Why Web3

Service tokens are Ethereum based semi-fungible tokens (SFT) that are asset-backed and redeemable for service. They are minted from service smart contracts creators deploy on the Polygon blockchain. Like traditional gift cards/certificates, which are backed by money paid to acquire the certificate, service tokens are backed by monetary assets, paid in a primary-sale, to purchase the token. This value is held in the smart contract. As the token holder redeems credit in the token, the underlying asset is drawn from the smart contract and deposited to the creator’s revenue account. Credits issued via smart contracts that run on decentralized public blockchain infrastructure offer two distinct advantages to traditional methods.

Programmability

First, smart-contract programmability enables us to issue credits for a wide range of use cases including but not limited to implementing reservations for one-one meetings, issuing free trial access, paying for items or memberships, and managing waitlists. Another important feature of service tokens is that they are engineered to support network credit, enabling groups of creators or services to issue a common credit that is transferable across their users and service offerings. and even implement revenue sharing arrangements for splitting proceeds from redemption. These network contracts enable creators to bundle their offerings, or data, into a single service issued through their network token offering. Ordering dinner online involves collaboration with at least three providers: the food marketplace, the restaurant, and the delivery service. Independent creators often collaborate to provide a common service: Creators collaborate as well: any Youtube viewer has watched videos where multiple creators bring their expertise (and audience) to bear on a topic. But Web2 platforms accrue revenue on such shared projects to a single bank account, requiring an associated legal agreement for splitting the proceeds. Such network tokens offer more value to users and potentially more liquidity in secondary markets.

Secondary markets

Compared to content or physical products, which an individual may consume only once, credits, because of embedded value that can be redeemed for future offerings, offer higher potential for secondary market transactions. By default, Ethereum tokens can be transferred peer-to-peer, or sold on various exchanges; therefore holders have the option to resell their unused credits. So a customer may expand effort to attract a customer for a primary sale, in the event a customer drops from the service, a creator can acquire a new customer via token resell.

One limitation of traditional merchant credit vouchers issued via gift cards is that Americans hold over $23 billion in unused gift cards - with 47% of Americans holding at least one unused gift card. This represents a significant amount of value locked out of circulation in the economy.