Blackbird is a blockchain-based restaurant loyalty application that connects restaurants and customers to enhance customer attraction and retention. To accomplish this, Blackbird issues rewards and personalizes dining experiences to encourage frequent visits by customers.

Launched in 2023, Blackbird is built on Coinbase’s Layer-2 Base blockchain. The application is decentralized by nature and integrates with such blockchain features as NFTs.

Blackbird has two native cryptocurrencies: $FLY and $F2. $FLY is a reward token that can be redeemed for menu items, merchandise, as well as paying for meals. $F2 is both a gas token and a governance token; the former pays for transaction fees and the latter allows holders to participate in protocol changes and development.

Blackbird is founded by Ben Leventhal, the founder of Eater and Resy, an experienced food-tech entrepreneur who has spent his past 20 years working closely with restaurants. They have a team of 34, among whom the notable includes Zi Wang, the VP of Engineering. He was previously the Head of Engineering at Magic Eden, a well-known NFT platform.

In October 2023, Blackbird raised $24M in a series A funding round led by a16z, with participation from Amex Ventures and Bolt by QED. The round also includes the company’s previous seed investors Union Square Ventures, Shine, Variant, plus leading restaurant groups: Quality Branded, Rustic Canyon Family, Souvia, and Brooks Reitz.

The restaurant industry is a massive and integral part of the U.S. economy, generating more than $1T of sales in 2023 with an annual growth rate of 11%.2 However, despite its high sales volume, the industry has a low profit margin ranging from 3% to 15%, with most restaurants landing around 5%.3 For full-service restaurants, the profit margin is on the lower end of this range as profits are consumed by labor, overhead, cost of goods, and tech solutions such as credit card processing and delivery platforms.

To increase restaurants’ profits, Blackbird proposes the solution of enhancing customer loyalty to drive revenue growth, shifting the focus from reducing costs to increasing sales velocity. Specifically, its platform achieves this goal by issuing rewards (i.e. $FLY) to consumers to incentivize frequent restaurant visits and offering customer segment and behavior insights to restaurants to incentivize participation.

$FLY token is the incentive vehicle used to reward customers. It has an unlimited supply as it is designed to grow with more application usage. Customers can obtain $FLY from Blackbird Labs, the developmental team behind the application, and restaurants. Customers can also purchase $FLY tokens with USDC at a current rate of 100:1. It is worth noting that restaurants cannot mint $FLY themselves – $FLY tokens can only be issued by Blackbird Labs to restaurants, and the exchange rate of $FLY to USDC is arbitrarily set by Blackbird Labs.

To provide an example of how $FLY generally gets distributed and used, consider Sally, a restaurant-goer. Sally signs up for an account and receives 100 $FLY from Blackbird Labs. She earns an additional $FLY when she checks in at a restaurant. As she settles for the tab, she earns $FLY when choosing to use Blackbird Pay. Depending on the restaurants she goes to, she can receive $FLY for spending above a certain threshold, as restaurants have the discretion to design their rewards program to fit their business strategies. With $FLY at hand, Sally can redeem discounts and menu items, upgrade for premium exclusive experiences, and access VIP events.

Currently, $FLY can only be used within the Blackbird application; it cannot be transferred between users or redeemed for cash. However, Blackbird aims to allow $FLY to interact with the wider Web3 ecosystem and to be exchanged for other tokens.

For restaurants, $FLY token serves as a vehicle to transfer valuable data insights. Blackbird collects a customer’s personal information, history of restaurant check-ins, and $FLY wallet balance to compose a guest profile. This data is not public on the blockchain but is aggregated and shared back with restaurants for free. Armed with this data, partner restaurants can better identify proper customer segmentation, optimize menu items, tailor customer experiences, and maximize a customer’s Lifetime Value (LTV).

Beyond the Blackbird app, Blackbird aims to build an ecosystem where other hospitality industry players can join and benefit from the wide acceptance of its $FLY token. To encourage the development of applications within the “Flynet” (the Blackbird blockchain network), Blackbird created the $F2 token. $F2 has a fixed supply of 500M and is primarily used to pay for gas fees. Of the 500M total supply, 50.2% goes to network participants, 35% goes to Blackbird Labs investors and team, and the remaining 14.8% goes to the Blackbird Flynet Treasury, which distributes $F2 tokens to fund public projects built upon the Flynet. The vesting schedule for Blackbird Labs investors and teams is a one-year cliff beginning at the initial unlock for network participants, who can claim their initial tokens when the equired utility threshold is met, followed by 36 subsequent monthly vesting periods.

More recently, $F2 has taken on an ancillary role of a governance token, where holders can vote to make changes to the program’s development. $F2 will be distributed to both diners and restaurants in proportion to their $FLY throughput. This throughput is calculated by combining the amount of $FLY they hold and the amount they’ve burned through spending or redeeming rewards, divided by the total $FLY throughput across the network.

While Blackbird has made customer retention and data insights a focus of its business, a new feature has emerged as a core value proposition: Blackbird Pay, a payment and check settlement network. Launched on July 30th, 2024, it allows customers to pay for their meals with credit and debit cards added in the Blackbird app, $FLY token, or USDC stablecoin. The main draw of Blackbird Pay is its 2% flat credit card merchant fees compared with the standard 3 - 4% credit card merchant fees. The extra 1 - 2% margin would benefit both restaurants and Blackbird, given the low profit margin (5%) within restaurants and serving to comprise most of Blackbird’s revenue.

Blackbird seeks to enhance customer attraction and retention with its blockchain-based loyalty application. By leveraging its native cryptocurrencies, $FLY and $F2, Blackbird offers a unique value proposition that incentivizes customer loyalty and provides valuable data insights to restaurants. With the recent launch of Blackbird Pay, the platform explores further options to lower credit card merchant fees and generate revenue. As of August 2024, Blackbird has onboarded 142 restaurants and 39,624 members, fully launched in New York with additional testing in Los Angeles and Charleston.

Blackbird’s success hinges on several factors including its core business hypothesis that a restaurant’s primary goal is to drive revenue growth through retention of customers. If the underlying problem is due to high operational costs, it is less certain whether increasing sales and revenue is the right approach. This is because profit margins would remain unchanged and restaurants must put in the same amount of labor, potentially exacerbating issues related to labor costs and understaffing.

Additionally, while Blackbird provides data to restaurants, the ability to correctly analyze and derive useful insights to increase profits remains questionable. Tailoring the strategy and making it applicable, raising concerns about the actual utility of comparing data from different types of businesses.

Blackbird enters a saturated field filled with products already offering similar solutions to these same problems. For example, Cash App’s point-rewarding program offers free menu items, and Seated specifically targets the imbalance between peak and off-peak hours. Beli, a food rating app, recommends restaurants based on user preferences. These applications offer more targeted solutions compared to Blackbird’s broader approach. With the abundance of applications targeting restaurants, Blackbird needs to offer a superior solution to gain a foothold amongst such established players.

Another significant weakness of Blackbird is its tokenomics. Effective tokenomics can drive adoption while poor tokenomics can undermine a good application. Blackbird’s $FLY and $F2 tokens have unclear purposes, raising the question of whether the platform requires tokens at all. Essentially, $FLY functions as reward points, which is not a novel concept. $F2 would have no value if not traded and is primarily used for transaction fees within the ecosystem, with no clear role in network governance.

• https://www.prnewswire.com/news-releases/blackbird-labs-raises-24-million-series-a-round-from-a16z-amex-ventures-and-more-to-hel p-transform the-way-restaurants-approach-diner-loyalty-301946664.html

• https://restaurant.org/research-and-media/research/economists-notebook/economic-indicators/total-restaurant-industry-sales/

• https://get.doordash.com/en-us/blog/profit-margins-restaurant-businesses#full-service-restaurant-profit-margin

Blackbird is a blockchain-based restaurant loyalty application that connects restaurants and customers to enhance customer attraction and retention. To accomplish this, Blackbird issues rewards and personalizes dining experiences to encourage frequent visits by customers.

Launched in 2023, Blackbird is built on Coinbase’s Layer-2 Base blockchain. The application is decentralized by nature and integrates with such blockchain features as NFTs.

Blackbird has two native cryptocurrencies: $FLY and $F2. $FLY is a reward token that can be redeemed for menu items, merchandise, as well as paying for meals. $F2 is both a gas token and a governance token; the former pays for transaction fees and the latter allows holders to participate in protocol changes and development.

Blackbird is founded by Ben Leventhal, the founder of Eater and Resy, an experienced food-tech entrepreneur who has spent his past 20 years working closely with restaurants. They have a team of 34, among whom the notable includes Zi Wang, the VP of Engineering. He was previously the Head of Engineering at Magic Eden, a well-known NFT platform.

In October 2023, Blackbird raised $24M in a series A funding round led by a16z, with participation from Amex Ventures and Bolt by QED. The round also includes the company’s previous seed investors Union Square Ventures, Shine, Variant, plus leading restaurant groups: Quality Branded, Rustic Canyon Family, Souvia, and Brooks Reitz.

The restaurant industry is a massive and integral part of the U.S. economy, generating more than $1T of sales in 2023 with an annual growth rate of 11%.2 However, despite its high sales volume, the industry has a low profit margin ranging from 3% to 15%, with most restaurants landing around 5%.3 For full-service restaurants, the profit margin is on the lower end of this range as profits are consumed by labor, overhead, cost of goods, and tech solutions such as credit card processing and delivery platforms.

To increase restaurants’ profits, Blackbird proposes the solution of enhancing customer loyalty to drive revenue growth, shifting the focus from reducing costs to increasing sales velocity. Specifically, its platform achieves this goal by issuing rewards (i.e. $FLY) to consumers to incentivize frequent restaurant visits and offering customer segment and behavior insights to restaurants to incentivize participation.

$FLY token is the incentive vehicle used to reward customers. It has an unlimited supply as it is designed to grow with more application usage. Customers can obtain $FLY from Blackbird Labs, the developmental team behind the application, and restaurants. Customers can also purchase $FLY tokens with USDC at a current rate of 100:1. It is worth noting that restaurants cannot mint $FLY themselves – $FLY tokens can only be issued by Blackbird Labs to restaurants, and the exchange rate of $FLY to USDC is arbitrarily set by Blackbird Labs.

To provide an example of how $FLY generally gets distributed and used, consider Sally, a restaurant-goer. Sally signs up for an account and receives 100 $FLY from Blackbird Labs. She earns an additional $FLY when she checks in at a restaurant. As she settles for the tab, she earns $FLY when choosing to use Blackbird Pay. Depending on the restaurants she goes to, she can receive $FLY for spending above a certain threshold, as restaurants have the discretion to design their rewards program to fit their business strategies. With $FLY at hand, Sally can redeem discounts and menu items, upgrade for premium exclusive experiences, and access VIP events.

Currently, $FLY can only be used within the Blackbird application; it cannot be transferred between users or redeemed for cash. However, Blackbird aims to allow $FLY to interact with the wider Web3 ecosystem and to be exchanged for other tokens.

For restaurants, $FLY token serves as a vehicle to transfer valuable data insights. Blackbird collects a customer’s personal information, history of restaurant check-ins, and $FLY wallet balance to compose a guest profile. This data is not public on the blockchain but is aggregated and shared back with restaurants for free. Armed with this data, partner restaurants can better identify proper customer segmentation, optimize menu items, tailor customer experiences, and maximize a customer’s Lifetime Value (LTV).

Beyond the Blackbird app, Blackbird aims to build an ecosystem where other hospitality industry players can join and benefit from the wide acceptance of its $FLY token. To encourage the development of applications within the “Flynet” (the Blackbird blockchain network), Blackbird created the $F2 token. $F2 has a fixed supply of 500M and is primarily used to pay for gas fees. Of the 500M total supply, 50.2% goes to network participants, 35% goes to Blackbird Labs investors and team, and the remaining 14.8% goes to the Blackbird Flynet Treasury, which distributes $F2 tokens to fund public projects built upon the Flynet. The vesting schedule for Blackbird Labs investors and teams is a one-year cliff beginning at the initial unlock for network participants, who can claim their initial tokens when the equired utility threshold is met, followed by 36 subsequent monthly vesting periods.

More recently, $F2 has taken on an ancillary role of a governance token, where holders can vote to make changes to the program’s development. $F2 will be distributed to both diners and restaurants in proportion to their $FLY throughput. This throughput is calculated by combining the amount of $FLY they hold and the amount they’ve burned through spending or redeeming rewards, divided by the total $FLY throughput across the network.

While Blackbird has made customer retention and data insights a focus of its business, a new feature has emerged as a core value proposition: Blackbird Pay, a payment and check settlement network. Launched on July 30th, 2024, it allows customers to pay for their meals with credit and debit cards added in the Blackbird app, $FLY token, or USDC stablecoin. The main draw of Blackbird Pay is its 2% flat credit card merchant fees compared with the standard 3 - 4% credit card merchant fees. The extra 1 - 2% margin would benefit both restaurants and Blackbird, given the low profit margin (5%) within restaurants and serving to comprise most of Blackbird’s revenue.

Blackbird seeks to enhance customer attraction and retention with its blockchain-based loyalty application. By leveraging its native cryptocurrencies, $FLY and $F2, Blackbird offers a unique value proposition that incentivizes customer loyalty and provides valuable data insights to restaurants. With the recent launch of Blackbird Pay, the platform explores further options to lower credit card merchant fees and generate revenue. As of August 2024, Blackbird has onboarded 142 restaurants and 39,624 members, fully launched in New York with additional testing in Los Angeles and Charleston.

Blackbird’s success hinges on several factors including its core business hypothesis that a restaurant’s primary goal is to drive revenue growth through retention of customers. If the underlying problem is due to high operational costs, it is less certain whether increasing sales and revenue is the right approach. This is because profit margins would remain unchanged and restaurants must put in the same amount of labor, potentially exacerbating issues related to labor costs and understaffing.

Additionally, while Blackbird provides data to restaurants, the ability to correctly analyze and derive useful insights to increase profits remains questionable. Tailoring the strategy and making it applicable, raising concerns about the actual utility of comparing data from different types of businesses.

Blackbird enters a saturated field filled with products already offering similar solutions to these same problems. For example, Cash App’s point-rewarding program offers free menu items, and Seated specifically targets the imbalance between peak and off-peak hours. Beli, a food rating app, recommends restaurants based on user preferences. These applications offer more targeted solutions compared to Blackbird’s broader approach. With the abundance of applications targeting restaurants, Blackbird needs to offer a superior solution to gain a foothold amongst such established players.

Another significant weakness of Blackbird is its tokenomics. Effective tokenomics can drive adoption while poor tokenomics can undermine a good application. Blackbird’s $FLY and $F2 tokens have unclear purposes, raising the question of whether the platform requires tokens at all. Essentially, $FLY functions as reward points, which is not a novel concept. $F2 would have no value if not traded and is primarily used for transaction fees within the ecosystem, with no clear role in network governance.

• https://www.prnewswire.com/news-releases/blackbird-labs-raises-24-million-series-a-round-from-a16z-amex-ventures-and-more-to-hel p-transform the-way-restaurants-approach-diner-loyalty-301946664.html

• https://restaurant.org/research-and-media/research/economists-notebook/economic-indicators/total-restaurant-industry-sales/

• https://get.doordash.com/en-us/blog/profit-margins-restaurant-businesses#full-service-restaurant-profit-margin