Why brands should be all In on NFTs

NFTs, or non-fungible tokens, have swept through culture quickly and in unexpected ways. From Steph Curry utilizing an NFT to make his Twitter profile that of the #BAYC character, to entire communities springing up around art set NFTs, including Bored Ape Yacht Club and ArtBlocks, NFTs have captured our imagination and created an estimated $100 million economy. It's clear NFTs are enabling creators to find a direct connection with their audience and get paid, which has led to emerging communities and, of course, status. NFTs are already a hit with consumers, but what if they show the way forward for brands too?

How brands can build community

NFTs are being used by artists and decentralized organizations to collaborate within their communities. Yet, brands are underutilizing the power of NFTs as a tool for collaboration and community building. NFTs unlock an ability to self-assemble and manage. Early examples include the One-Per-Day Nouns NFTs, which show how a small group of creators built an algorithmically generated set of characters and hit on a unique distribution mechanism—each would be auctioned, with a new auction starting as the last ended. The characters have a quirky wit to them, and this, plus the unusual distribution mechanism, led to intense interest and engagement. Each auction winner owns both the Noun and a share in the DAO that controls the project.

The project amassed a treasury of more than $32 million and the Noun owners have voted to give some of that back to they are building a skate park. The collaboration goes even further—every Noun is in the public domain and the project includes a Noun playground. This means others are remixing and building their own Noun derivative. This decentralized collaboration makes each original Noun more valuable by broadening the base of awareness of the project. This kind of collaborative play has huge implications for brands.

How brands can 'play' with NFTs 

NFTs are fundamentally a form of play. So, of course, gaming is an emerging territory for them and one where brands coming in early can reap huge advantages. Unlike earlier in-game advertising, in the emerging bottom-up NFT gaming world it's possible to own permanent places in a game. Should ambitious brands be grabbing virtual real estate to try to own the next Times Square? Or go further and build out the digital version of the offline role their brand plays? Nike already tried this with virtual shoes. Will top brands build a digital presence in the metaverse? Or will unique collaborations with artists that enliven brands as varied as Uniqlo, Adidas and more be recreated in pure digital form?

Louis Vuitton is a pioneer here. To celebrate its 200th anniversary the company launched "Louis the Game," a phone game embodying six worlds in which players collect candles to win; the game is good—highly playable, and the yield is unique. Thirty embedded NFTs of acclaimed artist Beeple are collectible but interestingly cannot be sold.

The keys to brand ownership and identity

While gaming brings lots of opportunities, the most important way for brands to play in the space is through ownership of their identity. Web3, NFTs and the blockchain are fundamentally new spaces and this means new forms of identity. .eth addresses are emerging as the new must-have naming schema for your wallet. The protocol is independent and cross-platform so your .eth address can host a blog, showcase an NFT collection and perhaps, most importantly, serve as an e-commerce hub with an expectation of a direct connection to a consumer's wallet, literally!

This new, direct connection with a consumer controlling their identity and having currency ready to spend is currently underused in the brand world, so much so that there's not a compelling brand example to include here, but I hope that changes soon.  

Collectively, NFTs represent the future. It is the place where the metaverse, a term used often but with little behind it, starts to come into focus. Whether it's the community and collaboration, the gaming with ownership or just the pioneering chance to own a name in a new place, it's time for brands to focus on NFTs.

So, to those in the space: WGMI!