How To Grow Your Business Using NFTs
Businesses are always on the lookout for new technologies and trends that they can leverage to improve various areas of their trade. Whether startups or Fortune 500 companies, blockchain technology and NFTs have certainly caught the attention of many companies. This non-exhaustive guide introduces several ways you can grow your business using NFTs.
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Why Use NFTs In Your Business?
NFTs and their underlying blockchain technology has several characteristics that can be valuable for business applications. For starters, each NFT is a cryptographic token representing a unique digital asset. In addition, these unique tokens often have a limited quantity, giving them an inherent element of scarcity.
NFTs also allow for fractional ownership, where multiple owners can own fractions of a certain asset. Fractional ownership effectively introduces liquidity into traditionally illiquid assets such as real estate.
And as with all applications of blockchain technology, there is an underlying assurance of security and authenticity. Hence, NFT transactions will always be verifiable and recorded on an immutable blockchain. This can prove that an owner truly owns a certain digital asset.
Simple NFT Utilities For Businesses
Businesses can actually start incorporating NFTs into their operations with minimum capital investment. They can offer NFTs as a membership token instead of the traditional membership models. For instance, Gary Vee’s Flyfish Club is an exclusive restaurant where only NFT owners can dine in. This membership model introduces a verifiable membership model using blockchain technology, and members can even sell their exclusive membership NFTs on the secondary market.
In addition, companies can also issue NFTs that are linked to their physical merchandise. As the metaverse continues to develop, people may spend more time hanging out in the metaverse as their digital avatars. As such, having digital forms of limited edition merchandise can be a great way to introduce a new revenue source for the company. For instance, Nike have been developing Nike NFT sneakers while Gucci and Louis Vuitton have been releasing luxury NFTs as well.
With the current tools and talents easily available in the market today, companies can literally drop these NFTs in a matter of days with minimal investment.
Using NFTs To Raise Funding
Forbes has identified initial coin offerings (ICOs) and tokenization as a new funding trend in 2021. Throughout the past year, some businesses have already used NFTs as a source of funding. Some filmmakers are now turning to NFTs instead of conventional crowdfunding platforms to source for pre-production funds. Big names such as Anthony Hopkins, Reese Witherspoon, and Mila Kunis are some of the larger names that are active in the space. Today, films like Calladita and Project Iceman are spearheading this new trend as they collect millions of dollars through NFT sales.
Another example is in the gaming industry, where companies sell in-game NFTs while they develop the game. For instance, Dacoco quickly raised $250k in 2 days by selling in-game card pack NFTs for the Alien Worlds blockchain game. These card packs promised investors that they would be able to yield better in-game rewards such as its in-game currency. This funding route provides a fighting chance for small time developers to get the much needed funds to survive in the competitive gaming industry.
Using NFTs For Branding
Whether it is hype or trend, many brands have been able to grab attention through NFTs in 2021/2022. Adidas have collaborated with BAYC and Gmoney to launch the Adidas Originals NFT collection, while acquiring virtual land NFTs in The Sandbox. Nike has its own plot in Roblox and also acquired RTFKT, an AR sneakerhead brand.
Over the past year, many mega events have also used NFTs to attract attention, including the 2022 Super Bowl LVI and the Coachella Music Festival. NFTs made headlines through the NFT tickets, advertisements, halftime shows, and others.
Even fast food chains like McDonald’s and Taco Bell did not let this opportunity escape them. McDonald’s launched the MCNFT to commemorate the return of the McRib to its menu. Whereas Taco Bell launched a series of 25 taco-themed NFTs that were swept off the market in mere minutes.
Regardless of the industry, we have seen creative ideas incorporating NFTs mushroom all over the world. If you can’t find an application for your business, think harder.
As previously mentioned, blockchain technology allows an immutable proof of ownership over digital assets. This allows brands to sell digital products in the form of NFTs where users will appreciate the ability to verify its authenticity. For instance, BlockBar sells NFTs of limited edition spirits from various premium brands like Hennessy and Johnnie Walker. While buyers hold the NFTs in their personal digital wallets, BlockBar holds the physical products in a secure warehouse in Singapore. Given that storing spirits at home can be extremely difficult, buyers can still invest and trade these products without worrying about storage.
As for physical products, manufacturers and sellers can attach NFTs to each order. The NFTs can include information such as its identity, condition, place of origin, status, and other useful information that stakeholders might need to verify. This information can then be updated as the products move through the supply chain. The ability to verify this information can significantly reduce counterfeit products that run rampant in the medical industry, luxury goods sector, and others.
Do keep in mind that NFTs are not the be-all and end-all for your business. This is a relatively new space with much room to grow. Many brands have profited from the launch of their NFTs, but there are clearly many unsold NFTs in the market. As with any other marketing strategies, poorly executed strategies may lead to negative effects for the brand. Also, there is an ongoing debate on whether the sale of NFTs should be regulated under securities laws. Therefore, do consider all aspects before diving into the wonderful world of NFTs!