ASSEMBLE Review

ASSEMBLE protocol is a blockchain-based global point integration platform that exploits ASM utility tokens, whilst establishing a business ecosystem that can integrate, utilize and monetize existing points and miles to point providers, consumers and merchants.

What is ASSEMBLE?

ASSEMBLE Protocol is a blockchain-based global point integration platform. The ASSEMBLE connects the point provider (business) with the consumer, merchant (both customer and business) to alleviate existing limitations, integrate points into one token, create various usage destinations, and abolish time constraints, so that the points can ultimately be used as a valuable commodity.

Point Market’s Scale and Problems

Point Market Size

From the very start of the introduction of the airline mileage points system, the Korean Point System is being applied to various industries nowadays. The airline mileage points system was first introduced by Korean Air in 1984. As of 2017, The largest accumulation of points has been attributed to the credit card companies with a total sum of 2.9 trillion KRW, followed by the airline companies with a total accumulation of 2.6 trillion KRW.
As of 2019, according to the data released by the National Statistical Office and the Korea Consumer Agency, the Korean Point Market is currently estimated to be worth around 20 trillion KRW, with a CAGR trend of more than 10 percent. According to the Japanese Yano Research Group, as of 2018, the Global Point Market is estimated to be worth about 200 trillion KRW, and it is continuing to exhibit aggressive and rigorous growth, with the consistent development of the IoT, and with the recent revitalization of the e-commerce industry.

1. Point Market Problems
   2.1 Point provider’s perspective

▶ Accounting Liability

In fact, there is a huge gap between providers’ and consumers’ perspectives over the existing point system. For point providers, points, that are granted to the customers through their loyalty programs are regarded to be a part of their preferential treatment policy, and they are also recorded on the company’s liability account. When the point provider sells a product, he records the percentage of the point, that has been earned by the customer, as a liability in his financial statement.

Although it is not a debt that the company has to repay in cash, it is still treated as an accounting liability during the period of validity of the point. Thus, if the consumer engages in a transaction with the usage of his accumulated points, the company’s financial statement will be affected, to be precise, the company will extinguish their liability. Nowadays, the profitability of retailers is worsening due to their liability difficulties. There is a correlation between the sharp rise in the debt ratio, which greatly increases interest expenses, and the companies, that are getting eliminated from the list of potential recipients of government funds due to their financial distress. Therefore, the point providers are trying to reduce the benefits, that are associated with the loyalty points, since those mileages and reward points are classified as
liabilities in the company’s balance sheet.

▶ Monetary Loss due to the maintenance cost

As a matter of fact, point providers are currently expanding their franchise stores, focusing on the places, where the customers can easily utilize their accumulated points, such as movie theaters and wholesale stores. As the franchise expands, the cost of building and maintaining a point system increases correspondingly on an annual basis.
However, the value, that is being captured by those loyalty programs is way lower than the cost of their building and maintenance, which is in fact, an NPV negative and ineffective project for a company to engage in. Nonetheless, the point providers must maintain their loyalty programs or any other point system to stimulate the inflow of new customers or, on the contrary, to prevent the loss of existing customers. But this practice, as it has already been mentioned results in huge investment losses every year.
2.2 Consumer’s perspective

▶ Complexity of points

It is not a secret, that consumers also want to use their accumulated points similarly, as they use cash. However, there are currently too many limitations exist pertaining to the usage places and methods of the points, granted by the point providers. Besides, the majority of the customers do not recognize points as valuable goods due to the inability to exploit them in an integrated manner, and also there are not many places, where they can use their earned points. Thereafter, given the abovementioned limitations, the customers’ complaints keep surging day by day.

▶ Constraints on point usage

Unfortunately, the accumulated points cannot be cashed out directly at their own source. There is a huge constrain sought to exist with this practice. In fact, consumers can only cash out their points in a small amount and in certain cases solely (f.e through certain channels, like call centers or apps). Furthermore, according to a point extinguishment policy, many reward points that were earlier granted to the customers are reaching the end of the expiration date. Recently, consumers burst in complaints since there was a scandal of the “Airport Mileage Points”. According to the point provider’s policy, there was a 10-year validity period for the points, and due to the application of that rule, a lot of consumers lost their accumulated points in 2019.

In fact, according to a survey, that has been conducted by the Korea Consumer Agency in 2017, 36.6 percent of consumers stated, that the percentage of the goods, that can be paid with sole points is relatively low, and around 22.2 percent said, that there are not many point usage places available, and around 20.5 percent also said, that their remaining points are going to disappear by the end of the year.

ASSEMBLE Team’s Mission
The ASSEMBLE Team is striving and aspiring in order to solve the aforementioned issues, that are associated with the points, based on a blockchain global point integration platform. The solutions, that our team has presented will be as following:

▶ Point Providers (Enterprises)
In order to extinguish the accumulated liability under the point system and also secure a new channel for the customer inflow, enterprises should increase the point usage places, so that the customers will enlarge their options list.

▶ Point Consumers (Customers)
For the revitalization of the point usage, restrictions on the validity period of points should be abolished, and also new point utilization methods should be introduced.

▶ Franchises (Individual or Enterprise)
The ASSEMBLE platform will provide to both individuals and enterprises new sales channels and efficient advertising tools.

Keep Updated with ASSEMBLE Platform!

Thank you for reading. If you would like to keep updated with ASSEMBLE’s activities, please follow our social media channels below.
Website: http://assembleprotocol.io/
Whitepaper: http://assembleprotocol.io/paper/assemble_whitepaper_ver1.0_kr.pdf?200820
Telegram: https://t.me/assembleprotocol
Twitter: https://twitter.com/ASSEMBLE_io
Facebook: https://www.facebook.com/Assemble-Protocol-102092401488638/?modal=admin_todo_tour
Reddit: https://www.reddit.com/r/ASSEMBLEprotocol/

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