TL;DR: NFTs are unique digital assets that represent ownership. They revolutionize digital ownership and engagement, providing brands with the opportunity to monetize assets, offer exclusive irl and online access to content or events, and increase revenue. There are two types of tokens: ERC-721 and ERC-1155, which brands can use to drop paid and earned NFT collections. Paid NFTs generate revenue and create exclusivity, while earned NFTs reward the community and foster loyalty.
If you've been following recent news, you've probably come across the term "NFT". While the idea of non-fungible tokens may seem intricate, it's actually a fairly straightforward and captivating topic!
This piece delves into what NFTs are and how they're changing the game in the realm of digital ownership and community engagement.
First, let's start with the basics: What is an NFT? An NFT, or non-fungible token, is a blockchain-based digital asset that represents ownership of a unique item, membership, piece of content, and more. This can be anything from artwork to music, videos, loyalty programs, and more. In fact, the possibilities are endless when it comes to what can be represented as an NFT. It's important to note that unlike cryptocurrencies like Bitcoin, which are fungible and interchangeable, NFTs are one-of-a-kind and cannot be exchanged for another asset on a one-to-one basis due to the types of tokens used. NFTs are also unique in that they are transparent and immutable, meaning that once they are created, they cannot be altered or deleted. This allows for complete ownership and control over the asset, which can be a valuable feature in a world where digital assets are becoming increasingly important.
One of the most exciting things about NFTs is their potential. They offer brands and creators the ability to monetize their digital and real-life assets, lower the cost of acquisition, increase lifetime value, and more with access to on-chain data that highlight customers’ behaviors and improves your web3 strategy. For example, musicians can provide earned NFTs to their VIP ticket holders for exclusive access to merch, virtual interactions, and more. Furthermore, artists can auction off unique digital artworks for exclusive content that gives them access to events, token-gated experiences, and more.
But NFTs aren't just for artists and musicians. Sports teams are also getting in on the action. Our work with The Milwaukee Bucks and Tampa Bay Rays is just one example of this. They launched their digital collectible and membership pass, which offered exclusive benefits to its holders, such as early access to playoff tickets and unique experiences, alongside increasing revenue and visits to their home games with special discounts on food, beverage, and merch.
Both ERC-721 and ERC-1155 are Ethereum-based token standards that can be used for creating non-fungible tokens (NFTs). However, there are some differences between the two standards, and the choice of which one to use depends on the specific use case.
ERC-721 is the original token standard for NFTs on Ethereum, and it has been widely adopted by other blockchain networks, including Polygon. ERC-721 tokens are unique, non-fungible tokens that can represent a variety of assets, including digital art, collectibles, and game items.
Here are some of the benefits of using ERC-721 for NFTs:
Unique identifiers: ERC-721 tokens are unique, meaning that each token has a distinct ID that is not shared with any other token. This is important for applications where uniqueness is critical, such as in art, collectibles, or in-game items.
Interoperability: ERC-721 is widely supported by many wallets and exchanges, making it easier to trade and transfer tokens between different platforms.
Simplicity: ERC-721 is a simpler standard compared to ERC-1155, which makes it easier to use for developers who are new to creating NFTs.
ERC-1155 is another token standard for NFTs that was developed by the Enjin platform. ERC-1155 tokens are more flexible than ERC-721 tokens, as they can represent both fungible and non-fungible assets, which makes them well-suited for use in gaming and virtual world environments.
Here are some benefits of using ERC-1155 for NFTs:
Efficiency: ERC-1155 allows for the creation of both fungible and non-fungible tokens within the same contract, which can reduce gas costs and save on transaction fees.
Flexibility: ERC-1155 tokens can be customized with different attributes, which can be useful for creating more complex NFTs such as game items that have multiple properties.
Batch transfers: With ERC-1155, multiple tokens can be transferred in a single transaction, which can save time and reduce transaction fees.
Ultimately, the choice of which standard to use depends on the specific requirements of the NFT application. If uniqueness is critical and simplicity is preferred, then ERC-721 may be the better choice. If efficiency and flexibility are important, then ERC-1155 may be a better fit.
It's important to consider the benefits and drawbacks of both paid and earned NFT drops when planning their marketing strategies. Paid drops may offer a more immediate return on investment, as they generate revenue through the sale of the NFTs. However, earned drops can help build a more engaged and loyal community of supporters who are invested in the brand's success.
Paid and Earned NFTs are the two primary methods for obtaining items when it comes to a drop.
- Paid NFTs are those that are purchased outright, usually with cryptocurrency and fiat depending on your brand preferences and target audience.
- Earned NFTs are typically earned through various activities such as participating in a game, completing a challenge, or being a more active member of a brand. Despite the additional effort required, many buyers find that earning NFTs can be a more rewarding experience as it adds a sense of accomplishment to their ownership of the NFT.
To make the most out of NFT drops, brands can combine both paid and earned methods by utilizing either depending on the utility and value of the collection. This creates a more diverse ownership ecosystem that caters to different buyer preferences.
NFTs have taken the world by storm, providing a unique way for brands to showcase their identity and values. Paid NFTs are a great way for brands to monetize their digital content and create a new revenue stream for the brand. Brands can use paid NFTs to offer their consumer a new way to support their favorite brand and own a unique piece of digital content.
Paid NFTs are purchased outright by buyers, usually with cryptocurrency or fiat, and can be sold through various methods such as "Buy Now," "Auction," or "Raffle Entry Buy Now." This gives your buyers the option to purchase NFTs instantly, participate in auctions, or enter a raffle depending on your desires.
But the benefits of launching a paid NFT don't stop there. Paid NFTs can help brands to establish the authenticity of their products and create a sense of excitement and exclusivity around the brand. This makes consumers feel like they are a part of something unique, which can lead to increased loyalty and engagement with the brand.
Furthermore Paid NFTs can serve as a redeemable item, offering brands the advantage of allowing customers to pre-order items without the risk of overproducing. By using paid NFTs as redeemable, brands can gauge customer interest and demand for a particular product or experience before actually producing or delivering it. This approach helps mitigate the risk of excess inventory and ensures efficient resource allocation. Customers benefit by securing their desired item in advance, while brands benefit from reducing waste, optimizing production, and maintaining a more sustainable business model.
While paid NFTs are a great way to monetize digital content and engage with consumers, there is another option for brands looking to reward their community without charging for NFTs. Earned NFT Drops are given away for free and can be distributed through claimable distributions which reward your community for specific actions.
We make it easy for any user to participate in these earned NFT drops. Your brand can notify participants of their eligibility utilizing web2 social channels to help create a familiar experience for any user. Our claimable flow is a three-step process that is easy to follow, no matter what the user's expertise in the space is. Additionally, we offer web2 wallets for your less native audience, while still implementing web3 options for those who are more experienced.
Earned NFTs can be a more rewarding experience for the buyer as it adds a sense of accomplishment to their ownership of the NFT. Plus, earned NFTs can be used as loyalty programs that cut operating costs and help increase engagement with your community and build a stronger relationship with your brand.
Updated 2 months ago