Barred from advertising, crypto exchanges are winning clients with learn-and-earn programmes

CRYPTO exchanges are ramping up education initiatives as they battle wavering optimism. Among the common tactics: online courses that offer participants free crypto upon completion.

Some observers say these learn-and-earn programmes are a good step towards raising awareness in a sector dominated by uninformed investors, but the more sceptical say these are simply client acquisition techniques.

One example is Binance’s Learn & Earn initiative, which comprises videos and articles on various coins and protocols. In a blog post in March, the exchange said it was launched “in light of the increased demand for blockchain knowledge”. Rewards are distributed within 48 hours after participants pass a quiz.

Binance also has a student ambassadors programme which, according to its website, is aimed at driving crypto adoption and education in schools. Aspiring student ambassadors can apply via its website and those who are successful will receive, among other things, internship and job opportunities, mentorship, and training and certifications in web3.

Binance declined to comment on these two initiatives, including how much crypto rewards it has disbursed via Learn & Earn. But a Binance spokesperson emphasised the importance of crypto education “at a time when market confidence is low”.

“There is a need to re-establish confidence. This requires a new level of transparency, as well as continued efforts to educate people on crypto and the benefits that it could bring,” she said.

Binance also has a training programme for law enforcement officers around the world.

Coinbase has a similar learn-and-earn initiative called Learning Rewards. Since the programme was launched in 2018, users have received over US$100 million in various cryptoassets. These include Basic Attention Tokens, Compound, Orchid, and Tezos. Apart from Compound, each of these tokens was worth less than US$1 at time of print.

“Coinbase’s Learning Rewards allows users to earn cryptocurrencies while learning about them in a simple and engaging way,” the exchange’s regional director for South-east Asia, Hassan Ahmed, told The Business Times.

“The idea is for users to understand more about an asset’s utility and its underlying technology, while getting a bit of the asset to try out,” he said.

Coinbase’s website also includes a “Learn” section where users can find beginner guides, practical tips and market updates, Ahmed added. It also runs a podcast discussing crypto and web3 trends.

Fintech company Revolut, which in August launched crypto trading service in Singapore, has partnered Polkadot blockchain to launch two learn-and-earn courses. It has another course in partnership with defi protocol 1inch Network. In all, these courses have 12 lessons.

Revolut said 93 per cent of its crypto customers have completed at least one lesson in Singapore. Globally, about 2.6 million customers have completed at least one lesson.

“We want to improve our customers’ knowledge of cryptocurrencies, so they can better understand the associated risks and make wiser investment decisions. The first two courses have taken us closer to this vision,” said Mami Kato, Revolut’s head of public relations in Singapore and Japan.

Phemex, another crypto exchange, and crypto data platform CoinMarketCap, which is owned by Binance, also have learn-and-earn programmes.

The Monetary Authority of Singapore (MAS) declined to comment specifically on learn-and-earn programmes. But the regulator does not restrict educational initiatives of crypto firms, and their partnerships with education institutions.

“There is value in enhancing financial literacy on topics including, but not limited to, blockchain technology, digital assets, and market developments. However, content which promotes the trading of cryptocurrencies would go against MAS’ advertising guidelines for digital payment token service providers,” MAS said.

Ankur Gupta, a researcher at the Asian Business Law Institute, is among those sceptical of such initiatives.

“I would always view any education and outreach by corporate enterprises as an extension of their public affairs and reputation management efforts… If I wish to understand tokenisation, how blockchain works, how wallets operate, what the risks are, I would not solely rely on their initiatives,” he said.

Tan Chin Yu, a senior client adviser at wealth advisory firm Providend, said there is value in such programmes. But he was also concerned that they offer a “piecemeal” take on cryptocurrencies, especially because users can pick and choose modules they are more interested in or that can potentially earn them greater rewards.

“An individual might jump into investing without having a more comprehensive view of its risks and where the asset fits into their overall planning,” Tan said.

Hahn Jungpil, an associate professor at the National University of Singapore’s (NUS) computing school, believes the learn-and-earn programmes are targeted at enlarging the exchanges’ customer bases.

“Such incentive-based schemes are usually quite effective as a competitive move when platforms exhibit strong network effects and strong lock-in effects,” said Hahn, who is also director of the NUS’ Fintech Lab.

The above-mentioned learn-and-earn platforms require participants to first sign up for accounts to which the rewards will be credited.

Both Gupta and Hahn noted that proper crypto education would involve educating consumers on the risks and challenges of cryptocurrency trading.

For example, if the platforms offered lessons on how to conduct more rigorous due diligence in terms of scrutinising the different crypto exchanges, or how to evaluate and assess the risks in different cryptocurrencies, they would go a long way in terms of shaping the ecosystem in growing more responsibly, Hahn said.

Gupta added: “Learning about crypto should be about empowering learners to make informed decisions on whether they wish to proceed with crypto trading, and not about enticing them by giving them freebies in the form of crypto, which will almost certainly cloud their judgment about whether crypto is suitable for them and push them to dive straight in.”