Easy ‘money grab’ or an endless new stream of possibilities for organizations? Even though the first NFT was already made in 2014, developments have gone through the roof in the past year. More and more organizations are making full use of the many new possibilities that technology offers, in addition to simply making money selling items. In this article I share 4 possibilities to use NFTs for your organization.
NFTs have opened up a whole new type of economy in the past year. It allows digital creators, artists, brands and others to offer unique digital assets that only have one owner at a time. They have also opened up a whole new field of marketing for organizations in my view. Which opens up new ways to engage customers and fans, offer new types of experiences, increase brand awareness and loyalty, and create new revenue streams.
1. Get rid of flippos and frequent flyer miles
Not only sports clubs, but all types of organizations use NFTs to get fans more involved. For example, by giving certain benefits and extras to every person who sells an NFT, or by giving away NFTs for free to a group of fans (a so-called ‘airdrop’). An American newspaper gave away special tours of NASA for its loyal readers. Tequila brand Patrón gave away virtual bottles of tequila. And Paris Hilton gave the audience of ‘The Tonight Show’ all an NFT as a thank you for coming.
Previously, the American basketball organization NBA has been very successful by selling $350 million in NFTs of all “top shots” made in the competition. Many football clubs such as FC Barcelona and PSV are now also issuing NFTs and the purchase of a club in England is even financed by the sale of NFTs.
A wide variety of models are used here, from reward to decision, to get fans more involved. Reward by giving something extra when loyal fans buy an NFT or by giving a group of fans a free NFT. To be involved, for example by allowing everyone who has bought a certain (group of) NFTs to participate in the decision-making process. For example, the football clubs Fortuna Sittard and Juventus allow owners of their NFTs to participate in the decision-making process about the design and furnishing of the new players’ bus.
2. The mycelium
Setting up a community through NFTs can also be incredibly powerful. A nice recent example of this is VeeFriends, which was founded by marketing guru Gary Vaynerchuk. He spent just over 10,000 NFTs, all of which give access to his online community and events. In addition, they also have different properties and the rarest of them gives the opportunity for a one-on-one conversation with Gary.
The NFT communities are springing up like mushrooms and NFTs are therefore also referred to as ‘social currencies’ within communities. Many organizations are also cleverly responding to this. For example, you only enter the virtual Playboy community (“the mansion”) if you have one of the 12,000 “Rabbitar” NFTs. One of the most famous and best clubs worldwide, the Amnesia in Ibiza (where I am a consultant), has since recreated its club in the Metaverse, where you only enter certain VIP decks if you have a certain type of NFT.
A successful NFT project starts with looking at your community.
The power of a community
In my view, a successful NFT project starts with looking at your community. Looking at what’s going on and what people really care about. They start from the bottom up, not from the top. If we look at the way organizations get in touch and stay in touch with their customers, you see that this is actually no longer about the organization itself, but really about the ideas, stories and shared passion(s) that bring people together. A good example of this is the ‘DinnerDAO’.
The community aspect and story is, in my opinion, just as important as the NFT itself. Recently I heard the wonderful comparison of an NFT community with a mycelium. The interconnected fungal network that forms a community, much like tree roots are interconnected.
I previously wrote about Decentralized Automone Organizations (DAOs) that are basically programmed organizations on the blockchain, where the ‘rules’ are laid down in so-called ‘smart contracts’. DAOs are also usually the technical foundation for NFT communities. A good example here is the DinnerDAO. You can join here by purchasing a particular NFT and then gain access to the community, where the restaurants are discussed for the next dinner party. Voting is decentralized via Snapshot and payments for food are automatically arranged via cryptocurrencies.
3. Digital twins
Juices, nutmeg and talapia fillet were the first consumer products where, with blockchain technology, consumers could view the entire supply chain with an app, see who was paid what at each step of the process and whether claims such as ‘sustainable’ were correct. An infinite number of consumer goods are now being put on the blockchain, from medicines to vegetables. When I speak about this, I often hear mostly jeers and questions why this is necessary. But an average of 500,000 people still die each year from wrong food and hundreds of thousands of people from fake medicines, according to the World Health Organization.
When you buy an expensive branded bag or shoes, you want them to be genuine and not to take home a copy. That’s why you see more and more brands, such as Prada, Cartier and Louis Vuitton, turning their physical items into an NFT as well. So that you, as the owner, can see if the item is genuine by scanning a QR code.
Nike goes a step further with its ‘cryptokicks’ and even lets users customize and resell the digital shoes in the app. In addition, the company recently set up the platform Cryptokickers, with which you can design your own virtual Nikes, make them an NFT and sell them immediately.
A ‘clone’ of your physical product
It is not only the well-known clothing brands that turn physical products into an NFT. From winegrowers to bank producers, countless companies are creating a ‘digital twin’ of existing physical products. This is fairly easy to do and not only can be interesting as a new way to reward loyal customers, more and more companies are also making good money selling NFTs. Adidas sold more than $20 million worth of NFT sportswear last year.
Are these ‘digital twins’ only useful to have? No, they’re going to play a big part in the metaverse, which I wrote about earlier. Even though it is still a ‘far from my bed show’ for many people, it is coming closer faster than we think. Microsoft is already working on Mesh, the Metaverse version of Microsoft Teams. When you’re 3D in a meeting or in the previously described metaverse version of the Amnesia club, do you want to be a standard 3D pawn, or wear cool Nike and GAP NFTs?
4. NFTs: good for charities
Not only commercial companies, but also charities can use NFTs in a new, unique way. I was sad that the World Wildlife Fund’s “Non-Fungible Animals” project was eventually cancelled. They wanted to start selling beautiful NFTs for the conservation of 10 endangered species.
Several charities have already used NFTs strategically for awareness-raising and fundraising, such as: ocean conservation and land conservation,
education for women in Afghanistan, Taco Bell sold NFT wraps to fund scholarships for underprivileged children, and Charmin sold NFT toilet rolls to people in extreme poverty. Charities are finding it increasingly difficult to raise money, especially among the younger generations. NFTs can be a wonderful way to let this target group contribute to the goal in an innovative way and also to become more aware of the necessity.
Developments are accelerating in the field of NFT:
Samsung has already announced that it will support NFTs in both its new TVs and mobile phones, in Asia there is already more searches on Google for ‘NFTs’ than for ‘crypto’, and As I wrote in my previous blog, the technology is developing so insanely fast that all kinds of new possibilities are being added at a rapid pace, such as POABs and PFPs. WWF rejected the NFT project because of the energy consumption involved in making NFTs. According to the most current and reliable estimates, NFTs cost as much energy as the city of Singapore consumes.
Now there are now NFT platforms that are so energy efficient that they even use 5 times less energy than a transaction with the VISA card. But the transition to these platforms is difficult. I am getting more excited every day about the possibilities of NFTs as a foundation for a new digital economy. A day in NFT land now seems like a year in a person’s life. Developments go so fast. I will continue to follow them closely.
Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.
