- NFT's are a big market now. Brands need to get involved. According to Chainalysis users have sent at least 26.9 Billion worth of cryptocurrency as NFT smart contracts between Jan-Oct 21. Value, average transaction size are both on the incline. Apart from the big news worthy NFT being sold like the first tweet $2.9m, NBA highlight of Lebron James $208k, Nyan Cat $600k
- NFT's are now becoming mainstream with the adoption of celebrities like Shag, JayZ, Snoop Dog but also brands like Disney, Nike, Pepsi and many more access to NFT's has become easier.
- Like real life people want to own unique pieces that mean something to them, "Value is in the eye of the beholder"
- Scarcity is a technique to increase value. Based on simple supply and demand limiting the amount available or the time users can claim or buy a NFT will make it more desirable.
- Brands are in a unique position as they can tap into years worth of branded assets, right now that might be simple 1:1 images or GIF style content as a collection (Plenty of branded examples below) but in the future it could be fully 3D items that can be used in metaverse experiences.
The rest of the blow post will Cover the basics of NTFs, Then explore different sectors (Gaming, Fashion, Music, Tickets, Unique moments in time and Merchandise) then I will touch on some Cool collections from well known brands. At the end I will recap some main points and my personal POV/Predictions for 2022+.
Last updated: 4th Jan TLDR.
I've jumped the gun for some readers, so back to basics 'What is an NFT?' An NFT, or non-fungible token, is a data point stored in a blockchain that certifies a digital piece of media to be unique.
When you buy an NFT, you’re essentially purchasing a “certificate of ownership” of a meme, gif, piece of art, video clip, or other digital assets. You don’t own the copyright, but it’s yours, like an original painting.
Another thing to mention is that NFT's are bought with cryptocurrency and the most common one for buying NFT's is Ethereum. Crytocurrcies work on a blockchain which is like a giant online ledger that records transactions and other data.
'But why use Ethereum, why not use Bitcoin I've heard of that cryptocurrency?' I asked myself the same question. The answer is that cryptocurrencies are “fungible” i.e. interchangeable. Every bitcoin is exactly the same. So in simple terms, the blockchain could only record amounts. Ethereum on the other hand allows it's users to add notes to the blockchain register making these notes unique "none-fungible". A note with a unique number can then stipulate who owns what as proof of ownership.
This sector is going to accelerate the NFT industry in 2022. We have seen some news in this space from big publishers/game developers.
Ubisoft is BETA testing a new in house system called QUARTZ that will allow players to use NFT's as in game cosmetics that can be used between Ubisoft games.
New space to watch is blockchain gaming.
- Axie Infinity which has 2.8m daily users. Items, land and Axies(in game pets) are tradeable through a blockchain marketplace with Ethereum, and the items aren't cheap for example Land spots in game go anything up to $81k USD.
- Another growing metaverse environment is called The Sandbox which is a virtual world where players can build, own, and monetize their gaming experiences using $SAND (their own cryptocurrency), the main utility token of the platform. The game is split into Voxel editor where users can design assets, a marketplace to buy/sell these creations, then last the Gamemaker build into the game these experiences. This game also has some brands getting involved, ATARI, Care Bears, Smurfs, Deadmous5, Snoopdogg.. all getting in early to generate new ways of making money.
Card collectors can now collect digital playing cards. Sorare is on OpenSea which is the official licensed provider for 215 football clubs for collectible digital cards. I can imagine Pokemon and or Nintendo is also looking at this space.
Some what a subset of gaming is gambling, Zed is an example of how this is brought to life, Zed is a digital horse racing game, which uses ETH to gamble on races but also buy horses for gains. Side POV, Governments are going to have a hard time regulating this industry to stop at risk users or children playing.
Like in the real world people use fashion items to represent themselves and in the digital space it will be the same. The shoes, apparel and more made by these brands below will be collected as valuable assets but could also be used in metaverse environments to showcase to friends and followers.
- The Under Armour approach was interesting. People could unlock the shoes used for a charity event, then use this NFT (A Metaverse compatible asset in the game Town Star as an in-game cosmetic and daily buff on their in game stats.
- Nike recently bought a digital sneakers startup RTFKT. Buying RTFKT could help Nike ramp up its own production of virtual wearables without having to rely on outside help.
- Adidas launched a collection with a different approach. It’s directly collaborating with cool crypto brands and influencers through deals with Bored Ape Yacht Club, The Sandbox game, Coinbase and others Bored Ape Yacht Club, Punks, and Gmoney.
- Gucci, which auctioned off a four-minute NFT film titled Aria for $25,000 all the money raised went to charity UNICEF USA to help with global COVID-19 vaccines.
- New York-based jeweller Jacob & Co turned its SF24 Tourbillon timepiece into an NFT and sold the digital watch for $100,000 at auction. The anonymous bidder paid in cryptocurrency and nabbed the prize during a 24-hour auction on the ArtGrails NFT platform.
- Louis Vuitton enters the world of NFTs together with BEEPLE. They created a game that users could play then have a chance to collect one of 30 NFT's. The game is available for both **iOS** and **Android**. devices.
- Dolce & Gabbana launched a NFT collection in partnership with digital marketplace UNXD. Here is an example of one of the items 'Dress from a dream: Gold' Link this NFT was sold for 225.5 wETH which is around $911,760.76. This NFT also allows the user to have unique in the real-world experience going to events or tours of D&G.
- Musicians will have alot more freedom and control over their content. Royal is a company in this space where an musician can sell part of their songs, then collectors receive royalties for the songs they buy. Another service Audius working on a decentralized token $AUDIO to let fans pay artists directly. Another service sound.xyz doing a similar thing. the issue right now these platforms don't have the scale, the main streaming services are alot easier to use. But if these services can offer something unique we will need to watch this space closely.
Artists are diversifying the content they offer through these market places.
- Hip-hop legend Snoop Dogg has debuted his first NFT “Decentral Eyes Dogg”. (Image 1 below)The NFT is a stereoscopic 3D collage of 10 different portraits of Snoop Dogg from various stages throughout his life, underscored by an original NFT-inspired soundtrack by him. He is also on The Sandbox game which has NFT Entities users can buy, trade but place on their land. (Image 2)
- SmartStudy, the South Korean company behind brand Pinkfong and viral children’s song-turned-cultural phenomenon “Baby Shark,” has announced its first foray into the NFT marketplace. NFT's can be found here.
- Universal Music which has musicians like Drake and Taylor Swift, is working with collector Jimmy McNelis to convert four of his NFTs into a band called Kingship. The band will then perform and participate in video games, virtual-reality applications and across the constellation of digital experiences known as the metaverse. A new group within UMG called 'metaverse group' has been set up by former Sony exec Celine Joshua with the initial intention of signing artists, social media influencers and digital media creators with a focus on creating multimedia content.
- Further news from Universal is that they are set to develop virtual identities and NFTs of their artists. “providing a persistent virtual representation of themselves across the metaverse to engage with fans in expressive and authentic ways” I see Drake being made into a Virtual versions of himself then this being placed into different multiverse environments. Then his art and content can then be sold in market places.
- The resell market is a nightmare for fans as it can drive up the price quickly with bulk buyers. Also fraud with resells tickets leaves millions of fans disappointed a year. With a blockchain approach the events/music labels will have better control how tickets to their events are sold. Also Fans can easily validate is a ticket is from the official sellers.
- We have seen Live Nation enter enter the NFT space for select shows Live Stubs digital collectible NFTs will mirror the unique section, row, and seat of each ticket purchased.
- NFL offers commemorative NFT ticket stubs to fans This is then managed by Tickermaster dedicated marketplace. NFL Rep "Leveraging the emerging world of NFTs is a new and exciting way for us to create additional value and to further engage with fans who attend select games by providing a virtual commemorative ticket"
Unique moments in time
- Like the NBA Sports highlights mentioned at the start of the blog post, in 2022 there will be an explosion of brand that open unique moments on time for people to own as a NFT. A interesting example of this is in Chess! Yes people can own games or even game defining moves from the recent 2021 Chess World Championship in Dubai.
- Veve is an app that specialises in digital collectables and has got some of the big brands on the platform. Including: Disney, Marvel, DC, Star Trek, James Bond, Back to the future and the collections keeps growing. They also include minted comics on the platform. Also worth mentioning that this service uses Gems which are 1:1 to USD. VEVE has announced own metaverse called Veveverse where users will be able to claim land to setup and share experiences. In November Disney had a big drop with the 'Golden moments' letting people claim NTFs of their iconic IP as seen below.
Other cool things brands are doing
- Coca Cola dropped a small collection on OpenSea
- Pepsi - Dropped free NFT's in a collection called The Mic Drop of profiles of Mic's in different forms.
- Budweiser dropped acollection on OpenSea. I like how they used the brand elements to make different profile style art.
- Takeaway 1 - Brands have a unique offering. They have a rich connection with their customers which means when it comes to NFT's brands might be able to build further brand affinity or even generate new revenue streams by giving away NFT's or selling them.
- Takeaway 2 - As Cryptocurrency and NFT's become easier to access the adoption of NFT's will become more mainstream. It will be up to brands how they want to show up on this space. If you represent a brand, type it into Opensea.io to see what comes up.
- Takeaway 3 - Scarcity is a technique to increase value. Keep that front of mind when releasing any NFT's or collections. 1:1 meaning only 1 NFT is available this as well as time can be used to drive urgency and desirability.
- Takeaway 4 - Keep the content authentic to the brand. What are the core brand values or associations and let the idea's come from that.
⭐ Bonus content ⭐
Marketplaces are important thing to keep an eye on in the NFT space. The big players like OpenSea and SuperRare are popular but in 2022 more brands will look to make their own:
- Reddit Users could buy custom avatar's. But still tbd what Reddit look to do in the future. Reddit NFT's here.
- Bytedance (who own's TikTok) is also rumoured to be investing in partner companies to create it's own solution.
- Coinbase (A large crypto investing app). This new app would let users hold their NFT's in the wallet on their phones.
- Ticketmaster mentioned earlier in the post to share NFL highlights in it's own market place.
- Fox Corp and the WWE as mentioned above in the post. By having their own marketplace they can have better control over fee's and ways of working.
- This section is talking about digital land in the metaverse. With particular platforms like The Sandbox mention above there is a level of scarcity of resources with a max of total land player can buy, rent, sell. Each plot of land if a NFT and there is only a curtain amount. This type supply and demand will increase value like other assets. As see below Adidas and Care Bears have built experiences in this metaverse. Apart from seeing the brand logo on the map the rich experiences build brand affinity.
- Another blockchain environment is decentraland.org which is metaverse that allows users to buy land to build experiences. These users can also import their purchased NFT's to show to inactive with and show others.