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7 Real-world Benefits of NFTs

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February 14, 2024

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Seven ways brands are using NFTs to create tangible value for their customers.

From virtual novelties to marketing powerhouses, NFTs have been on a wild ride since their debut with Kevin McCoy’s Quantum in 2014. 

NFTs catapulted into the spotlight in 2021, hitting a staggering $25 million market value. But they've since faced market fluctuations, making their journey far from smooth as they struggle to reach those heights again. 

As we navigate 2024, the application of NFTs extends far beyond digital art. They're now enablers for unique merchandise, enhanced loyalty programs, innovative in-game rewards, and ticketing.

In this post, we’ll cover seven use cases for NFT in 2024. We’ll explore how brands use NFTs to create tangible value for their company and foster deeper digital connections with their customers. 

1. Gated access

Controlling access to content has long been an unwieldy beast for most brands. Ideally, companies prefer to focus on creating valuable, high-quality content for their audience (and rightly so!), instead of getting bogged down in verifying who should, or shouldn’t, be able to access that content. NFTs can offer a creative solution here. Thanks to their unique, verifiable nature, NFTs can act as a digital pass – a velvet rope of sorts, delineating exclusive access.

Since NFTs are recorded on a blockchain, it's easy to verify the ownership through a digital wallet. Essentially, an NFT can serve as a key to unlock access to a variety of brand offerings, including content, products, and exclusive social spaces.

For a real-world example of this, in 2023, photographer Dennis Schmelz released a collection of NFTs named Auf Reisen 2023. Buying one of these NFTs, each themed after one of Dennis’s photos, would grant holders access to an exclusive masterclass lesson on photography and videography. Holders of the pass also get access to an exclusive community. In Dennis’s own words:

“NFTs empower me to connect directly with my community. No traditional gatekeepers anymore, now I can engage with my supporters, build a loyal community, and even earn from royalties as my art evolves. It’s not only JPEGs that are traded there, there is so much more behind it.” – dennisschmelz.de

Typically when “access pass” NFTs are resold on secondary markets, the rights to access the gated content don’t automatically transfer with them. This setup tends to attract initial buyers who have a genuine interest in the content or experiences being offered, rather than those simply looking to resell for profit. 

Additionally, NFTs can also be non-transferable, which can safeguard against issues like scalping and bidding wars, ensuring a fairer distribution. As we’ll explore later, using NFTs for event ticketing presents advantages for both the brand and the customer. 

2. Merchandise & community projects

Standing out from the crowd is harder than ever, and so, brands are exploring the new engagement opportunities and community initiatives that NFTs enable. 

OnChainMonkey (OCM) is a community of blockchain creators, founders of cryptocurrency exchanges, creators of metaverses, founders of block explorers, and more. OCM offers unique real-world benefits to holders and their communities. Currently, they have an off-chain solution for their NFT holders to earn digital bananas. These bananas can be used in their merch store to buy caps, socks, t-shirts, etc.

What are “on chain” and “off chain”?
On-chain transactions are conducted and recorded directly on a blockchain, ensuring transparency and security through decentralized verification. Off-chain transactions occur outside the blockchain and often involve a third party for validation, aiming to increase speed and reduce costs, with the possibility of later recording these transactions on the blockchain.

Holders of the NFTs are also provided with memberships into a “monkeyverse” and are given votes to use in the OnChainMonkey DAO (decentralized autonomous organization). This DAO has real-world benefits through partnerships with other companies, contests, charitable donations, and much more.

Another runaway success is Nike’s acquisition of RTFKT Studios and their virtual sneakers. RTFKT was previously known as a platform for artists to design and sell virtual sneaker NFTs to digital collectors. This acquisition gives Nick a direct link to a new generation of people who value both physical and virtual merchandise, positioning the iconic brand at the cutting edge of fashion in an exciting new way.

3. Customer loyalty and membership programs

With customer acquisition costs increasing as much as 222% in 2023, 2024 is the year to rethink how you build customer loyalty. One of the more popular methods to combat this has been creating, or improving, a loyalty program.

But with 77% of loyalty programs failing in the first two years, something’s broken. As Roger Williams, Head of the Loyalty Center of Excellence at Marigold writes for the Drum, “The answer usually comes down to one simple mistake: most loyalty programs are overly focused on transactions." Companies should, instead, focus on nurturing the customer relationship. Some big brands, like Starbucks, have found a way to do this by building NFT-powered loyalty programs.

With Starbucks's loyalty program, Starbucks Odyssey, repeat purchases aren’t just a series of transactions, but an interactive journey between an individual and the brand. Starbucks customers earn stamps as they shop, which can be redeemed for discounts and free drinks, but also exclusive merchandise and special experiences. These stamps also open up the door for the Starbucks loyalty program to have a sense of community as members can buy, sell, and trade their stamps with one another to complete “journeys” that yield extra benefits.

4. Reward tokens

The possibilities for NFTs go further as we see how they’re used as rewards themselves! 

Many video games already allow users to buy, sell, and trade items that only exist within digital spaces. These items, while often purchased with real money, are tied to a user’s account - not the person. A digital item that’s an NFT can exist within a person’s digital wallet, which is tied to their identity. 

To see how in-game rewards act as NFTs, look at Crabada, a popular play-to-earn game built on the Avalanche network. 

There are endless combinations of crab NFTs, each attributed to their own unique abilities and strengths. With Crabada, every player has full control of their assets, and every gameplay interaction is processed on-chain with full transparency. This means players can safely collect and trade their tokens within Crabada’s network without the need for a third party to protect against scams.

What’s even more exciting is the play-to-earn format. This means that players can earn $TUS (Treasure Under Sea tokens), their native in-game currency, exclusively by playing games. Yes, players make money by playing Crabada! Players can also earn $CRA, the governance token for Crabada, during specified periods. Both tokens are available and openly tradable on multiple exchanges.

5. Ticketing & events

We touched on gating access to events, rewards, and other benefits using NFTs, but what if we take this a step further and let NFTs themselves act as tickets to special events?  Ticketing is often a major headache for any brand that’s planning on organizing an event. With ticket scalping, third-party sellers, and increased website traffic being a few of the most common gripes. But NFTs are, after all, verifiably unique. They can be used as a mechanism for ticketing!

The GET protocol, through the use of smart contracts and blockchain technology, allows NFT tickets to have a life cycle pre-, during, and post-event. For example, in the run-up to the event,  the organizers and artists can raise funds for events through decentralized finance (DeFi). Eventgoers and event planners are then able to collaborate and make something special. 

Facilitating over 217 events in the last month, whilst supporting over 423 artists and organizers with buyers from 121 countries. The GET protocol is bringing real-world benefits to thousands of eventgoers.

Not only can NFT tickets extend ticket lifecycles, but they also prevent fake tickets and scams which are rampant in the industry. According to Action Fraud, “ticket fraudsters duped victims out of almost £4 million” in 2021, in the UK alone.

Due to the blockchain's unique infrastructure, all parties can be confident knowing they can authenticate tickets themselves. Organizers can get a better hold on reselling and scalping by making NFTs non-transferable. Finally, ticket NFTs allow for extra revenue opportunities which can then be passed down to users as rewards, deals, and more.

6. New customer data points

As data privacy becomes a greater concern for many of us – as highlighted by GDPR and seemingly endless data breaches – marketers need to figure out how to understand their customers in a non-intrusive way. 

NFTs can provide a more transparent way for customers to share data about themselves in return for tangible rewards. As an example, a customer can connect their digital wallet with a brand’s website to share data that’s extremely valuable to marketers such as other NFTs that they own and their transaction history. 

Data about other owned NFTs gives insights into customer preferences and can signify an opportunity for a future brand collaboration. A customer’s transaction history can give marketers an idea of how active that user is. A lot of passive users that aren’t selling or buying NFTs could be a sign of low customer engagement while a lot of customers that sell their NFTs often point to high customer churn. This can help marketers identify the interaction rates of their customers and how successful past campaigns and a new campaign may be. What’s notable here is that the sharing of this data is a customer’s choice. They have the power to disconnect their wallet at any time.

7. Collaboration opportunities

Every marketer understands the importance of brand.

It's why emerging musicians seek collaborations with established artists for their songs. It's why event organizers enlist renowned speakers or performers to headline their events.

Brand collaborations serve as a means for companies to broaden their audience reach, bolster credibility, and create distinctive products or services.

NFTs present novel opportunities for collaborations and co-marketing initiatives among brands, creators, and artists. By analyzing customer transaction histories and wallet contents—information voluntarily shared with marketers—brands can identify potential overlaps with other brands.

Entities like NFTs, identifiable on the blockchain, serve as community markers. These markers can be linked with those of another community, fostering more fluid and open collaboration and paving the way for innovative marketing and engagement strategies

Brands are also exploring collaborations with their most devoted customers. Nike's .SWOOSH program, for instance, empowers Nike enthusiasts to buy, sell, and trade digital apparel. Community members can even design this apparel, with plans for eventual physical production.

What does the future of NFTs look like? 

We’re already seeing NFTs being quietly integrated into our day-to-day lives. Slowly but surely NFTs are becoming more than just the digital collectibles they were known for. As creative utilities, and rewards continue to develop and grow, so too will the demand for NFTs. Brands and creators are looking for ways to improve their customer loyalty programs and increase audience engagement.

Subscription-based NFTs continue to grow in popularity due to the control they bring to end users (or, your customers). Everyone knows the hassle of trying to cancel subscriptions or changing subscriptions and forgetting about them. NFTs can give customers more control over their subscriptions, as they decide to sell them on the secondary market, swap for other subscriptions, or retain their access. Revuto, a Web3 startup, offers lifetime Netflix and Spotify memberships via NFTs. With Revuto not only can users save money but they can also gain full control over their subscriptions.

Loyalty-based NFTs offer a unique way for customers to gain benefits just by allowing them to earn rewards based on holding their NFTs for a set duration of time. These rewards can be anything from physical merch or items, reward tokens, or even NFTs themselves. For businesses looking to draw in new customers or retain existing ones, loyalty-based NFTs are a creative and forward-thinking way to go.

There is also a case for NFTs to be used for credentials in the future. This is because of their trustless nature, which means that anyone can quickly verify, audit, and trace any credentials stored there. Currently, issuers of credentials have to worry about myriad issues like secure storage and verification by third parties. For businesses and individuals, this can be time-consuming and expensive. Blockchain can come in to reduce costs and speed up processes.

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