The number of tokens could be limited or fixed, or supply may be left flexible, in order to accommodate future demand or respond to exogenous shocks. For the purpose of this article, we will assume the supply is limited. Let us take the number of total tokens to be 300 billion. How do these tokens come into circulation?
The first 100 billion can be given to entities who help with enabling Loyalty 2.0 for brands. These could be ESPs (email service providers) or martech platforms. An ESP could embed the tokens it receives (or buys) in brand messages sent through its platform. A martech platform could do the same for push notifications. To take some real numbers: an ESP sending 10 billion messages a month could offer Mu tokens as rewards for opens and clicks on behalf of the brands. Assuming 2 billion such actions in a month, the ESP would enable the circulation of 25 billion Mu tokens in a year spread over hundreds of millions of individuals.
Another 100 billion Mu tokens could be auctioned over a 3-year period: 100 million a day for 1000 days. Brands could then buy them via the exchange, thus setting an initial price for the token. Brands could now reward their customers for additional actions: in-mail engagement, zero-party data, and so on.
The final 100 billion Mu tokens could be split two ways: 50 billion for the developers and miners who will underpin the Mu tech, and another 50 billion for treasury operations to ensure market liquidity.
The entire 300 billion should be in circulation in the next few years. Individuals would have a Mu wallet which could also serve as identity for their brand engagements. The wallet could also house NFTs that brands could periodically offer for free or sell. In the steady state, brands would buy Mu from the exchange (sellers could be individuals or even other brands) and then use them as incentives for strengthening their customer relationships.
The big question: where will brands find the money for this? Would this not lead to an additional outflow leading to a further hit on profitability? My answer is: No. It would be the opposite. Today, brands spend 90% of their marketing budgets on new customer acquisition, and half of that money is wasted. If they can use some of that “adwaste” money for their existing customers, it will lead to more attention, higher retention and, hopefully, increased transactions. As I keep saying: To get customers to pay attention, pay them for their attention (else you will pay Google and Facebook 100X more for them). The twin combo of higher revenues and lower marketing spends will improve profitability.
By disintermediating the adtech platforms, brands will find rich rewards themselves – delighted customers. The added dimension of gamification that the Mu tokens bring can make it attractive and exciting for customers. Metrics like Hooked Score and Earned Growth Rate can be good complements to Net Promoter Score in measuring customer loyalty – redefined to go beyond transactions but also include attention, sharing of customer data, referrals and many other actions that marketers decide.