Starbucks suddenly halts the Odyssey program: its NFTs have severely plummeted in value, and Polygon previously sponsored $4 million

Written by: Nancy, PANews

As the NFT market hits rock bottom, Starbucks has announced the imminent termination of its Odyssey NFT program, which has been running for less than two years. Meanwhile, it has been revealed that Polygon Labs paid Starbucks $4 million to fund this loyalty reward program, thereby outpacing other competitors to become Starbucks' partner. The sudden end of the NFT program by Starbucks may be related to various factors, including low user engagement and the sluggish NFT market.

New Membership Experience to Launch, Most Odyssey NFTs Severely Underperforming

Last week, Starbucks announced that it would terminate its Odyssey NFT program, which is still in the testing phase, on March 31, and will soon close its Discord community. After the closure of the Odyssey NFT program, users will still be able to trade on Nifty Gateway.

Although Starbucks has not provided a specific explanation for the closure of Odyssey, Steve Kaczynski, the head of the Odyssey community, seemed to hint at the reasons for the program's shutdown in an interview with TechCrunch, stating, "The NFT space may have significantly declined from historical highs, with the Odyssey NFT program only attracting over 58,000 active users, most of whom are not Web3 natives."

Launched in the second half of 2022, Starbucks Odyssey aimed to enhance customer experience by integrating the company's loyalty reward program with NFTs, and it has released several themed NFTs, many of which sold out quickly after launch. However, as the NFT market entered a bear phase, a widespread severe underperformance was observed among the 27 Odyssey NFTs, with monthly transaction volumes only reaching hundreds to thousands of dollars.

Data from Nifty Gateway shows that as of March 21, for example, the floor price of "The First Store Collection Stamp" has dropped over 82% from its issuance price of $100, "The Starbucks® Green Apron Stamp" has seen a decline of 86%, "First Store Collection" has dropped by 82%, "Holiday Cheer Stamp" has decreased by over 72.6% from its historical average price, and "Going Places Journey Stamp" has fallen over 98% from its issuance price. However, some series of NFTs have not yet underperformed, such as "The Siren Collection Stamp," which has increased by 30% from its issuance price.

Nevertheless, Starbucks also revealed that it will launch a new membership experience in April. Meanwhile, Steve Kaczynski stated that Starbucks is seeking new ways to explore the value of its brand and loyalty program and will expand the reward program in 2024.

Polygon Labs Provided $4 Million Sponsorship and Investment Intermediary

Polygon Labs significantly increased its visibility through its partnership with Starbucks. Regarding the reasons for the collaboration, Starbucks has publicly stated that it primarily depends on Polygon's advantages such as low transaction fees and scalability.

It is reported that the partnership between Polygon and Starbucks was facilitated by the digital collectibles company Forum3, whose co-founder Adam Brotman is a former Chief Digital Officer of Starbucks and later became a special advisor for Odyssey. According to CoinDesk, sources revealed that Adam Brotman had discussions with Polygon, Solana, and others in early 2022, ultimately choosing Polygon for technical reasons.

However, unlike most companies that pay service fees to technology firms, Polygon Labs was required to pay Starbucks $4 million to cover part of the costs of establishing Starbucks Odyssey, which also helped Polygon win the partnership amid competition with three other blockchains. The market speculates that if large brands like Starbucks choose Polygon as their launch platform for entering the crypto space, it may attract more customer groups to follow suit.

It is worth mentioning that Polygon Ventures also participated in the $10 million seed round financing announced by Forum3 in 2022. Currently, Forum3's official website shows that this company, which once focused on brand digital collectibles, has now shifted to the artificial intelligence sector.

Additionally, a source familiar with Polygon Labs stated that the significant partnerships established by Polygon Labs with companies like Nike and Starbucks are remnants of past leadership strategies. It is reported that former Polygon Labs President Ryan Wyatt led the collaboration with Starbucks, but he left after the restructuring of Polygon Labs' leadership in 2023. As members involved in these collaborations depart and Polygon shifts its focus to the ZK track, future priorities may be more centered on technology rather than brand marketing.

The exit of large traditional platforms like Starbucks from the NFT space is not an isolated case; in the past, companies like GameStop, Meta, and eBay have also closed or downsized teams due to the uncertain prospects of NFT development and regulatory factors. This indicates that for NFTs to achieve lasting success in a broader market, they still face significant challenges.