Japan’s most widely used messaging app with a massive 200 Million active users, has revealed that it will be creating its own cryptotoken, LINK.
Line CEO Takeshi Idezawa explains the companies reasoning behind the decision;
“The accelerated development of the crypto economy and blockchain technologies has created a wide range of options for new types of businesses. To keep up with these trends, Line has decided to launch our own cryptocurrency and blockchain network. Line intends to be a pioneer in the blockchain/crypto field, using our status as a global mobile platform and a listed company to take the initiative with the first cryptocurrency.”
Unlike most blockchain loyalty plays, instead of conducting an ICO to raise funds, Line are going to airdrop LINK to current customers as compensation for using their Line services, products or completing specific requests. The Line team also revealed that it will release DApps and services related to content, commerce, social, gaming and exchange. All of which will be powered by LINK as the main payment method.
In his book, Blockchain Loyalty; disrupting loyalty and reinventing marketing using cryptocurrencies, Philip Shelper examines the airdrop method as a way to distribute newly created cryptotokens as an alternative to holding an ICO. This approach suits more established companies who already have the infrastructure, funds and customer base in place so the need to raise capital is low – the benefit for Line in being in a position like this is, it enables the company to have much better control over the token supply, as the company only needs to release enough tokens into the community to stimulate trading behaviour.
Line intends to distribute 800 million LINK tokens over time while keeping 200 million LINK for itself in reserve, which will cap LINK’s circulating volume at a maximum of one billion tokens.
This begs the question, what will the LINK tokens actually be used for? – Line intends to allow LINK token holders to purchase stickers, ‘webtoons,’ and other services within the Line messaging application, in a move to evidently create a loyalty program. If the LINK venture succeeds, Line intends to eventually use the blockchain behind the LINK token to host decentralized applications (DApps) that will directly connect with the firm’s messaging app.
Overall, I think it’s a very smart move by Line to avoid holding an ICO. Forgoing the opportunity to raise funds (although raising funds is getting much much harder in the current environment) is a tough decision, but one that will give LINK the best chance possible in generating a steady demand and ensuring price protection.
I am personally excited to see that there are still big firms out there interested and attracted to blockchain loyalty solutions. I am confident blockchain has a role to play in loyalty programs around the world and am delighted Line have taken the initiative here. Best of luck to them.
Stacey Lyons is the Marketing Director at Loyalty & Reward Co, a leading loyalty management consulting agency based in Sydney. Stacey has years of experience within loyalty, marketing and eCommerce across multiple channels and business models. Most recently, Stacey has been managing the investor, member and retailer communications for blockchain loyalty company EZToken Rewards.