A new insufferable era of the internet is dawning. Web3 has emerged as the catch-all term for anything blockchain, crypto or metaverse-related. Its inexorable entry into the public consciousness has been propelled by the celebrity enjoyed by tech moguls, and the myth that these innovations will catapult us into a utopia free of the tyranny of things like governments, central banks, social networks, brands or anything ‘centralised.’
In the collective mania of the crypto scene, there is one invention more futile, wasteful and logic defeating than the rest: non-fungible tokens (or NFTs). I was astonished to discover that ‘fungible’ is a real word, the etymology of which can be traced to medieval Latin: Fungi vice means to ‘serve in place of.’
Since the start of 2021, absurd NFT projects have arrived, drop after drop. Sportswear brands have launched NFT sneakers. Fast food giants have minted NFT tacos and burgers. Toilet paper company Charmin produced a limited run of NFT bog roll. You can’t wear, eat or wipe your behind with any of this. But that isn’t the point. Producing NFTs for their own sake is dumb, but there is a hidden potential in how they can be used. One-off digital assets might be the most effective tool when it comes to creating a community around your brand right now.
In the club
NFT projects deliver value and loyalty when they are used to create the feeling of an exclusive club. If digital assets represent a key to unlocking real-world experiences, unique products or perks, then owning one becomes much more meaningful.
Consider the rise and rise of the Bored Ape Yacht Club (BAYC). This is an NFT project where folk shell out upwards of $300k on cartoon pictures of disinterested-looking monkeys. It seems stupid, until you realise it’s clever. Owners of these NFTs regularly get given additional digital collectibles that they can hoard or sell for a (often enormous) profit.
Meanwhile, BAYC members hold commercial usage rights to their NFT. That means they’re free to piggyback off the club’s notoriety in their own projects. For instance, an ape-owning restaurateur recently launched a BAYC-themed burger joint in Los Angeles, called Bored and Hungry. It appears to have been a success – a second outlet is expected in Seoul this year.
Exclusivity to inclusivity
There is evidence that NFTs represent a significant in-road for brands wanting to instil a feeling of community around their products.
Of Bulbshare’s global insight community, 53 per cent would buy an NFT if it meant getting access to extras. When asked whether buying an NFT would make them feel part of a community, 51 per cent said that it would. However, 66 per cent said that, right now, NFTs are too exclusive and expensive. This shows the opportunity for companies keen to experiment with the technology.
Offering real-world, tangible benefits is key to unlocking their potential. For instance, mezcal brand Ojo de Dios did this well recently, by launching an NFT membership programme where fans of the spirit could purchase characters that are known collectively as The Odd Squad. Those who buy them can get access to VIP events, limited edition bottles of mezcal and exclusive merch.
We haven’t seen the end of NFT for NFT’s sake. But as creators wrap in more rewards, offers and discounts (and not simply bragging rights), they will be a crucial tool in the box for brands to tap into communities online.
