Arcade Tokens Are A ‘critical Building Block’ In Crypto’s...

Venture capital firm a16z argues ecosystem-locked tokens, akin to airline miles, could be key for builders to create stable, spendable digital economies without the noise of speculation.

More crypto projects should consider using a blockchain-based equivalent to airline miles to grow their user base and power their economies, according to executives from venture capital firm a16z.

In a report published on Thursday, a16z stated that one of crypto’s most underappreciated token types is called “arcade tokens.”

These tokens maintain a relatively stable value within a specific software or product ecosystem, similar to airline miles rewards, credit card points or in-game currencies. They enable users to perform specific functions within that ecosystem, rather than being held for speculation.

“Just as stablecoins unlock new forms of commerce, and network tokens enable decentralized value-sharing and governance, arcade tokens can power digital economies at scale,” said a16z researcher Scott Duke Komimers, chief technology officer Eddy Lazzarin and others.

One such project, according to a16z, is the hospitality-tech startup Blackbird and its native $FLY token. The project launched a Web3 payments platform for restaurants in mid-2024, with $FLY designed to reward users and spur adoption of the service.

“Blackbird’s $FLY token allows users to redeem it in any participating restaurant, and that redemption behavior is managed on a purpose-built blockchain layer powered by a network token,” the report reads, as it pointed to other use cases:

“Frequent flyer miles and rewards points, for example, can encourage brand loyalty and be used to make flight and upgrade purchases; digital gold can let you buy or sell items in a video game,” they explained, adding:

“Instead of granting holders ownership rights in the underlying ecosystem, arcade tokens grant holders the ability to access or use certain applications or services; crucially, their market value is designed to be programmatically bounded.”

The report also argued that arcade tokens can provide important utilities for “spend-centric economies or physical-world integrations.”

Source: CoinTelegraph