Extra crypto initiatives ought to think about using a blockchain-based equal to airline miles to develop their person base and energy their economies, in response to executives from enterprise capital agency a16z.
In a report revealed on Thursday, a16z acknowledged that one in all crypto’s most underappreciated token varieties known as “arcade tokens.”
These tokens preserve a comparatively secure worth inside a particular software program or product ecosystem, much like airline miles rewards, bank card factors or in-game currencies. They allow customers to carry out particular capabilities inside that ecosystem, fairly than being held for hypothesis.
“Although arcade tokens aren’t for each use case, they signify a essential constructing block within the evolution of crypto networks.”
“Simply as stablecoins unlock new types of commerce, and community tokens allow decentralized value-sharing and governance, arcade tokens can energy digital economies at scale,” mentioned a16z researcher Scott Duke Komimers, chief expertise officer Eddy Lazzarin and others.
Arcade token utilization
One such undertaking, in response to a16z, is the hospitality-tech startup Blackbird and its native $FLY token. The undertaking launched a Web3 funds platform for eating places in mid-2024, with $FLY designed to reward customers and spur adoption of the service.
“Blackbird’s $FLY token permits customers to redeem it in any taking part restaurant, and that redemption conduct is managed on a purpose-built blockchain layer powered by a community token,” the report reads, because it pointed to different use circumstances:
“A decentralized computing community would possibly, for instance, use a community token for safety and incentives amongst compute suppliers, whereas utilizing an arcade token to ascertain community results among the many buyer base.”
“Frequent flyer miles and rewards factors, for instance, can encourage model loyalty and be used to make flight and improve purchases; digital gold can allow you to purchase or promote objects in a online game,” they defined, including:
“As a substitute of granting holders possession rights within the underlying ecosystem, arcade tokens grant holders the flexibility to entry or use sure purposes or providers; crucially, their market worth is designed to be programmatically bounded.”
The report additionally argued that arcade tokens can present necessary utilities for “spend-centric economies or physical-world integrations.”
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A few of the advantages of utilizing arcade tokens embrace worth stability and value, which make it simple for customers to grasp what they’re spending, merely accounting, and simplify tokenomics for issuers.
Stablecoins and different belongings vs arcade tokens
The report additionally highlights that whereas stablecoins can be utilized for comparable functions, the versatile dynamics of arcade tokens current different alternatives.
For instance, issuers can primarily “print arcade tokens on demand” to assist ecosystem development, akin to grants, person and developer subsidies, whereas additionally encouraging customers to remain inside the economic system, as an alternative of spending the funds elsewhere.
Nonetheless, the report outlines that not each undertaking wants to make use of them, as they lack utility in speculative environments or when a community or platform already has a well-established token and ecosystem.
“For instance, layer one blockchain networks which have their very own community tokens typically don’t want arcade tokens to perform,” they argued.
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