Bank for your buck

Two types of runs.

14 Mar

Duncan Cooper on Starbucks' new siren NFTs, and Terry Nguyen on the Silicon Valley Bank meltdown.

COFFEE RUN

The other day I went on a Starbucks run of sorts. As one of the few-thousand early beta-testers of Starbucks Odyssey, the coffee chain's Web3 loyalty rewards program, I had the opportunity to mint a free “Journey Stamp,” a collectible Starbucks-branded NFT. All I had to do was take an online quiz, purchase a one-pound bag of Pike Place Roast, and virtually trace the beans’ origin story on a website. It was a quick and easy task for a free NFT. Someday, I might be able to use the Journey Stamp as a coupon or as an access pass to unlock some special benefits or perks. I could also sell it to one of those tumbler-collecting Starbucks fans, the so-called “completionists” who want to collect everything by the company.

In a call with investors last fall, CEO Howard Schultz said that purchases through the company’s existing rewards program account for over half of its US revenue. By preloading money into cards and the Starbucks app, customers are effectively loaning the coffee chain billions of dollars, interest-free. But credit card processors are still getting a not-so-insignificant chunk of these sales. It’s a hypothetical proposal, but if Starbucks were to switch its loyalty card system to some low-fee, USDC-friendly blockchain (like Coinbase’s newly announced Base), the company wouldn’t lose any processing fees to banks. This could translate to millions more in earnings.

On March 9, Starbucks released its first paid collection—2,000 Siren NFTs that riff off their longtime mermaid logo for $100 apiece. (Some stamps are already being marked for resale in the secondary marketplace.) I didn't buy one, but the launch briefly crashed Nifty Gateway, Starbucks' marketplace partner, selling out in under 20 minutes. There is clear consumer enthusiasm for Odyssey, but this is just the beginning. Over time, Starbucks might offer interactive Odyssey-gated experiences, so more of its Rewards users will make the Web3 leap. Like it or not, the ability to monitor the connections and purchases of consumers’ blockchain-connected wallets is likely the next stage of surveillance capitalism. What if you could earn Odyssey points for purchasing a bottled Frappuccino at a gas station? Real life, then, might start to feel like one big Starbucks game. But if the Starbucks metaverse never comes to fruition, at least I’ll still have my stamps. —Duncan Cooper

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BANK RUN

The collapse of Silicon Valley Bank on March 10 was the second-biggest bank failure in American history, sending shockwaves through the tech industry. SVB was a highly regional, industry-specific institution with over $200 billion in assets. Last week, there were signs that SVB was dealing with a cash crunch. The bank sent out a jumbled press release and tried to raise money by selling shares, spooking investors into withdrawing their funds. Within 48 hours, the bank collapsed.

One of the biggest concerns for impacted companies, especially those with significant cash reserves in SVB, was their inability to make upcoming payroll cycles. Startups have had to turn to investors for emergency funds. Up to $250,000 per depositor is insured under the FDIC, but US regulators announced that all SVB depositors' accounts will be protected and fully repaid. Depositors will have access to all of their money starting Monday, according to a joint statement from the Treasury, Fed, and FDIC. The Fed has also implemented a new lending program to reduce the potential for spillover. The chaos seems to be contained for now, but there seems to be no greater recession indicator than a near-disastrous bank run. It's giving 2008. —Terry Nguyen

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PLAYBACK

Snippets of streaming news — and what we’re streaming.

  • The box office bump that Oscar-nominated movies get is shrinking. (CNBC)

  • Disney and Warner Bros are going all-in on theatrical releases. (Financial Times)

  • A silly Styles piece on “podcast bros,” who are doing just fine dating-wise… (NYT)

  • AWARDS SHOW RECAP: A24’s EEAAO sweeps with seven Oscars; Netflix’s All Quiet on the Western Front wins four. Netflix leads the streaming race with six Oscars, bouncing back from last year’s one-trophy win. EEAAO is the first film in nearly a century to have won seven above-the-line Oscars, and is the third film in the award show’s history to win three acting awards. (Variety)

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MIXTAPE

Good links and recs from the Dirtyverse.

  • A must-read conversation with Barbara Smith, a founder of the Combahee River Collective, whose 1977 manifesto coined the phrase “identity politics.” (The Drift)

    • The collective “worked with all kinds of feminists—radical feminists, mainstream bourgeois feminists, people who didn’t call themselves feminists and wouldn’t. We were not separatists. In [our] statement, we talked about the simultaneity of oppression and we talked about how the systems of oppression are interlocking.”

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