Company-backed tokens are digital assets that derive their value and purpose directly from a particular business or centralized project. Rather than functioning within an open, independent network, these tokens are purpose-built to incentivize and monetize activity inside one company’s ecosystem—whether it’s an exchange, digital platform, or a specific suite of services. Their destiny is tightly bound to the fortunes and ongoing engagement of the issuing entity. --- ### Core Functions and Use Cases A company-backed token typically acts as a digital loyalty or rewards point with blockchain transparency. Common uses include: - **Fee Discounts & Loyalty Rewards:** Holders may receive reduced trading fees (as with Binance’s BNB), cashbacks, or exclusive deals within the company’s ecosystem. - **In-Platform Governance:** Some companies offer limited voting rights or governance options, though these generally do not extend beyond the company’s scope. - **Access & Premium Features:** Certain features, privileges, or exclusive services are unlocked for token holders. - **Internal Currency:** Sometimes used as a medium of exchange within platform-specific apps, games, or marketplaces—for example, companies may issue their own token as internal "cash." These utilities are designed to deepen user engagement, encourage spending and activity, and promote the platform’s growth in a way that aligns user incentives with company success. --- ### Economic Model and Dependency The economic logic of a company-backed token is inseparable from its issuer. The company determines how the token is used—altering perks, benefits, or tokenomics. The company might even buy back tokens or manipulate supply in line with user activity or profits, much like stock buybacks in traditional markets. As such, these tokens are closer in spirit to extensions of the company’s business model rather than decentralized cryptocurrencies. It’s important to note that if the issuing company’s project fails, is abandoned, or changes policy, the token’s utility collapses. Similarly, most of these tokens are not intended for trade or use beyond the boundaries of their own platform. --- ### Most dApp Tokens as Company-Backed Tokens While many tokens in the Web3 space are labeled “utility tokens,” in reality, the vast majority of tokens associated with decentralized apps (dApps) are company-backed tokens. These tokens frequently grant access or perks within a single dApp or suite of related company-run applications, and their value is maintained by that core team or entity. As highlighted by research and regulatory perspective, these tokens lack true decentralization and autonomy, distinguishing them from genuine network tokens [a16zcrypto.com](https://a16zcrypto.com/posts/article/network-tokens-vs-company-backed-tokens/). --- ### Examples - **BNB (Binance Coin):** Launched by Binance, it offers trading fee discounts, payment within the Binance ecosystem, and powers Binance Smart Chain. Its fate is closely tied to the company and its exchange. - **FTT (FTX Token):** Formerly used for trading benefits and governance on the now-defunct FTX exchange, all value in FTT evaporated with the company’s collapse. - **CRO (Crypto.com Coin):** Used within the Crypto.com ecosystem for card rewards, trading discounts, and payment. - **Many dApp tokens:** Most tokens issued by single dApps or platforms, despite being marketed as “utility tokens,” depend entirely on the originating project and act as internal value units [coinmarketcap.com](https://coinmarketcap.com/academy/glossary/utility-token). --- ### Summary Table: Company-Backed Token Characteristics | Aspect | Description | | --------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **Definition** | Token issued by and dependent on a single company’s platform or project. Drives engagement, loyalty, and monetization in a closed platform environment. | | **Utility** | Platform-specific discounts, perks, access, and (sometimes) limited governance within the company’s ecosystem. | | **Economic Model** | Fully reliant on the issuing company’s business operations, policies, and financial health. | | **Adoption Risk** | High—if the company alters perks, folds, or pivots, the token’s utility can evaporate. | | **Most dApp tokens?** | Yes—most tokens associated with single dApps/platforms act as company-backed tokens, not true network or ecosystem tokens [a16zcrypto.com](https://a16zcrypto.com/posts/article/network-tokens-vs-company-backed-tokens/). | | **Representative Examples** | BNB, FTT, Crypto.com Coin (CRO), and the majority of “utility tokens” seen in single-project dApps. |