Lolli and Spark Link Up to Send Bitcoin Rewards Straight to Users’ Wallets

Quick summary: a shift toward native Bitcoin rewards and user custody

Lolli, the cash‑back app that pays users in Bitcoin, announced a partnership with infrastructure provider Spark to route rewards directly into users’ own wallets. The move replaces, or at least complements, Lolli’s prior model of crediting custodial balances. Lolli says the change is designed to give users full control of their crypto rewards while simplifying how merchants fund payouts. The product promises a faster path from purchase to on‑chain Bitcoin in users’ hands, with an initial rollout now and broader integrations planned over the coming months.

Why this matters for markets and investors

For crypto investors and fintech watchers, the deal matters on two fronts: user growth and Bitcoin flows. If Lolli makes claiming rewards simpler and less tied to an exchange or custodial account, more shoppers may opt in. That could drive higher volume of small, frequent Bitcoin transfers to retail wallets — a steady upstream of on‑chain activity that nudges adoption.

From a market supply angle, the move nudges BTC out of exchange and custodial pools and into private wallets. That doesn’t instantly move market prices, but over time it can tighten the portion of BTC available for quick sale on exchanges. For custodians and exchanges that earn fees on custodial balances, this is a subtle negative: fewer custodial balances can mean less fee revenue and slower growth in assets under custody.

At the same time, infrastructure providers and wallet builders that help users hold keys more easily stand to gain. Firms that enable non‑custodial UX, batch transactions, or simplify on‑chain settlement could see more demand. Overall, the tie‑up should be treated as a modest positive for on‑chain adoption and a cautionary signal for businesses that rely on custodial float.

How the integration changes the product experience

Under the hood, Lolli will use Spark’s plumbing to convert merchant payouts into Bitcoin that lands in a user’s chosen non‑custodial wallet. That could be a wallet Lolli helps create inside the app, or an external wallet the user controls. Spark handles the operational work: converting fiat payouts where needed, batching transactions, and pushing BTC on chain while keeping the user interface simple.

The practical effect for users is immediate: instead of waiting for a custodial balance to update or for an exchange transfer, users can receive mined‑or‑settled Bitcoin directly to their keys. Lolli says the rollout starts now for existing merchant partners, with expanded merchant and wallet integrations over the next few quarters. The exact custody model will matter — whether the app helps users create a seed phrase, uses multi‑party computation, or offers recovery tools — because that determines both security and user support needs.

How this stacks up against rivals and regulatory risks

Rewards apps and browser extensions that pay in crypto are not new. What Lolli is trying to do differently is combine mainstream merchant reach with a native, self‑custody payout. That differentiator could win customers who distrust custodial solutions or who want direct control of their coins.

But there are clear risks. The business model still needs merchants willing to fund crypto payouts at scale and a clear revenue path for Lolli beyond volume growth. From a regulatory spot, pushing coins into user wallets may reduce some counterparty concerns but can draw scrutiny around anti‑money‑laundering, customer onboarding, and payout reporting. If regulators decide that moving fiat into crypto rewards requires more disclosure or controls, Lolli and Spark will face compliance costs and possible limits on reach.

What investors and industry watchers should track next

Here are the concrete signals that will show whether this is a real step forward or a neat pilot with limited reach:

• New user growth and engagement: look for rising daily and monthly active users who claim on‑chain rewards rather than holding custodial balances.
• Wallet adoption: the number of self‑custodial wallets created via Lolli, and the retention of those wallets over time.
• On‑chain flow volume: steady increases in small BTC deposits to retail addresses traceable to merchant payout patterns.
• Merchant signups and churn: whether large merchant partners expand their programs or if participation plateaus.
• Monetization: evidence that Lolli can maintain margins once payouts go on chain, including any fees for instant on‑chain delivery or subscription services.
• Regulatory notices: any guidance or enforcement that affects crypto rewards, custody, or payout reporting in key markets.

Bottom line: this partnership is a practical nudge toward putting crypto rewards directly in users’ hands. For investors, it’s a meaningful indicator of demand for native, off‑exchange custody and a potential headwind for custodial fee models. Execution and regulatory outcomes will decide whether the move becomes a blueprint for wider adoption or a niche experiment. Given the risks, treat the development as strategically positive for on‑chain activity but operationally and legally high‑risk for the firms involved.

Sources

• prnewswire.com