The three largest US airline loyalty programs — Delta SkyMiles, United MileagePlus, and American AAdvantage — collectively hold an estimated $48 billion in unredeemed miles. If you are one of the roughly 100 million Americans with a meaningful balance of airline miles, you own a financial asset of real value.

You just do not own it the way you think you do.

What You Actually Hold

An airline mile is a unilateral liability of the airline that issued it. When Delta credits your account with 50,000 SkyMiles, it has recorded a liability to you — an obligation to provide future travel or other benefits at redemption ratios that Delta sets, subject to terms and conditions that Delta controls, and that Delta can change with 30 days written notice.

This is not a malicious arrangement. It is the legal structure that all major loyalty programs use. The terms of service that govern your miles balance — which you agreed to when you signed up for the program — explicitly reserve the airline's right to modify, suspend, or terminate the program at any time.

In practice, airlines exercise this right regularly. Delta devalued SkyMiles in 2023 by moving to a revenue-based redemption system that made the same flights require significantly more miles than before. United has similarly recalculated the mile requirements for award travel multiple times without advance notice. American AAdvantage has changed its partner redemption rates, blackout policies, and expiration rules repeatedly over the past decade.

None of this is fraud. It is the contractual right of the issuer of a unilateral obligation — which is what an airline mile, technically and legally, is.

The Counterparty Control Problem

The airline miles situation illustrates the counterparty control problem in its most everyday form. When the value of an asset can be unilaterally changed by the institution that issued it — without your consent, without market pricing, and without any mechanism for you to enforce the original terms — you do not truly own the asset. You hold an obligation of the counterparty, subject entirely to that counterparty's continued willingness and ability to honor it.

This same problem exists across the financial system in forms most people do not recognize:

  • Hotel points: Marriott Bonvoy, Hilton Honors, and Hyatt have all devalued their programs — meaning the points in your account became worth less, applied to your existing balance, without your consent.
  • Credit card rewards: Issuers can change the redemption value of cash-back or travel points programs at any time, subject to notice periods that vary by issuer and jurisdiction.
  • Gift cards: If the issuing retailer goes bankrupt, your gift card balance may become worthless. The retailer's obligation to honor it disappears with the company.
  • Prepaid debit cards: Monthly maintenance fees that reduce your balance over time, inactivity fees, and expiration dates can erode balances without notice in many jurisdictions.

What a Tokenized Loyalty Point Looks Like

A loyalty point on a public blockchain is structurally different from the loyalty point in your airline's database in one fundamental way: the rules of redemption are encoded in a smart contract — a self-executing computer program on the blockchain — and cannot be unilaterally changed by the issuer after issuance without triggering a visible, auditable event on the blockchain.

This does not mean an airline could never change the program. Smart contracts can be designed with upgrade mechanisms. But any change is visible, timestamped, and auditable by any participant — not a quiet update to terms of service that most users never read.

Several loyalty program tokenization projects are already live or in development. Loyalty points issued as blockchain tokens can be transferred between users (most airline miles cannot be transferred), traded on secondary markets (you could sell your miles at market price rather than only redeeming at airline-set rates), used across multiple programs simultaneously (interoperability between hotels, airlines, and retailers), and held in self-custody wallets where the balance cannot be reduced by the issuer without an on-chain transaction.

The $48 Billion Implication

The $48 billion in unredeemed airline miles represents a real transfer of value from consumers to airlines. The consumer paid for the miles — through ticket purchases, credit card spending, or partner transactions — and received a liability that the airline can depreciate at will. The airline, meanwhile, carries the liability on its balance sheet at a value far below what consumers believe they hold.

Delta Air Lines disclosed in its 2025 annual report that it values its unredeemed SkyMiles liability at approximately $8 billion. Consumers, based on survey data about their perceived redemption value, estimate their SkyMiles balances at significantly more. The gap between the airline's balance sheet value and the consumer's perceived value is not an accounting error — it is a structural feature of a system where the issuer controls the definition of value.

Tokenized loyalty points would mark this gap to market — let the exchange rate between miles and travel, goods, or other currencies be discovered by actual market participants rather than set by the issuer. The airline would lose the ability to quietly devalue. The consumer would gain the ability to actually own what they thought they owned.

→ What Is Tokenization? — the infrastructure behind tokenized loyalty programs
→ What You Actually Own — the counterparty risk question applied to securities