Extra crypto initiatives ought to think about using a blockchain-based equal to airline miles to develop their consumer base and energy their economies, in response to executives from enterprise capital agency a16z.
In a report published on Thursday, a16z said that one among crypto’s most underappreciated token varieties is named “arcade tokens.”
These tokens preserve a comparatively secure worth inside a particular software program or product ecosystem, just like airline miles rewards, credit card points or in-game currencies. They permit customers to carry out particular features inside that ecosystem, rather than being held for speculation.
“Although arcade tokens aren’t for each use case, they characterize 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 know-how officer Eddy Lazzarin and others.
Arcade token utilization
One such venture, in response to a16z, is the hospitality-tech startup Blackbird and its native $FLY token. The venture launched a Web3 payments 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 habits is managed on a purpose-built blockchain layer powered by a community token,” the report reads, because it pointed to different use instances:
“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 determine 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 gadgets in a online game,” they defined, including:
“As a substitute of granting holders possession rights within the underlying ecosystem, arcade tokens grant holders the power to entry or use sure functions or providers; crucially, their market worth is designed to be programmatically bounded.”
The report additionally argued that arcade tokens can present essential utilities for “spend-centric economies or physical-world integrations.”
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Among the advantages of utilizing arcade tokens embody value stability and usefulness, 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 related functions, the versatile dynamics of arcade tokens current different alternatives.
For instance, issuers can primarily “print arcade tokens on demand” to assist ecosystem progress, resembling grants, consumer and developer subsidies, whereas additionally encouraging customers to remain throughout the economic system, as an alternative of spending the funds elsewhere.
Nonetheless, the report outlines that not each venture 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 usually don’t want arcade tokens to perform,” they argued.
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