Nubank officially launched Nucoin this month as part of a loyalty program defined as “revolutionary.”
The Brazilian neobank, backed by heavyweight investors such as Berkshire Hathaway, will make its brand-new cryptocurrency readily available to its clients through an airdrop. The term is known in crypto circles as an unsolicited and usually free token distribution to multiple wallet addresses.
First announced in late 2022, Nucoin is a free-of-charge crypto that rewards users’ participation in the platform. The overarching goal is to create a token-based loyalty program expected to drive engagement among its 70 million clients.
The decision is part of a broader trend among large tech corporations to boost engagement. Last year, Latin America’s e-commerce giant and fintech rival Mercado Libre also announced its own cryptocurrency.
To create Nucoin, Nubank joined forces with Polygon Labs. When the launch was first announced, the crypto company said the neobank was entering a “long list of global companies like Robinhood, Starbucks, and Stripe that choose Polygon as their entry point to Web3.”
How Nucoin works
In a press release, Nubank executives defined Nucoin as a “revolution” in the field of loyalty services. Customers can hold to their Nucoins (known as “freeze”) to level up and unlock further benefits. These include coin-back rewards and lottery tickets, the company said. The other option would be to sell those Nucoins to other customers in exchange for cash.
Over time, the number of benefits to customers who freeze Nucoins is expected to grow. External companies, Nubank said, will also join the network with their benefits.
“We expect to see many further developments as Nucoin is out there in the market and blockchain technology expands its reach,” said Fernando Czapski, General Manager for Nucoin at Nubank.
Looking to become the user’s first choice
The decision from Nubank comes as the neobank is striving to become Brazilians’ primary bank.
“Today, 44% of the adult population in Brazil is a customer, and importantly, 58% of our active consumers have chosen Nu as their primary banking relationship,” David Velez, co-founder, and CEO, said in the latest filing.
During the fourth quarter of 2022, Nubank increased crossover sales among its clients, mainly by gravitating toward the fintech’s core products.
The digital lender’s adjusted net income surged to $113.8 million in the fourth quarter from $3.4 million in the year-ago period, and 79.2% compared to $63.5 million in the linked quarter.
The fintech had already reached breakeven in the previous quarters and is now undertaking the challenging task of increasing profits while upholding its Latin American growth expansion.