The Future of Onchain Loyalty | Ben Leventhal - Blackbird Labs | Natasha Hoskins - Boys Club |

[Music] hello everyone um I didn't introduce myself last time I'll do that this time so I will be your MC for the next hour and a half or so my name is CJ Hunsinger I'm head of platform at Galaxy uh for the ventures team um and so up next we have Natasha from boy club and Ben from Blackbird and they will be talking about the future of onchain loyalty enjoy hi everybody how's it going I'm Natasha from boy club thanks for being here excited to chat um okay so today we are here with Ben lenthal he is a tech meets Hospitality Legend um co-founder of Eder and resi now building the next great Hospitality platform blackbird um arguably Blackbird is one of the only consumer platforms applications that has product Market fit in crypto if you ask me some crazy stats almost 250 million total fly distributed across over 100,000 wallets they announced some big stuff today flynet as well as its native token hi Hi V hi hi how's it going great thanks for being here um excited to have you at eth Denver um okay so there's a lot we can talk about we're going to get into the tech we're going to get into blackbird's announcement uh but before we do that I love restaurants I worked in restaurants for many years I was a hostess I was a waitress um I think a lot about the food I consume and the people that make that food and create those experiences and so I'm curious what brought you to restaurants Hospitality like what was that initial motivation yeah I mean I I I'm just really lucky to have found a career and something that I that I love and and was obsessed with I mean I think everyone some in in some ways loves restaurants and is obsessed with restaurants we go out to dinner on Tuesday nights and on Saturday nights and to celebrate and you know there's probably some memory in your life that's associated with a specific restaurant was your happy place on that night so you know we all sort of have this connection with restaurants and somehow I was lucky enough to turn that into a career but I think what's always been intriguing to me about restaurants is how um underpowered they are economically relative to how much people love them you know it's this huge industry it's a trillion dollars in the US um the brands of good restaurants in all the cities of the US and the world are recognized known Brands but when you look at the individual businesses of these restaurants they're often subscale they fail at an extremely high rate and if and and if that's not bad enough if you look at it over time it's getting worse and worse 10 20 years ago restaurants could eek out a profit by and large today the average restaurant's profit margin is under 5% and you know if you're if you're operating less than 5% you're you're a couple of bad Saturdays away from yeah from losing money yeah um okay I think there's a lot to talk about in terms of like the problem what's broken how Blackbird is addressing that I want to start with the Loyalty piece because I know that's Central to what at least the consumer experience of Blackbird is and you all argue that it's essential for the future of restaurants I think when I think about loyalty I think of a very surface level thing that is maybe an inconvenience to the restaurant but the way that you guys really think about it is that guest segmentation engagement retention all of these things are foundational to a new type of operating as a restaurant so could you talk a little bit about how you think about loyalty in the stack of sort of this more positive future that you're building for restaurants and Hospitality yeah I mean we restaurants and their guests should be connected in scale ways sort of unconditionally I I mean I think there's a bunch of there's a couple different ways you can think about why loyalty is important and why is it broken and we go through them a little bit maybe but the one that to me resonates the most is that restaurants just what in today's in today's technology stack every time somebody walks in into a restaurant more or less the restaurant has to acquire the customer again it's really hard for restaurants to stay connected to their best customers maybe you're a regular at your neighborhood joint and you know the maor D or you know a server that takes really good care of you so your relationship with that restaurant is only good as long as that person's working there yeah and the second that person leaves then you have to start again and so does the restaurant and so that's just a very expensive process right and so when you think about how services like the reserv a companies for sure and some of the POS companies operate and lots of other kinds of third parties that sit between consumers and the restaurant what's happening is they're selling the customer back to the restaurant over and over and over again okay and so if you go back to that point about how thin the margins are that starts to feel pretty untenable yeah and so we just sort of fundamentally believe that every customer in every restaurant should on their own be able to connect and stay connected so you know as when you walk into a restaurant that that's on the Blackbird Network you use the NFC chip you tap in that's a digital handshake that you the customer make with the restaurant now you're connected it's as simple as that and we kind of feel like it needs to be as simple as that for it to be scalable and sustainable um the other reason that this is important is because the big hospitality companies the one that's the ones that actually are at scale the Papa John's of the world and the sweet greens companies like that um they are investing heavily in loyalty okay and so as an independent restaurant whether you like it or not you're competing with Papa John's and Duncan for your customer if you're a coffee shop in the West Village you may not think you're competing with Duncan you are competing with Duncan and so in many ways what we're trying to build with Blackbird is a platform that that levels the playing field that gives the average independent joint the same tools and the same leverage in terms of long-term customer attention that a Duncan has great and I think one of the things that I'm really curious your take on and how you think about it is so this current model is broken the margins are really tiny loyalty is essential but independent restaurants can't really access that and don't have the tools to access that in the same way that these huge conglomerates can and so blockchain fixes this is your argument and so I want to hear of course it is we're here we're here at we're here we're here um so how how do you see the infrastructure that you guys are building like how does it solve for that how does it give these restaurants a shot at that that data collection I know there's a ton of stuff that you guys have built around payments and we can maybe get into the details but I think like high level what is it about Blackbird that is distinctly different because of the way that you guys have built it that gives that restaurant a shot well look I we are we are excited enough about our business and confident enough in our vision to say the that a lot of what we're talking about is is is in the future it's the promise of what's to come this is early days and we all know that um even if sometimes that we get excited about the moment it's early days but the two things that we think are really interesting for us in terms of using blockchain here is number one we're building an entirely new transactions Network when restaurant when a consumer goes into a restaurant and pays as of today that's happening on chain our on our own network and one of those hasn't been stood up in a very very long time and the costs of that chain and because it's a blockchainbased system are a tiny fraction of what they would be if we were using the Legacy rails so we can offer up to restaurants 2% flat as a processing fee we can have a really profitable business and the restaurant is saving almost half wow of what their current cost is so that that's a that's that's a huge win and very exciting and I don't think we could do that in a non in an offchain environment I think if we were to build try to build that otherwise it would be way too hard there would be way too many security issues Ledger issues all kinds of stuff scalability issues the other thing comes back to loyalty and it comes back to Identity so we strongly strongly believe that when a consumer is walking around and visiting restaurants the consumer owns their identity the consumer needs to be able to walk into the restaurant and say Here's who I am if you really think about it consumers can't do that to today because if you want to walk into a restaurant and say well here's the 10 other places I really love you could write it down on a sheet of paper and hand it to them but otherwise there's no technology to facilitate that okay so that's a really good I think example of why onchain matters here so every Blackboard user has a wallet that we spin up in the background and that wallet although anonymized contains a customer's dining history okay so when you tap in with a restaurant we connect that wallet to the restaurant so the restaurant can say okay now I understand who is standing in front of me yeah so those two things more than anything else and all of the ways those two things evolve and mature come together allow for third party developers I think those are those are fundamentally kind of onchain Reason onchain um tools that we're using infrastructure that we're using and is going to today but also even more so over time have Blackbird look totally different than other stuff that's out there that's so honestly inspiring and I think the the thing that clicks for me around it is that loyalty for me is really about personalization and to have a personal relationship with a restaurant that maybe I'm going to for the first time is really powerful and it takes it away from like oh this is a free drink but it's more like I'm sort of known by this restaurant and they're able to access a way that I enjoyed a dine and I like an experience that because of what you're building hasn't previously been really possible so you guys made some big announcements today you launched flynet um I I want to dig into it give us like a high level what's the big announcement what happened today so the big announcement is that we've launched flynet which is our own transaction Network that's on chain it's an L3 on top of Base um and it's live as of today um alongside that we've continued to clarify and I guess finalize our plans for its token F2 and um sometime next week there will be the season one airdrop of F2 this is a this is another reason why Blackbird needs to be on chain somewhat less practical than the two I discussed but the other big thing here is that when we look at the systems that exist for restaurants and by and large that exists in lots of other Industries ownership is is is is inappropriate relative to the players in the industry yeah so one of the big things that we've said from the start is restaurant being a trillion dollar industry must own the network that they're using to process transactions when you walk into a restaurant you sit down you eat the food you want to pay there shouldn't be a third party there yeah you're sitting in the restaurant yeah you don't need any layer of you know you don't need the 3 and a half% that that credit cards take for all the things that they do so we want to build this network for restaurants we want it to be co-owned by restaurants and so the other big piece of this is that the restaurants will be will be co-owners with us of this network F2 the the the gas and ultimately governance token that exists for this network we will we will have some of course but what we have what we've set up is Seven Seasons by which we air drop it to network participants okay restaurants consumers and restaurant workers so today is day Zero but the main net is live everything that's happening on Blackbird is now on chain uh next week is the first airdrop and it only gets more interesting from there great up only um okay so the way that I've understood uh fly net is sort of like it's now Financial rails for the industry like the future of it is that everything could be built on top of these Financial rails and one of the things that really clicked for me around it was around up payments and you're a blackw user you go to a restaurant you pay seamlessly through the app and that being really similar to me of the moment from when I was using Yellow Cabs to when I was using Uber and it's such a small when you say it out loud you're like oh this is really small but the experience of it is completely different it's totally different and like when I'm sitting in in a taxi and I have to pay I'm like oh I'm thinking about how much this costs and like the ride and and I see that for you guys with Blackbird where that transition is going to totally shift the way that people think about how they're paying at a restaurant I I I mean I I absolutely believe it will when I use Blackbird now sometimes I'm still in my neighborhood there's a couple of hold outs that are still restaurants that I love so I I you know I go and despite the fact that they're not you haven't won them over yet well they all on a long enough timeline they are all going to be black birth customers so we don't worry about that but uh yeah the experience is magical yeah you you know you get up and leave when you're done it's so great I love it um so I want to talk about some of your Visions for what can be built on top of fly net so we're here at eth Denver we're in a room full of Builders I think that one of the things that you've talked about that's really compelling is again this way that um the industry itself can actually share in the upside that there's all of these different huge businesses that there's absolutely no access for the businesses that keep those larger businesses alive to engage in and so what are some of the things that you sort of think people could think about building why they would build on top of fly net yeah give some inspiration to the room well I I'm excited to see what people come up with but you know if you want to connect to all of the restaurants of the world all the restaurant consumers of the world and connect to those to those entities and have granular information about who they are what their behaviors are we think flynet is super compelling I would say there's a couple of pet projects that I that I'm excited to see come to fruition and I'm sort of willing the team on nights and weekends to do some of these things if nobody else puts up their hand but one big thing is um this is of the this is certainly you know of the moment but we think there's some kind of food memec coin um game to be played I mean I'd be a holder every every week you know five different food meme coins you compete with you compete um get to vote with fly the winner gets burgers for a year or something nice um dating app is an obvious one like matching on preferences I really think um and this is not pure crypto this is crypto plus plus AI but you know connecting to the world's restaurants the way reservations work the way connectivity works is going to evolve so you could build you could build some kind of AI booking agent on top of fly easily but we have 500 restaurants today it'll be more than 2,000 by the end of the year the number of consumers is growing massively we have 240 million fly in circulation wow you know there's there's real raw material there to play with so we're excited to see what happens yeah there's so much distribution that people could could utilize um okay so some of the things that you talk about in this most recent announcement is seamless payments which we talked about new data no middleman whole new economy can you talk a little bit more about the last three I think we talked about like personalization but I think there's more there around data and what it means for restaurants um and then the no middleman and and new economy I'd love to hear a little bit more about well the new economy is what is the end result right I mean the new economy is what happens when there are fewer middlemen and restaurants are more in control of the network that they're using I mean the the simplest math to understand this is restaurants are right now paying three 375 basis points plus or minus for transactions Blackbird they're paying 200 so there's almost 200 basis points there to reinvest there's 200 basis points that restaurants can now use off of Topline Revenue to give back to customers to build new infrastructure to tip out waiters and hostesses whatever it is it's that's that's a big change yeah 2 % of Top Line is a lot for a restaurant when all they're making in the end is 4% right so I think that there's just a lot that's going to happen there's a lot that's going to change that 2% it may not feel like much but it's 2% that the restaurant doesn't have control of today so we really like how it feels to say to the restaurants do what you want with this yeah it's yours um so I think that's one big example but but again as restaurants um come to earn more more and more of the network ownership and control they're going to be able to set their own boundaries about what the how the network behaves you know right now what we've said is the network is going to take a 25 fly clip on every transaction and that fly is going to acrw and then be redistributed to the holders of F2 so restaurants may decide that that that's not actually the way they want to do it they may decide that uh there'll be a more expensive clip on Saturday nights because the business is better and and it'll be cheaper to process on Monday's Tuesday tues days right so I just think there's a lot that the restaurants can do once they get control of the system yeah okay we're um we're running low on time here last question favorite restaurant in New York you you can't really ask that come on you have to say one I love where you would go Saturday night where would you go Saturday night oh well here's what I'll tell you i' we've been playing around a ton with um with Claude and with AI uh at Blackbird because we have a bunch of stuff that later this year we're going probably we're going to start doing but one of the quick things I did was I took my last three years of um dining history and I plugged it into claw cool and I just asked it for some dashboarding and like what's going on so I will tell you this okay 35% of all of my dining the last three years has been at raaps Via corota and esod wow so whether or not so we'll let the data speak that's okay like clearly like those rest I love it I love it well thank you so much ben thanks for being here