The market for tokenized loyalty.

A market needs two people who value the same thing differently.

Loyalty programs already create this situation constantly.

Imagine two customers.

Anna has 5,000 points with a retailer. They expire next month. She doesn't expect to shop there again.

For Anna, those points may soon be worth nothing.

Mark has 15,000 points with the same retailer. At 20,000 points he can redeem a reward he actually wants.

To Mark, another 5,000 points have real value.

The loyalty program has created value.

But today there is usually no market connecting Anna and Mark.

Tokenization can create one.

A loyalty point doesn't have one value

We often talk about a point as though it has a fixed price.

It doesn't.

A program might imply a redemption value—perhaps 10,000 points can be exchanged for a product that normally costs €100—but that doesn't mean every holder values 10,000 points at €100.

The value depends on what the customer can actually do with them.

A customer with too few points to reach a useful reward may value them less.

A customer who no longer uses the brand may value them less.

Points approaching expiry may be worth substantially less to their holder.

Meanwhile, another customer who is close to a redemption threshold may value additional points much more highly.

This creates the basic condition for trade:

the seller values the points less than the buyer does.

Traditional loyalty systems generally leave that difference unresolved.

A market can turn it into a transaction.

The seller

The natural seller is not necessarily someone abandoning the loyalty program.

It can simply be someone for whom a particular balance has low utility.

They may have points they cannot use before expiry.

They may have earned points while traveling but rarely use that airline.

They may have accumulated a small balance with a retailer and have no intention of earning enough for the next reward.

Or they may simply prefer cash—or value in another loyalty program—to the reward currently available.

Without transferability, their choices are limited.

Use the points.

Keep them.

Or lose them.

A market adds another option:

sell them to somebody who values them more.

If 5,000 points will expire worthless next week, selling them for €20 can be rational even if their theoretical redemption value is €50.

The seller is not getting "less than the points are worth."

For that seller, €20 may be more than the points are worth.

The buyer

Now consider the other side.

Why buy somebody else's loyalty points?

Because their value can be highly contextual.

Suppose a customer already has 15,000 points and needs 20,000 to redeem something worth €100.

Earning the final 5,000 might require another €500 of spending.

Buying those 5,000 points for €30 could be much more attractive.

The buyer gets access to a reward sooner.

The seller recovers value they might otherwise lose.

And the brand gets a customer actively trying to redeem within its ecosystem.

This last part is important.

The economic activity isn't occurring around an arbitrary token.

The ultimate source of demand is still the issuer.

People want the points because the issuer accepts them for something customers value.

Where does the price come from?

Tokenization doesn't give loyalty points a price.

A market discovers one.

And unlike many purely speculative assets, loyalty points have an unusual reference point: redemption utility.

Suppose 10,000 points can be redeemed for a product a customer would otherwise happily pay €100 for.

That customer is unlikely to pay more than €100 to acquire those 10,000 points.

At the same time, a holder facing expiry might accept considerably less.

Somewhere between those two valuations, a trade can happen.

Different rewards can even make the same point worth different amounts to different buyers.

One customer may have little use for 10,000 points.

Another may need exactly 10,000 to complete a high-value redemption.

Markets exist precisely because those preferences differ.

Loyalty already has buyers

The idea that third parties might pay for loyalty currency isn't hypothetical.

It is already fundamental to some of the world's largest loyalty businesses.

Delta sells miles to participating companies, most importantly American Express. Delta reported $8.0 billion in cash sales from loyalty-related marketing agreements in 2025. Members then receive those miles through card spending and other activity.

American Airlines similarly describes loyalty miles being issued through travel and sold to co-branded credit-card and other partners. At June 30, 2026, its reported loyalty-program liability stood at approximately $11.6 billion.

This is not the same thing as a customer-to-customer secondary market.

But it demonstrates an important principle:

loyalty currency can already have buyers other than the consumer who originally earned it.

Today those markets are mostly institutionally arranged.

Tokenization makes it possible to explore the other side of the system: customers exchanging loyalty value directly.

And loyalty already crosses program boundaries

Points are also beginning to move between loyalty ecosystems.

Marriott Bonvoy members can convert Marriott points into Starbucks Rewards Stars. The programs require linked accounts, impose conversion rules and limits, and transfers may take around two business days. Marriott and MGM Rewards separately support transfers between their programs at a defined conversion ratio.

These partnerships show that customers want loyalty value to be useful outside the program where it originated.

But each connection is built separately:

Marriott ↔ Starbucks.

Marriott ↔ MGM.

Another partnership requires another integration.

A tokenized loyalty market creates a different architecture.

Programs expose standardized assets.

Markets and applications decide how to connect them.

What happens to breakage?

This is where the economics become more interesting.

Loyalty programs already account for the fact that some points will never be redeemed.

Delta explicitly incorporates estimated mileage breakage into its accounting for loyalty obligations. Marriott likewise estimates the portion of points that members will never redeem when measuring loyalty-program revenue and liabilities.

Allowing customers to sell points could reduce some forms of breakage.

A customer who would have allowed points to expire may instead sell them.

But that does not mean expiry disappears.

A tokenized loyalty program can preserve the original expiration conditions. A point expiring on September 30 still expires on September 30 regardless of who holds it.

That means expiry can actually create a distinctive market.

As the deadline approaches, a holder who cannot use the points has increasing incentive to sell.

A buyer who can immediately redeem them has increasing leverage to buy at a discount.

The market becomes a mechanism for reallocating points from customers with low redemption probability to customers with high redemption probability.

For the issuer, that changes the economics.

More points may ultimately be redeemed.

But the issuer may also gain a transaction fee or royalty, a more engaged existing customer, or an entirely new customer who bought points specifically to spend with the brand.

The relevant question therefore isn't:

"Does tokenization eliminate breakage?"

It is:

"Is an expired point always more valuable to the brand than a traded point that produces another customer interaction?"

We don't think the answer is obviously yes.

A secondary market can become customer acquisition

Consider Anna and Mark again.

Anna sells her 5,000 points.

But imagine Mark isn't already a customer.

He sees that €100 of goods from a particular retailer can currently be obtained using points available on the market for €75.

He buys them.

He creates an account with the retailer and redeems them.

The seller recovers value.

The buyer discovers the brand.

The brand fulfills the reward and gains a new customer.

The trade has effectively turned loyalty inventory from one customer's unused balance into another customer's acquisition channel.

This is very different from the traditional view of loyalty points as something that should remain permanently attached to the person who earned them.

Once transferable, loyalty can circulate toward the people who currently value the underlying product the most.

Markets also make exchange possible

The same structure can connect different programs.

Suppose a customer has grocery points but wants airline points.

Another customer has airline points but wants grocery points.

They don't necessarily need the two companies to negotiate a direct conversion agreement.

A market can provide the exchange layer between them.

It doesn't even need to look like a crypto exchange.

The customer experience could simply be:

Exchange 10,000 Grocery Points → 1,200 Airline Points.

Underneath, liquidity can determine the available rate.

That is fundamentally different from a centrally negotiated conversion ratio.

Instead of every program determining every possible relationship with every other program, the market discovers relative value.

The issuer still controls issuance and redemption

An open market does not mean the issuer gives up control of its loyalty program.

The brand still determines:

• when points are issued;
• what activity earns them;
• their expiry;
• what they can be redeemed for;
• whether a balance is eligible for tokenization;
• and the conditions under which tokenized points return to the program.

Loyfin sits between the existing loyalty system and the programmable layer.

When points are tokenized, the corresponding value leaves the customer's traditional loyalty balance.

When they are redeemed back into the program, the tokenized representation is removed.

There is still one underlying loyalty obligation.

It can simply move.

The market isn't the outstanding balance

This distinction matters.

American Airlines reporting $11.6 billion of loyalty liabilities does not mean there is an $11.6 billion secondary market waiting to appear.

Marriott reporting almost $8 billion doesn't mean all of those points would ever be tokenized or traded.

Most points may never need a market.

Customers will continue earning and redeeming them normally.

The relevant market is the fraction for which another holder has greater utility than the current holder.

We don't know how large that fraction is yet.

And that's precisely why the market itself is useful.

Prices, volumes, time-to-expiry, repeat purchases and redemption after transfer can reveal something loyalty programs historically have had difficulty observing:

what customers actually value their points at when given the choice to keep them or sell them.

From loyalty balance to loyalty economy

Today, most loyalty programs are closed loops.

The company issues points.

The customer earns them.

The company redeems them.

Tokenization adds another participant:

the market.

Now value can move from someone who doesn't need it to someone who does.

Points close to expiry can find buyers.

Customers can acquire the final balance they need for a reward.

Programs can become exchangeable.

Brands can potentially earn from transactions and acquire customers through the circulation of their loyalty value.

The points haven't changed.

What changed is what people are allowed to do with them.

That is the market for tokenized loyalty.