FIN385: To retain customers, many companies implement customer loyalty programmes: Blockchain Technology and Smart Contract for Finance Assignment, SUSS, Singapore

Question 1

To retain customers, many companies implement customer loyalty programmes. A customer loyalty programme is one of the most effective tactics for increasing sales revenue and encouraging customer loyalty. The main reason is that it costs lesser to sell to repeat customers than to acquire new ones.

(a) Examine, in detail, four (4) key benefits to the company in implementing a blockchain-based customer loyalty programme as compared to the traditional one.

(b) You are preparing a report on blockchain and smart contracts for financial asset fraction application with security tokens. Show, in your report, how blockchain, security tokens and smart contracts can be used to improve workflows in financial asset fraction applications. Include in your report the following:

(i) Define financial asset fraction alisation and security token in a blockchain
technology.

(ii) List and illustrate two (2) examples of financial asset fraction application.

(iii) Examine the regulation on security tokens in Singapore.

(iv) Illustrate the lifecycle of a smart contract from creation to destruction.

(v) Examine four (4) reasons that a hedge fund company can leverage financial
asset fractionalization, blockchain, smart contracts and security tokens to
improve its business model.

(vi) Discuss two (2) key risks associated with the smart contracts; back your claims with examples.

Question 2

To capture a bigger market share of the tech-savvy millennials, an eCommerce platform is going to implement its own utility tokens which permit its customers to carry out their transactions on their platform anonymously and swiftly. The eCommerce platform still accepts debit and credit card payments but for those customers who are willing to exchange cash for their utility tokens, the customers will be able to stretch their money further, with a multiplier of 1.1, which means SGD 1.00 = Utility token of 1.10.

To achieve this vision, the eCommerce platform will be conducting a public Initial Coin Offering (ICO) activity to raise capital for the project and using the very utility token as the “currency” to be circulated within the eCommerce platform. You are consulted to write the Initial Coin Offering (ICO) white paper for the eCommerce platform to impress investors. Your white paper should include an introduction, vision and mission, and illustrate the following in more detail:

(a) Create a smart contract code implementation that minimally transfers the utility token from one wallet to another, in Solidity language. You will be evaluated based on the correctness of your implementation, and your utilisation of the relevant capabilities of the Solidity language.

(b) Discuss the token economy design (you are given the freedom to name the utility token) and its design rationale.

(c) Describe the sales strategy (example: Crowd Sale) and other design considerations to ensure the sustainability of this implementation.