Deep Dive into Blackbird Whitepaper
How the ownership economy and Blackbird's tokenomics are shaping the future of dining industry
AI and Crypto share a trend: focusing on user applications over core tech. In crypto, this means emphasizing asset ownership for users. But how can the ownership economy work in reality?
From a consumer's perspective, all the complex tech stuff should stay in the background. What matters is making products and services that actually help people and meet their needs. This means creating things that are easy to use, make sense to people, and give real value - not just showing off complicated tech.
The Power of Ownership
While exploring the concept of the ownership economy, I discovered a compelling perspective from Blockworks podcast. They advocate for blending the best of Web2 and Web3 to create a positive user experience centered around ownership.
Li Jin's insightful statement perfectly captures this philosophy:
"When I talk about what interests me in crypto and its intersection with consumer technology, I don't focus on decentralization – I emphasize ownership. While decentralization is crucial at the base layer to give ownership value and allow people to view what they own, it's the concept of ownership itself that's key."
This resonates deeply because it highlights the importance of prioritizing tangible benefits for users. Instead of getting bogged down in the technical complexities of blockchain, the focus should be on creating products that seamlessly leverage the advantages of ownership without overwhelming consumers.
The challenge, then, is to design intuitive and user-friendly experiences that unlock the potential of ownership without sacrificing simplicity. This delicate balance is key to fostering widespread adoption and realizing the true potential of the ownership economy.
Blackbird: A Case Study in User-Centric Ownership
Blackbird exemplifies this approach, offering a payments and loyalty platform built specifically for restaurants of the future.
The Problem
The restaurant industry faces tough realities:
Average restaurants struggle to turn a profit
Profit margins are shrinking year after year
Existing solutions fail to provide effective ways for restaurants to connect with customers and build lasting relationships
Blackbird's Solution
Blackbird tackles this problem by leveraging the power of blockchain technology to create a more direct and mutually beneficial connection between restaurants and their patrons.
Here's how it works:
Seamless Check-in and Payments: Customers use the Blackbird app to check in at participating restaurants, join parties with friends, and settle their bills effortlessly. Payment options include USDC, Blackbird's native FLY token, and traditional credit cards.
Direct Connection and Real-Time Rewards: Behind the scenes, Blackbird links the customer's identity wallet to the restaurant, enabling real-time rewards and loyalty programs based on spending habits.
Lower Costs, Faster Payments: By eliminating intermediaries, Blackbird drastically reduces transaction fees for restaurants. Payments settle quickly in USD, streamlining operations and improving cash flow.
Blackbird's Dual-Token System
Blackbird is revolutionizing the restaurant industry with its innovative blockchain-based platform. At the heart of this ecosystem are two tokens: $F2 and $FLY. This dual-token approach separates the technical operations from day-to-day rewards, creating a robust and user-friendly system.
The $F2 Token: The Foundation
The $F2 Token is a critical component of the Blackbird network (Flynet or 'L3'), functioning as the network’s gas token. It facilitates transactions across the platform, similar to how ETH operates on the Ethereum network.
Designed to foster sustained participation, $F2 is gradually distributed and governed by vesting schedules and transfer restrictions, ensuring that recipients remain committed to the network’s long-term success.
Purpose and Function:
Gas Token: The $F2 token is required to execute transactions on Flynet, similar to how ETH functions on Ethereum.
Transaction Costs: It covers gas fees for $FLY reward distributions and spending from Blackbird wallets.
Developer Utility: Developers need $F2 to deploy contracts on the Blackbird protocol.
User Experience: Regular app users are shielded from direct interaction with $F2, as Blackbird entities cover these gas fees.
Supply and Distribution:
Fixed total supply of 500,000,000 tokens
Distributed over four years to network participants
13% of total supply available at mainnet launch
Vesting schedules and transfer restrictions ensure long-term commitment
Distribution Mechanism
Blackbird's $F2 token distribution is designed to reward both diners and restaurants based on their engagement with the platform. The system uses separate formulas for each group, reflecting their unique roles in the ecosystem.
Here’s how it works
Diner Distribution
Diners earn $F2 tokens based on their overall activity on the platform. The formula rewards those who actively engage by earning, loading, and spending $FLY tokens.
Formula: (Individual's $FLY Throughput for period / Total $FLY Throughput for period) × Total $F2 Distribution for period
Where:
Individual's $FLY Throughput = $FLY earned + $FLY loaded + $FLY spent
Total $FLY Throughput = $FLY held + $FLY spent (across all users)
This approach encourages diners to not only earn rewards but also use them, promoting a vibrant ecosystem.
Restaurant Distribution
Restaurants earn $F2 tokens based on their $FLY holdings and their interaction with Blackbird's token economy.
Formula: (Individual's $FLY Throughput for period / Total $FLY Throughput for period) × Total $F2 Distribution for period
Where:
Individual's $FLY Throughput = $FLY held + $FLY sold to Blackbird
Total $FLY Throughput = $FLY held + $FLY sold to Blackbird (across all restaurants)
This formula incentivizes restaurants to hold $FLY tokens, potentially stabilizing their value, while also rewarding those who participate in token circulation.
Key Features of the Distribution Mechanism
Proportional Rewards: Participants receive $F2 tokens based on their relative activity level.
Tailored Metrics: Different metrics for diners and restaurants reflect their distinct roles.
Aligned Incentives: More engagement leads to more $F2 tokens, encouraging platform participation.
Token Circulation: The formulas promote spending and selling, not just accumulation.
Scalable Design: As the platform grows, the relative value of each action adjusts, encouraging increased engagement.
Flexible Rewards: Blackbird can adjust the total $F2 distribution to respond to platform dynamics.
Long-term Participation: While $FLY offers immediate utility, $F2 distribution creates a long-term incentive for continued involvement.
This system creates a dynamic ecosystem that encourages active participation from both diners and restaurants. However, its complexity may present a learning curve for casual users. Blackbird's challenge lies in balancing this sophisticated reward structure with user-friendly interfaces and clear communication to ensure widespread adoption and engagement.
The $FLY Token: The Reward Engine
The $FLY token is the heart of Blackbird's innovative restaurant loyalty platform. As a utility token, it serves multiple purposes within the ecosystem, incentivizing engagement from both diners and restaurants.
Purpose and Function:
Utility Token: $FLY serves as a reward mechanism for platform activities and transactions.
On-Chain Transition: Originally existing off-chain, $FLY will be minted on-chain with the Flynet launch.
Distribution: Tokens are transferred to participants’ Blackbird spending wallets on a 1:1 basis.
Supply and Distribution:
Uncapped supply, growing with platform activity
Flexible emission allows for natural ecosystem expansion
Reward Structure:
Base Earn: Provides standard rewards for user actions like check-ins and bill payments, currently funded by Blackbird.
Restaurant Incentives: Restaurants receive $FLY to reward preferred customer behaviors and drive activity during low-volume times.
Additional Rewards: Blackbird may offer extra $FLY for actions that benefit the platform, particularly emphasizing the use of Blackbird Pay.
Platform Growth and Emission Trends
Recent data shows promising growth for the Blackbird platform:
Rapid increase in token emissions, indicating growing user base and engagement
Strategic shift from check-in rewards to Blackbird Pay rewards, encouraging direct financial engagement
Surge in wallet loading, suggesting increased user trust and willingness to hold $FLY
Growth exceeding initial projections, presenting both opportunities and challenges for token supply management
Emission volatility reflecting ongoing platform experimentation and promotional activities
Real-World Application: Lucky's Family Membership
To illustrate how the $FLY token ecosystem works in practice, let's explore Lucky's Steakhouse an American restaurant in New York City's Soho district, which has integrated Blackbird's platform
Membership Program
Lucky's offers a "Family Membership" through Blackbird
New customers can easily claim membership via the platform
Existing members log in to access their benefits
$FLY Token Rewards
Members earn $FLY rewards points on every visit
Tiered reward structure: "The more you visit, the more you get"
Surprise perks like complimentary snacks or drinks for members who check in
Technology Integration
NFC-enabled membership cards for easy check-ins
Digital check-ins notify staff, enabling personalized service
Membership Details
1-year expiration encourages annual renewal and continued engagement
Collaboration with local artist Mika Yokota for membership card design
Privacy and Transparency
Clear communication about data sharing between Blackbird and Lucky's
Adherence to privacy policies builds trust with customers
The Flywheel Effect
As more restaurants like Lucky's and diners join Blackbird, $FLY circulation increases, creating a self-reinforcing ecosystem:
Restaurants offer more attractive rewards
Diners engage more frequently to earn rewards
Increased engagement leads to higher $FLY emissions
Growing token supply allows for more diverse and valuable rewards
Benefits for Stakeholders
For Restaurants (like Lucky's)
Increased customer loyalty and repeat visits
Data-driven insights for personalized marketing
Modern digital presence attracting tech-savvy diners
For Diners
Earn valuable $FLY rewards with every meal
Enjoy personalized experiences and surprise perks
Convenient digital interface for engagement with favorite restaurants
For Blackbird
Growing platform adoption across diverse restaurants
Increased circulation and utility of $FLY tokens
Positioning as a leader in the restaurant loyalty space
The Power of Magic: Beyond the Technical
Blackbird emphasizes the importance of creating "magic" for both restaurants and customers. The on-chain experience needs to be delightful and engaging to compete with established platforms.
Early Success and Future Vision:
Blackbird boasts impressive early traction, with over 100,000 check-ins, 58,000 identities created, 128 million FLY tokens in circulation, and partnerships with nearly 400 restaurants. Their vision extends beyond payments and loyalty programs, aiming to build a thriving on-chain ecosystem for the entire restaurant industry.
Key Takeaways:
Blackbird addresses a pressing need in the struggling restaurant industry by using on-chain technology to improve customer relationships and profitability.
The platform streamlines payments, reduces fees, and enables innovative loyalty programs.
Blackbird prioritizes user experience, understanding that on-chain solutions must be magical and intuitive to gain mainstream adoption.
The company has demonstrated strong early growth and is poised to make a significant impact on the future of the restaurant economy.
Thoughts
Ultimately, my key takeaway from Blackbird is this:
crypto should be the how, not the why.
It's the enabling technology that empowers a more engaging and rewarding user experience, not the primary reason for engagement itself.
Consider Blackbird, a prime example of how deeply ownership can shape the user experience. By leveraging blockchain technology, Blackbird transforms loyalty points and membership cards into tangible, on-chain assets. This creates a seamless integration of payments, loyalty programs, and data-driven insights, fostering a win-win scenario for both restaurants and diners.
Blackbird's success underscores the potential of the ownership economy to revolutionize industries like dining. By focusing on the user experience and leveraging the power of ownership, we can create a future where technology empowers both businesses and consumers alike. This is just the beginning of a transformative journey, and the possibilities are truly limitless.
Hi, I'm Kevin Wang!
By day, I'm a product manager diving into the latest tech innovations. In my free time, I'm the builder behind tulsk.io, a platform dedicated to PM Intelligence. My passion? Breaking down the complexities of web3 and AI into bite-sized, understandable concepts.
My goal is simple: to make cutting-edge technologies accessible to everyone. Whether you're looking to expand your knowledge or apply these insights to your personal growth, I'm here to guide you through the exciting worlds of web3 and AI.
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