Recently social media has been abuzz about the Voyager Loyalty Program – or at least the folks I follow on Twitter have. The Voyager Loyalty Program – VLP for short so I don’t have to type it out 100 times in this article – is the loyalty program for the crypto currency broker, Voyager. It relies on their native token, VGX to offer various benefits. If you want to read all the technical details this post from Voyager goes through the nitty gritty.
As with every article here, this is not financial advice, just financial pontification. Always do your own research.
VGX is a utility token created by Voyager. Since the VLP is based around how much of this token you own it’s worth diving in to the tokenomics of the token itself.
Unlike Bitcoin, VGX does not have a capped supply. There is currently a total supply of roughly 278M tokens, and at a price of $3 each at the time of writing gives VGX a market cap of just under $1.5 Billion. For comparison Bitcoin’s market cap is just under $900B and Cardano’s is $75B.
There are a few things that will cause inflation of the VGX token, which will result in new tokens being minted, and the proportion of overall ownership of each VGX holder being diluted.
The current inflation drivers are:
- Growth Pools. Growth pools are used by the Voyager team for marketing purposes, which includes VLP rewards. 40M tokens will be minted in the 1st year, 20M in the second year, and 10M in years 3-8.
- Staking Rewards. VGX currently offers a 7% staking reward to anyone with 25 or more VGX tokens staked. If you use the Voyager app your tokens are automatically staked and you’ll earn 7% yield on your tokens, in addition to all the other benefits of the VLP. New tokens are minted to pay the yield, which only happens for tokens that are staked. Roughly 60% of VGX tokens are staked as of this writing.
There is also an upcoming deflationary driver:
- Withdrawal token burn: 25% of all VGX used to pay for withdrawal fees on the Voyager app will be burnt. Tokens that are burnt are permanently removed from circulation.
VGX also has a built in demand driver for the token, which is the crypto back rewards we’ll talk about in more detail later. At a high level, if you hold enough VGX to achieve a reward tier, then a portion of your transaction fees will be paid back to you in VGX token. This will initially come from the newly minted growth pool, but if the growth pool runs out Voyager will purchase VGX on the open market, creating a new source of demand for the token.
The other source of demand for the token is created as new users join the Voyager platform and look to increase their reward tier level. They will buy VGX, and if demand is larger than supply the price of VGX will appreciate.
Here’s a look at what VGX has done over the last year.
Voyager Loyalty Program
The VLP offers 3 tiers currently.
- Adventurer: Hold 500 or more VGX (~$1,500)
- Explorer: Hold 5,000 or more VGX (~$15,000)
- Navigator: Hold 20,000 or more VGX (~$60,000)
Everyone who holds 25 or more VGX qualifies to earn 7% staking rewards on VGX. As you graduate to higher tiers you will get progressively higher rewards in the following areas:
- Earnings Reward Boost: Increases the yield offered on Bitcoin, Ethereum and USDC Stablecoin by 0.5%, 1% and 1.5% depending on your level.
- Crypto Back Rewards: Gives you VGX back every two weeks based on the price improvement for every transaction you’ve made. I’ll share more in detail below how this works. You’ll get either 1x, 2x or 3x back on the price improvement for your transactions every two weeks.
- Referral Rewards: As you graduate to higher tiers you’ll earn more in rewards from people you refer to Voyager. $30, $35 and $40 respectively. If you’re enjoying the content I create and you’re not yet a Voyager member, please consider using my referral code: 691B12 when you join Voyager. You’ll get $25 in BTC back after $100 in trades.
- Crypto Withdrawal Discount: Will decrease the cost to withdraw crypto from the Voyager platform by 10%, 20% and 30% depending on your level. This is a nice benefit if you’re using Voyager to dollar cost average on a daily or weekly basis to withdraw to a hardware wallet.
- Debit Card Crypto Back: A small amount back on debit card purchases of 0.1%, 0.2% or 0.3%. Personally I don’t think the debit card is valuable since it’s fairly easy to earn 2%-3% back using a credit card and you also get the credit card liability protections.
The Voyager folks made a handy graphic that summarizes their loyalty program:
How Does Voyager Crypto Back Work?
The Crypto Back is calculated for each transaction as follows:
- Calculate Price Improvement by subtracting the estimated price from the fill price. This gives you the ‘Price improvement’ for that transaction that Voyager was able to offer. Voyager is a broker that looks across multiple exchanges for the best price.
- Multiple Price Improvement by the quantity of coins in the transaction.
- Multiple that by your rewards level. 1x for Adventurer, 2x for Explorer, 3x for Navigator.
Every two weeks the value for all transactions will be summed up, converted to VGX and the VGX deposited in your account.
There’s a catch, right? Yes, good question! While Voyager claims ‘no fees’, the fee they charge is embedded in the spread. That’s why you may see Voyager charging 1% more than other exchanges, or even higher for coins with low liquidity. It’s also the reason why I think crypto back is one of the most valuable benefits of the VLP. At the higher tiers the crypto back effectively makes trading on Voyager cheaper than Coinbase Pro who charge 0.5% fee for most regular folks who aren’t doing very high dollar amount of transactions every month. You get all the benefits of low fee trading in a user friendly app!
[Update on 9/19/2021 at 4:40pm CST] As Voyager increases the depth of their order book the spreads have started to shrink, which is great news for investors. This thread from Patrick shows an average of 0.74% spread.
Should I participate in the Voyager Loyalty Program?
Whether to participate in the Voyager Loyalty Program is a personal choice, and I encourage you to do your own research.
Personally I hold VGX and participate in the VLP. I think the rewards are well worth it. You’ll be surprised how quickly the crypto back rewards stack up, the 7% staking rewards are nice and all this will be amplified if the price of VGX itself takes off.
Join Voyager Today use referral code 691B12 to get $25 worth of Bitcoin after trading just $100.
I hope you enjoyed this article. If you have questions please drop them down in the comments below. If I missed something valuable about the VLP or the VGX tokenomics let me know as well so I can provide an update.