If there’s one standout crypto concept in 2021, it’s NFTs. They’ve grown exponentially in popularity, and have seen trades worth hundreds of millions of dollars within months. The trend is clearly here to stay, and brands have hopped on to the idea.
For the uninitiated, I’ll reiterate what I shared in a previous blog — NFTs (Non-Fungible Tokens) have been a unique digital assets that are either rare or unique. A fungible item is one that can be easily exchanged for commonly accepted equivalents. A $1 bill, for example, can be substituted for another $1 bill, four quarters, or a hundred pennies. NFTs can be unique objects, which means that only one of them will ever exist. They can also be rare, which means that only a limited number will ever exist. There is no restriction on what an NFT can represent.
See how brands see this as an obvious market opportunity? NFTs can be used to represent unique merchandise, prove ownership of items — both physical and digital, and of course, also work as digital art. Brands can therefore use NFTs to:
- Design unique customer experiences
- Increase awareness about their brand
- Stimulate customer engagement and interaction
- Generate interest in their products
It’s already happening. With large brands!
#1 NBA Top Shots
Take the NBA. With their release of NBA Top Shots in July 2019, the brand relied on NFTs to represent video clips of highlights from basketball games. The National Basketball Association, the NBA Players Association, and Dapper launched NBA Top Shot, calling it a “revolutionary new experience in which jaw-dropping plays and unforgettable highlights become collectibles that you can own forever.”
The NBA has transferred the rights to its match highlights to Dapper Labs, which has digitized and sold them to consumers. Similar to trading cards, these highlights are packaegd as NFTs and sold in packs. When you purchase them, you own the true, authentic version of the highlight, backed by the NBA. Priced from $9 to $230, they’ve sold millions of dollars worth of revenue. And, of course, you can resell these highlights like any other item, often for a much higher price!
It’s a great example of a brand using NFTs to generate interest in its product and increase awareness about themselves!
#2 Grimes and Kings of Leon
Famous musician and artist Grimes made six million dollars in 20 minutes by auctioning a collection of 10 NFTs. Kings of Leon sold their albums as NFTs. Another example of a direct-to-consumer approach that can generate significant revenues for brands and artists
But it’s not just brands that can make money from NFTs. You can too. Creators are already using them to sell their items. But even as a buyer, you can enjoy the potential of future revenues from secondary sales. We’ve seen so many cases of NFTs being ‘flipped’ for several times their original value.
Yes, NFTs are a new concept, with their actual adoption still fairly low compared to other technologies. But the interest and enthusiasm they generate amongst users is insane, to put it plainly. They are poised to play a solid role in the future of our digital lives, generating enormous amounts of value for both brands, creators and consumers. Mark my words — they’re here to stay!
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