Why brands need to get into the NFT space now.
2021 has been the year of the Non-Fungible Token, or NFT.
It started with a big bang when a collection of artworks by Canadian artist Beeple was sold by Christie’s for $69 million.
It continues with a buying frenzy of pixelated CryptoPunks, the now infamous Bored Ape Yacht Club and many others.
These projects are reaching new highs and attracting celebrity buyers daily.
Paris Hilton bought and launched some of her own NFTs and did a great job explaining to Jimmy Fallon what they are.
DJ and music producer Steve Aoki is a collector and creator. Stephen Curry, Grimes and Eminem bought Apes. Snoop Dogg bought a property in the Sandbox metaverse.
Big brands are in the mix as well.
Adidas has recently entered the space. They bought a Bored Ape as well and are collaborating with other projects. They’ve also released their own NFT which sold out almost instantly.
Nike bought RTFKT, a studio focused on developing NFT projects. And Samsung opened up shop in the Decentraland metaverse.
All of this sound crazy, right?
Why should you and your brand even care?
Beyond all the hype and wild stories, the underlying technology is what makes this space so groundbreaking.
Ask yourself this:
With what you know of the internet and social media today, would you have done more or acted differently when it all began?
Facebook used to be a site for college kids. Instagram was for uploading vacation pics. TikTok was for dancing teens. And LinkedIn simply for your CV.
So the answer is probably yes.
That’s why it’s so important to learn about this space now.
Because the attention has moved there.
The fact is, our lives are transitioning into the digital world. According to Statista, our overall time spent on the internet was 75 minutes a day.
That was in 2011.
In 2021, only ten years later, it’s 192 minutes. That’s over 3 hours a day. On average. Worldwide. And it’s increasing dramatically.
The tipping point will be when we spend more time online than offline. For many of us working from home, this has already come true.
So here are four things that I’ve learned over the past year and that are important if you’re a brand looking to get into NFTs.
- Understanding ownership
- Creating a community
- Long-term value
- Building trust
Disclaimer: Before we get into it, what I’m writing here is far from complete. The topic is too complex and vast to do it justice in one little article. I’ve left out some points to simplify, and explanations to some of the terms are explained at the end. Also, check out the links provided for more information.
1. Understanding ownership
People often say: “But I can just take a screenshot, why pay for a jpeg?”
When you buy an NFT of a Bored Ape you buy more than just a jpeg.
You actually own it.
You can do whatever you want with it. That’s because ownership is held in a smart contract on the blockchain for everyone to see.
This is a really important concept to understand.
Because now every digital asset (image, music, video, text, etc.) comes with proof of ownership.
It’s a concept people in design, marketing and advertising are very familiar with. There it’s called licencing. Photos, videos, illustrations and other graphic elements need to be bought with a license in order for you or your brand to use them.
In the metaverse, the virtual worlds that are being built, this could mean buying digital property, owning art and wearing an outfit from your favourite designer.
People can own a piece of your brand. As a digital asset and even in the real world, which I’ll get into in a bit.
2. Creating a community
Your NFT needs to unlock the door to a community.
Owning an NFT and displaying it as your profile picture on social media or the metaverse shows the world that you are part of that community.
It’s a badge. It’s no different to owning a Rolex, driving a Tesla or wearing a pair of Nike Air Force One.
Learn from Apes, Punks, Doodles and CloneX.
These projects are successful because they’ve built great communities. They tap into a human truth: our primal instinct to belong to a tribe.
Just check out the very active groups on the Discord platform and see for yourself.
3. Long-term value
On top of building an active and committed community, the success of an NFT project is determined by its long-term utility.
This means they come with benefits, both digital and real.
- It could be exclusive access to an on- or offline experience.
- It could give you early access to limited products.
- It could be free merchandise.
- Or it could be financial dividends, similar to stocks of a company.
The Bored Apes meet at exclusive parties. Gary Vaynerchuk’s VeeFriends gives its holders access to a yearly conference, with additional benefits, depending on the type of NFT you hold.
Building a solid community and creating benefits for its members long-term is a big part of how a brand’s NFT project succeeds.
4. Building trust
The whole idea behind blockchain technology is to have a trustless, safe and decentralised ledger of peer-to-peer transactions.
This means it gives power back to its users.
This also means that you, the user, are responsible for your assets.
It’s a big reason why many people are still hesitant about buying cryptocurrencies, never mind an NFT.
And for good reason. There’s a lot that can go wrong.
There are countless scams and fake projects that are being hyped — some by high-profile celebrities. And most projects will be worthless in a few years.
Building trust is therefore extremely important.
- Be open about your project
- Show who is building it
- Say why you’re doing it
- Engage with the community
- Be authentic
- Be in it for the long term
And above all… don’t do advertising.
A mistake most brands still make in social media today.
The metaverse is coming
I expect 2022 will be an even bigger year for NFTs.
Not a bold prediction.
Blockchain technology is evolving rapidly. Problems such as sustainability, scalability, accessibility and security are being addressed and solved by newer projects.
Will the bubble eventually burst?
Definitely.
When the Dot-com bubble burst in early 2000, and the dust settled, Web 2 brought us Google, Amazon, Airbnb, eBay and countless other brands we use daily.
Web 3 will produce the next generation of brands.
It’s history repeating itself.
You and your brand need to take a proper look, understand what is happening and develop long-term concepts on how to enter this space.
The metaverse is coming.
And NFTs are going to be essential to it.
The time to get in is now.
Further reading, sources and additional info
- If you’re still unsure about what a blockchain is, here’s a very short description by IBM: A Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a network. IBM: What is Blockchain: https://www.ibm.com/se-en/topics/what-is-blockchain
- A short definition of the metaverse: The metaverse is a shared virtual 3D world, or worlds, that are interactive, immersive, and collaborative.
- Just as the physical universe is a collection of worlds that are connected in space, the metaverse can be thought of as a bunch of worlds, too.
- https://blogs.nvidia.com/blog/2021/08/10/what-is-the-metaverse/
- Popular blockchains for NFTs are Ethereum, Solana and Cardano. Biggest cryptocurrencies by market cap: https://coinmarketcap.com/
- OpenSea, top NFT projects on the Ethereum blockchain (also Layer 2, i.e. Polygon): https://opensea.io/rankings
- OpenCNFT, top NFT projects on the Cardano blockchain: https://opencnft.io/
- Solanart, top NFT projects on the Solana blockchain: https://solanart.io/stats
