Polygon Labs paid USD 4 million to launch Starbucks Odyssey, a loyalty program using NFTs, but the project failed and became an example of Polygon's business development strategy.

•Polygon Labs paid USD 4 million (approximately USD 600 million, equivalent to USD 150) to implement Starbucks Odyssey, a loyalty program using NFTs, which was touted as a pioneering example of business development using crypto assets.
•The deal is a clear example of the 'big and flashy' business development strategy that Polygon has abandoned, according to sources familiar with the matter.

Companies typically pay technology vendors for services provided; the opposite occurred when Starbucks entered crypto assets with a soon-to-be-closed initiative deployed on the Polygon network.

The payments have killed at least three proposed blockchain ecosystems that Starbucks had hoped to partner with, a third person said.

The revealed deal adds context to the origins story of crypto assets' spectacular (and later disastrous) arrival in US consumer culture Last week, Starbucks announced that it was shutting down its 18-month-old Odyssey.

The figures also illustrate the costs of developing a business with crypto assets: in 2022, Polygon Labs is looking for partnerships with well-known companies such as Nike and Starbucks that will raise Polygon's profile; If big brands use Polygon as a starting point to get into crypto assets, then a ton of customers will follow suit.

But apparently not.

“Large, flashy transactions like this are a remnant of the past, the strategy of previous leaders,” said a person familiar with Polygon Labs' current thinking, who said the company, a leading developer of the Polygon blockchain, is now more focused on building innovative technology than partnerships .

Origins of the Odyssey

The deal with Polygon may not just be about money: it appears Starbucks is genuinely interested in finding a Web3 partner to launch Odyssey, and the search for a partner is being led by Forum3, a marketing consulting firm led by Adam Brotman, who previously served as Starbucks' Chief Digital Officer.

Blottman spoke with Polygon and Solana in early 2022, according to two people familiar with the matter at the time, while longtime bitcoin advocate Samson Mow told CoinDesk he was lobbying Starbucks to choose Liquid Network, bitcoin's layer 2.

Forum 3 chose Polygon's technology, a former Polygon staff member said, but the agreement includes not only a grant but also extensive technical and marketing support to help Forum 3 launch a Starbucks loyalty program, the person said.

NFT values were under pressure even before Starbucks announced it would close Odyssey on March 15: the floor price (minimum bid) for Siren NFTs sold before Odyssey's closure announcement on March 15 was $215. On March 19, buyers offered up to $86 and sellers wants at least $165.Representatives of Forum 3, which previously described itself as a Web 3 company but has since shifted its focus to AI (artificial intelligence), according to its website, did not respond to requests for comment.

End of the Odyssey

Starbucks Odyssey ran for 18 months as an invite-only 'beta' program and managed to develop a dedicated following: along with a dynamic discord server, the program created a cult following trading NFTs, and supporters boosted the program on social media and even created a tips site for develop strategies to earn points.The community was shocked last week when Starbucks abruptly announced the end of Odyssey, with members exchanging messages of sadness, anger and poignant memories, according to screenshots of messages confirmed by CoinDesk.

Bryan Kayne, a crypto asset consultant and member of Odyssey, told CoinDesk: "As someone who has spent a lot of time and money, I'm certainly a little upset, but overall I understand the policy changes of big companies and I'm glad Starbucks has tested the concept.A Starbucks representative said in an email to CoinDesk that “we look forward to applying what we have learned to the future of this program,” but did not elaborate on its future or whether it would continue its efforts with Web3.

"We value our relationship with Polygon and Polygon's contribution to Starbucks Odyssey," the representative continued, but did not mention the amount of money spent on the business partnership with Polygon.

"We're in a really good position where people are looking for positive stories, so a lot of our initiatives are having a big impact," he said in an interview with crypto asset investment firm Variant in September 2023, a few months after he left Polygon in partnership with The 'well-known brands' helped Polygon 'build credibility', he said.

"All protocols are paid for and handled.