Crypto Punks. Bored Apes. Flyfish Club.
These aren’t garage bands from the ’90s Seattle grunge scene. These delightfully pithy monikers are some of the most popular NFTs on the market right now.
NFTs (non-fungible tokens) from a very high level are digital assets that can be purchased, traded, re-sold, or displayed like one would with any physical world art piece.
Over the last year, the market for NFTs has been on a wild ride. In September 2021, a collection of Bored Ape NFTs sold for $24.4 million in an online sale at Sotheby’s auction house.
As popularity has grown with NFTs, brands have begun implementing NFT based memberships to grant exclusive access and perks to holders of these digital assets.
There are NFT social clubs where access to private communities are granted by ownership of a branded membership NFT. There are restaurants using NFT memberships to access premium service amenities like private lounges, extravagant culinary experiences and celebrity dinners. There are even NFT funded film and TV projects where NFT holders are granted access to behind-the-scenes content, meet and greets with cast and crew as well as monetization opportunities over the finished piece of content.
For ecommerce merchants, NFT memberships represent an opportunity to create a deeper sense of community, boost brand loyalty and reward your most engaged customers with exclusive access and privileges.
- Membership NFTs allow businesses to build communities of their most loyal customers.
- Customers are already familiar with the benefits of the membership model.
- Look for the ways to reward your membership NFT holders with exclusive perks, access and content.
Explain like I’m 5… What is a NFT?
Skip this part if you’re well-versed on the ethereum blockchain and/or have a star-studded stable of digital horses for Zed Run.
So let’s break down non-fungible tokens, word by word.
If something is “fungible,”it can be replaced by another identical item of equal value—like a single bitcoin, ethereum, or even a physical world $20 bill. On the flip side, something “non-fungible” is original, unique, and can’t be replaced, like a holographic Charizard Pokemon trading card or a digital image of a cartoon ape looking somewhat apathetic (shouts to Yuga Labs’ Bored Ape Yacht Club).
The Mona Lisa? Non-fungible. A house designed by Frank Lloyd Wright? Non-fungible.
The penny you found on your walk? Fungible.
Now, let’s complete the word trio by adding the word “token” onto the end of “non-fungible.”
Token, in this context, implies a digital certificate of ownership. To get more technical, this token is a verification of authenticity that exists on the blockchain (a shared public ledger of digital information that is unchangeable and tamperproof). The blockchain is decentralized, that is to say it is duplicated and distributed across an entire network of computer systems on the blockchain, as opposed to being stored in one place or controlled by one entity.
To sum it up: NFTs are digital assets which can be created, collected, traded, and sold.
They can be digital art, like “Everydays — The First 5000 Days” from artist Beeple, which sold for $69 million at Christie’s.
It could be an entire video like Charlie Bit Me, which sold for £500,000 that the boys will use to pay for university.
It could even be a social media post, like when former Twitter CEO Jack Dorsey sold his first tweet for $2.9 million to a blockchain company CEO in Malaysia.
But… why would someone pay an exorbitant amount of money to own a NFT when you can do a Google image search for the exact same content?
There’s a couple of reasons, first being that every NFT has a smart contract that verifies and declares ownership of the digital file.
In fact, ownership of all NFTs exist as a public record, meaning anyone can look up any non-fungible token and verify who owns it. Most NFTs are built on the ethereum blockchain (ETH being the shorthand for the aforementioned cryptocurrency), but let’s share the second reason people shell out big bucks for digital items.
If I print off a copy of the Mona Lisa, frame it (in a very nice one mind you) and hang it in my home, did I just hang up a priceless piece of art?
No, I printed a duplicate and stuck it on my wall. It doesn’t have the same value as the original, because it’s not the authentic, one-of-a-kind piece. But just who exactly sets the value of art? Well, the people who buy art do. What they’re willing to pay is the value.
So with the Mona Lisa being worth $860 million USD at last glance—why is this 30 inch by 21 inch painting of a woman with a wry smile worth so much? Because that’s the assigned value of the original piece of art.
So, if someone is willing to pay thousands of dollars for verifiable ownership of a Lazy Lion with a blue mane and pink fur… that’s what that digital asset is worth.
An item, art especially, can cost as much as someone is willing to pay for it. But overpaying for something is silly, isn’t it? Well, silliness is in the eye of the beholder.
Where I live, the real estate market is scorching hot right now. People are buying property for hundreds of thousands of dollars over asking price. The value of a non-fungible asset truly is what someone is willing to pay for it in that moment. Is it worth as much to the next person? That’s a different story. It could go up in value, as popularity increases and more people desire it. Or the market could tank and the value plummets.
But there’s no crystal ball to predict those outcomes (though there’s likely several crystal ball NFTs available for purchase).
How does a membership NFT work?
So we’re all brushed up on NFTs, now let’s take a moment to talk about how they can be used like a permanent ticket to a membership program.
Part of the value of NFTs is their verifiability for authenticity. As technology has evolved brands and creators are now able to sell NFTs to their communities and through verification of these digital assets grant access to exclusive options.
In June 2022, Shopify announced token gating which allows merchants with an NFT collection to give customers access to products and/or services if they own a specific nonfungible token.
Access is granted by customers connecting their crypto wallets and verifying their ownership of designated membership NFTs, which then gives them access to the brand’s store (or a specific section of the store) which may contain exclusive collections, perks and more.
Merchants can even use these membership NFTs in their retail stores, verifying and selling using their point of sale systems (like the NFT collection Doodles did at SXSW in March 2022).
Think of it like branded NFTs being the equivalent of a Soho house membership card or a VIP wristband that gets you backstage at a music festival.
Sounds like a neat concept, but what are the benefits to ecommerce businesses using NFT memberships with their brands?
Why are NFT memberships valuable?
As a market leader in subscriptions and memberships, we can outline why NFT based memberships have so much upside.
Modern day consumers are very accustomed to memberships and the perks they provide in their everyday life. From exclusive prices and products at Costco, to fast shipping and access to a streaming service with Amazon Prime—memberships are known for their value.
NFT based memberships are just the same except customers have a digital asset instead of a club card, VIP wristband or membership pass on a lanyard.
Ensuring you communicate clearly the value of your membership program is how you can target casual fans and turn them into loyal brand advocates.
With a NFT membership program, the sky’s the limit for the perks and benefits members can receive. The membership model intrinsically gives brands countless opportunities to engage with and reward their most loyal customers.
For example, merchants could offer NFT membership holders:
- Access to exclusive products
- Discounts on select products
- Access to virtual events with founders, other NFT membership holders or celebrities
- Opportunities to go behind the scenes at an event
- Early access to limited edition products
- Access to gated or premium content
But NFT memberships aren’t just about selling limited edition products and access to content. The main draw of memberships is creating a sense of community. You are cultivating a sense of belonging and commonality with individuals who own your membership NFTs.
The best brands are incorporating engaged communities like these into their company’s business model. That’s because brand communities provide a space for your most passionate customers to engage with each other, boost brand awareness in their own networks and by joining these programs lower their risk for customer churn.
Brand communities also provide a great place for companies to test new products with their most loyal fans, gather feedback on business initiatives and facilitate referral programs to encourage community members to help the brand reach new customers.
How are NFT based memberships being used?
Let’s look at how some businesses are using NFT based membership models in a variety of ways to connect with customers and provide them with exclusive perks.
Stoner Cats, created by Mila Kunis and Orchard Farm Productions, is an adult animated series where NFT membership is the only way to unlock access to watch the show.
If you purchased one of the show’s TOKEn’s (the branded name of their membership NFT) and verified the authenticity of your purchase, then you’d be granted access to the brand’s gated content forever (along with other exclusive perks).
Stoner Cats first release of 10,000+ NFT based memberships in July 2021 sold out in 35 minutes (netting the project about $8.3 million in total). That amount fully funded the show and immediately opened up the possibility of creating multiple seasons or adjacent pieces of content with future NFT drops.
Fan willingness to sell out a project in less than an hour is why internet prognosticators are so bullish about the potential for NFT based projects and the creator economy. It’s not hard to imagine in the near future, creators consistently utilizing membership NFTs to connect directly with their communities for financing without having to seek additional funding through more traditional means like studios or corporations.
Mila Kunis announced another television project in March of 2022, The Gimmicks, where NFT membership holders are able to choose the direction of the show’s plot at the end of each episode.
Outside of the entertainment industry, let’s circle back to the Flyfish Club which we mentioned right off the top of this post. Set for its grand opening in 2023, the venue is billed as as “…the world’s first member’s only private dining club where membership is purchased on the blockchain as a Non-Fungible Token (NFT) and owned by the token-holder to gain access to our restaurant and various culinary, cultural and social experiences.”
Based in NYC, the venture’s NFT based membership tokens sold out in minutes and raised $14 million. What’s unique about this particular project is the membership tokens are leasable, allowing NFT holders a secondary market to rent out their access to the club for a price.
Lastly, let’s talk about the famous dejected simian NFT collection, Bored Apes.
Owning a Bored Ape NFT grants you membership and access to the Bored Ape Yacht Club which provides numerous perks to members. Owners of the Bored Ape NFT gain access to a private discord of Bored Ape holders, the ability to create and sell new NFTs based upon their Bored Ape.
They’ve also been gifted branded cryptocurrency known as ApeCoin and gain access to real life events like a celebrity filled extravagant yacht party off the coast of Manhattan or an abandoned warehouse party in Brooklyn with appearances from Questlove, the Strokes, Aziz Ansari, Chris Rock and more.
The NFT has celebrity backing as well with Mark Cuban, Jimmy Fallon, Paris Hilton, Eminem and Steph Curry all owning Bored Apes.
Reward your most loyal customers with membership NFTs
It’s a lot to take in and we feel like we barely scratched the surface of the possibilities with membership NFTs. But the main takeaway is to understand that NFTs aren’t a passing fad, they’re steadily gaining in popularity and bursting with potential to be utilized by creative minds.
Whether you’re a big brand looking to innovate or a content creator looking for a way to grow your followership, integrating membership NFTs is a cutting edge way to connect with your community and reward your most engaged customers.