Over the past year or so, a ton of internet jargon has landed on our doorstep. Blockchain, crypto, metaverse, and – of course – NFTs have grown from the margins of the internet to become mainstays of the marketing press and mainstream media.
While many of these terms seem alienating (and more than a small niche), there are some extremely tangible learnings and implications for brands to remember.
This is why I want to talk about NFTs: in particular, the community that has built up around a collection of NFTs called the Bored Ape Yacht Club.
But before we start: WTF is an NFT, right?
As I’m sure you already know, NFT stands for ‘non-fungible token’.
“Non-fungible” is an overly complicated legal term that essentially means “unique”.
And a “token” is any digital asset that exists on the blockchain (to put it simply, the blockchain is a digitized, immutable ledger, and a token is an entry in that ledger).
You can create any piece of content you own – an audio file, an image, a video, a meme – a token on the blockchain (a process known as “tokenization”) and if you do, you can make it clear that there is only one of these things.
It’s a TVN. The fact that only one of these things exists on the Blockchain means that if you buy an NFT from here, you know the creator or owner was the person who put it there.
Despite the fact that a Van Gogh painting can be found countless times on Google Image Search or offline replicas, the original will still be valuable, right? Likewise, when Jack Dorsey sold the very first Tweet, the person who bought it knew they were getting the Tweet, not a screenshot of the tweet.
Rarity is therefore part of what makes DFTs valuable. But that’s not the only factor. Value is built into many NFTs as well, as buying one – or even just knowing that it might be of value – is the ultimate status symbol among some digital communities.
Much like the status symbols of old – buying a Rolex, buying a Porsche – buying an NFT is an act of conspicuous consumption. But this is the New new money. In digital economies, who gets rich is defined by what you know, not who you know, and investments are not just in digital assets, but in the communities around them.
Which brings me to the Bored Ape Yacht Club.
Bored Ape Yacht Club is a collection of 10,000 illustrations of bored-looking (non-human) monkeys, which have been tokenized on the blockchain. Created by a collective of digital artists operating under the title Yuga Labs, each of the 10,000 Bored Monkeys is unique, generated from over 170 possible traits including expressions, headgear, clothing, and more.
Bored Ape Yacht Club recently rose to fame because several celebrities, including basketball player Stephen Curry, purchased monkeys from the collection (Curry bought his for $ 180,000). Later, a lot of 107 Bored Apes sold at Sotheby’s for $ 24.4 million.
Curry’s Twitter profile photo is currently set to his NFT. But the value of Bored Ape Yacht Club is not dictated by him or his fellow famous investors. It’s made worse by a powerful community of insiders – not all of whom necessarily can afford to deposit thousands on an NFT.
On Discord, this lively community of over 40,000 people enjoys direct access to the founders of BAYC and exclusive derivative releases. As their numbers increase, so does the value of monkeys.
Yes, native digital assets are becoming new identity markers for the extremely online. But beyond that, they also form the basis for a new generation of members, community and exclusivity: all of this is especially desirable in a digital landscape where everyone has access to everything.
Bored Ape Yacht Club is an international community of digitally savvy internet users with excellent aesthetic taste and a common interest in technology. In fact, owning an Ape NFT is a bit like buying a premium membership.
Against this backdrop, there are a ton of implications for brands that point to opportunities around NFTs that go beyond just generating brand assets that no one really wants to buy:
1. People feel more connected to brands, characters and universes when they have skin in the game. For brands that have the cachet to invite this, they must evolve their audience into investors.
Because it’s the future of customer culture. This is why FC Barcelona won 1.2 million euros in just two hours thanks to “fan tokens”: each cost 2 € in a 48 hour flash sale, and were sold to fans in 106 countries. different in exchange for exclusive communications, access to VIP competitions. and the ability to vote on selected team decisions.
2. For brands selling rare products, there is an opportunity to extend their life by building a community or members around them. BAYC is proof that you don’t have to have an NFT to be part of the community.
Nike invested in the tech-savvy sneakerhead community early on with CryptoKicks: When people buy a pair of physical CryptoKicks shoes, they also buy the NFT representative, essentially giving the buyer physical and digital ownership of their purchase. Owners will then also enjoy benefits for fans of the brand in the form of exclusive and early access to subsequent CryptoKicks collections. But the larger sneakerhead community can still follow and hold on to it.
3. Collaborate with digital artists, social-driven communities and franchises to build referrals online. Someone who might not spend $ 180,000 on an NFT, can still lose $ 500 on a collaboration they do with Adidas, after all.
Asics does this with its continuing collection of “Sunrise Red” NFTs: All NFTs are created in collaboration with young digital artists, and all profits are reinvested in this program, ultimately funding the rise of the next generation of talent.
Lore Oxford is Global Head of Cultural Knowledge at We Are Social