Boost Your Ethereum Dapp Revenue with Crypto Gift Cards

Gift cards have long been a popular way for businesses to drive sales and attract new customers. In 2019, the global gift cards market was valued at over $619 billion, with digital gift cards in particular seeing rapid growth of over 23% annually.

Now the rise of Ethereum and other blockchain platforms is unlocking powerful new possibilities for gift cards. By representing gift cards as digital assets on the blockchain, crypto developers can create cards that are more secure, flexible, and efficient than their traditional counterparts.

Imagine if your dapp had its own custom gift card system, letting users easily buy and share tokens redeemable for in-game items, collectibles, or other digital goods and services. Not only could this attract new mainstream users, it opens up additional monetization opportunities. In this post, I‘ll show you exactly how to make that vision a reality.

Benefits of Blockchain-Based Gift Cards

So what advantages do crypto gift cards offer compared to legacy gift card infrastructure? Let‘s break it down:

⛓️ Trustless and Decentralized

Traditional gift cards rely on a centralized issuer to manage balances and redemptions. There‘s an inherent trust placed in the merchant that they‘ll honor the card‘s value. In contrast, blockchain gift cards live on open, decentralized networks like Ethereum. The card balance and rules are enforced by an immutable smart contract, not the whims of a single company.

🌍 Global and Borderless

Crypto gifts cards are innately global. They can be bought, shared and redeemed by anyone with an Ethereum wallet, regardless of location. There‘s no need to worry about country-specific regulations or payment processing fees.

🎨 Programmable and Composable

Perhaps the biggest opportunity unlocked by crypto gift cards is their programmability. Developers can encode complex logic and behaviors directly into the smart contract. For example, gift cards could be automatically gifted to the top 100 players in a game each week. Or they could be integrated with other web3 protocols for staking, lending or DAO participation.

💸 Efficient and Cost-Effective

Crypto gift cards can reduce many of the costs associated with traditional gift programs. Card creation and distribution can be automated with smart contracts. Instant redemption and balance checking eliminates manual support requests and delays. On networks like Ethereum, crypto gifts cards can piggyback on existing infrastructure for payments and user accounts.

Anatomy of a Crypto Gift Card

So what does a crypto gift card look like under the hood? At its core, each card is represented by a unique digital asset on the Ethereum blockchain. The card‘s key properties and rules are maintained in a smart contract, which acts as the central ledger and business logic layer.

Here‘s a simplified schema for a gift card:

struct GiftCard {
    uint256 value;          // Current card balance
    uint256 createdAt;      // Block timestamp of issuance  
    uint256 expiresAt;      // Block timestamp of expiration
    address issuer;         // Account that issued the card
    address recipient;      // Account that can redeem the card
    bool revocable;         // Whether issuer can revoke
    bool renewable;         // Whether card can be reloaded
    bool transferrable;     // Whether card ownership can be transferred
}

Each GiftCard is identified by a globally unique ID, which can be derived by hashing the card‘s core properties (e.g. issuer, recipient, creation timestamp). This ID acts as a key for retrieving individual cards from storage.

The smart contract maintains a mapping of card IDs to GiftCard structs, recording the complete state and history of all active cards:

mapping(bytes32 => GiftCard) public giftCards;

By storing gift cards on-chain, the system inherits the security and immutability guarantees of the underlying blockchain. The decentralized architecture ensures that no single party can alter the terms of redemption or seize card balances.

How to Issue Crypto Gift Cards

Minting new gift cards is as simple as triggering a smart contract function. The issuer specifies the card amount, recipient address, and any custom parameters like expiration or recharge policies. They then send the corresponding amount of ERC20 tokens or ETH to the GiftCardManager contract.

Here‘s an example function signature for creating a new gift card:

function issueGiftCard(
    address recipient, 
    uint256 amount,
    uint256 expiresAt,
    bool revocable,
    bool renewable,
    bool transferrable
) public payable returns (bytes32) { ... }

The GiftCardManager then creates a new GiftCard object with a unique ID, saves it to contract storage, and emits a GiftCardIssued event with the relevant details. The ID of the newly created card is returned to the issuer.

function issueGiftCard(
    address recipient, 
    uint256 amount,
    uint256 expiresAt,
    bool revocable,
    bool renewable,  
    bool transferrable
) public payable returns (bytes32) {
    require(amount > 0, "GiftCard: amount must be > 0");
    require(msg.value == amount, "GiftCard: incorrect ETH amount");

    bytes32 cardId = keccak256(
        abi.encodePacked(msg.sender, recipient, amount, block.timestamp)
    );

    GiftCard storage card = giftCards[cardId];
    require(card.createdAt == 0, "GiftCard: already issued"); 

    uint256 fee = (amount * issuanceFee) / 10000;
    uint256 claimableBalance = amount - fee;

    card.value = claimableBalance;
    card.createdAt = block.timestamp;
    card.expiresAt = expiresAt;
    card.issuer = msg.sender;
    card.recipient = recipient;
    card.renewable = renewable;
    card.transferrable = transferrable;
    card.revocable = revocable;

    emit GiftCardIssued(
         cardId,
         msg.sender,
         recipient,
         amount,
         claimableBalance,
         block.timestamp,
         expiresAt,
         revocable,
         renewable,
         transferrable
    );

    return cardId;
}

Typically the issuer will be a trusted source like your dapp‘s own backend server or payment processor. However, you may also want to let end users purchase gift cards for each other through your dapp‘s UI.

For example, a user could specify a friend‘s Ethereum address and the desired gift amount, then submit an ETH or token payment. Your dapp would detect the payment, and trigger the issueGiftCard function to generate a gift card funded by the user‘s payment. The GiftCardIssued event would then be used to display the successful purchase to the user.

Redeeming and Managing Gift Cards

Once issued, the gift card is ready for the recipient to use. The flow for checking balances and spending crypto gift cards mirrors traditional gift cards. The recipient connects their Ethereum wallet to the dapp, which then queries the GiftCardManager contract for any cards linked to their address.

The GiftCardManager exposes a simple API for retrieving individual GiftCard details:

function getGiftCard(bytes32 cardId) public view returns (
    uint256 value,
    uint256 createdAt,
    uint256 expiresAt, 
    address issuer,
    address recipient,
    bool revocable, 
    bool renewable,
    bool transferrable
) { ... }

To spend a card, the user initiates a purchase or payment flow in the dapp as usual. But instead of prompting for a token or ETH payment, the dapp offers a "Pay with Gift Card" option. If selected, the dapp checks the user‘s available card balance and gives them the option to apply it to their cart.

When the user confirms, the dapp triggers a redeemGiftCard function:

function redeemGiftCard(bytes32 cardId, uint256 amount) public { 
    GiftCard storage card = giftCards[cardId];

    require(card.createdAt > 0, "GiftCard: does not exist");
    require(card.recipient == msg.sender, "GiftCard: not authorized");
    require(card.expiresAt >= block.timestamp, "GiftCard: expired");
    require(amount > 0, "GiftCard: must redeem > 0");
    require(amount <= card.value, "GiftCard: insufficient value");

    card.value -= amount;
    payable(card.issuer).transfer(amount);

    emit GiftCardRedeemed(cardId, amount);
}

This function checks that the connected user owns the gift card in question, verifies sufficient balance, and ensures the card hasn‘t expired. It then deducts the payment amount from the card‘s value and transfers the redeemed funds to the issuer‘s account.

If you want gift cards that are reusable across multiple purchases, you could tweak the function to leave the remaining balance on the card. But for one-time use cards, you‘d mark the card as fully spent to prevent further redemptions.

For added flexibility, you may want to give recipients the ability to:

• Transfer card ownership to another Ethereum address
• Return or refund an unused card
• Recharge a card‘s balance (if the issuer allows it)
• Extend a card‘s expiration date

These actions would involve triggering a state update on the corresponding GiftCard entry. Access control logic in the GiftCardManager ensures only authorized parties can perform sensitive operations. Importantly, actions like transferring and refunding should respect the original card‘s terms – you wouldn‘t want a user to be able to transfer an expired card.

Designing the Gift Card Experience

Blockchain and smart contracts are incredibly powerful. But to reach mainstream adoption, crypto gift cards need intuitive, user-friendly interfaces. Your dapp should abstract away the technical complexities and provide a seamless experience on par with modern digital gift cards.

Some key components and user flows to consider:

Purchasing: Let users purchase gift cards for themselves or others directly from your dapp. Guide them through selecting a recipient (or entering an email for delayed delivery), customizing the card, and completing payment.

Browsing: Display the user‘s available gift cards with key details like balance and expiration. Let them view full activity history and access terms.

Redeeming: Provide clear calls-to-action for redeeming gift cards. Notify users with available balances and prompt them at checkout. Visually confirm redemption and reflect the new balance.

Sharing: Make it easy for users to send a crypto gift card to friends and family. Let them specify the recipient address, add a personal message, and choose delivery (social share, email, QR code).

Management: For power users, you may want to offer more advanced management capabilities. This could include transferring cards, merging balances, or even reselling cards on a secondary marketplace.

Usability and trust should be the top priorities. Users shouldn‘t have to worry about technical details like gas fees, seed phrases, or smart contract addresses. The dapp should gracefully handle all common scenarios like insufficient funds and expired cards.

Future of Crypto Gift Cards

As the cryptocurrency ecosystem matures, crypto gift cards could become a core primitive with far-reaching use cases beyond simple gifting:

• 🏦 Branded Currencies: Brands could issue gift cards as a form of branded currency. Users earn cards through purchases or engagement, and can redeem them for exclusive products and perks. The more a customer transacts with a brand, the more gift value they accrue.

• 💱 Marketplaces: Crypto gift cards are tradable assets. Imagine a marketplace where users can buy, sell, and swap gift cards from various issuers. Brands could incentivize trading through rewards and promotions.

• 🌐 Universal Cards: Developers could create templates for standard gift cards that are accepted by any compliant dapp or wallet. Compose them with other web3 money legos to unlock powerful new incentive structures and business models.

• ⚖️ Compliance: Gift cards could be a regulatory-compliant alternative to ICOs and token sales. Startups could raise funds by selling gift cards redeemable for future products. Since redemption is constrained to the issuer, they more closely resemble prepaid services than speculative investments.

The combination of smart contracts and web3 infrastructure offers limitless potential. I‘m excited to see how crypto entrepreneurs reimagine gift cards for the open, programmable financial system.

Conclusion

Ethereum is ushering in a new era for gift cards. By representing these familiar assets as smart contracts, developers can create gift cards that are global, programmable, and transparent. Crypto gift cards could be a promising way to drive adoption and spending in your dapp.

But it‘s still early. There are important usability and regulatory challenges to solve. User experience is critical. The most successful crypto gift cards will likely be the ones that feel most similar to existing digital gift cards.

I hope this guide provides a helpful foundation for integrating crypto gift cards into your Ethereum dapp. The complete code samples are available on Github.

What are your thoughts on crypto gift cards? What other interesting use cases can you envision? Let me know in the comments!