As the cryptocurrency market grapples with fresh obstacles and a downturn, numerous individuals are seeking alternative avenues to uncover insights into the future of decentralization and blockchain technology.
The surge in sales of non-fungible tokens (NFTs), specifically in the form of profile picture (PFP) collections, captivated attention in 2023. These vibrant JPEGs were embraced by many as a means to express their digital identities, leading to the formation of communities as Web3, the next phase of the internet, began taking shape.
However, as NFT trading gradually decelerated, the discourse shifted from the immediate value of NFTs and chasing hype cycles to the long-term utility of retaining these tokens for extended periods.
Numerous brands have already begun exploring the innovative applications of NFTs and how these digital assets can serve purposes beyond fleeting investment opportunities. Companies are now investigating the use of NFTs to foster stronger connections between brands, creators, and consumers by linking rewards to long-term ownership.
For instance, GQ introduced an NFT-linked magazine subscription in February, while sports outlet Sports Illustrated launched an NFT ticketing program in May. In the same vein, Starbucks unveiled its Odyssey Web3 loyalty program in beta in October, incentivizing its most dedicated coffee enthusiasts through digital engagement.
At the forefront of these prominent mainstream brands is the objective of attracting new customers seeking more immersive brand experiences, all while upholding integrity and avoiding convoluted onboarding processes. Some industry thought leaders believe that loyalty programs, memberships, and ticketing opportunities are the most apparent applications for NFTs and pave the way for welcoming the largest number of new users into Web3.
Enhancing the loyalty economy through NFTs
Loyalty programs, exemplified by point-based systems like Delta Airlines’ Skymiles or beauty retailer Sephora’s Beauty Insider program, reward customers for their purchases. According to a survey conducted by LendingTree in July 2022, at least 80% of Americans are members of at least one loyalty program. Consumers often turn to these programs for improved discounts, accelerated progress towards obtaining free items, and exclusive offers. NFT loyalty programs offer users the chance to forge deeper connections with their beloved brands, while brands themselves can more effectively engage with and understand their audiences.
NFTs have seamlessly integrated into these systems due to their capacity to foster a community centered around a brand, as exemplified by blue-chip collections like Bored Ape Yacht Club (BAYC), Moonbirds, or Goblintown. Furthermore, they are reshaping the incentive-driven and transactional nature of Web2 loyalty programs by introducing digital identity and ownership as novel components, made possible through blockchain technology.
By integrating Web3 into the tech stack, loyalty, which is traditionally associated with retention marketing, can evolve beyond its established boundaries. Web3’s added value lies in granting individuals a greater sense of ownership over their loyalty.
When developing new blockchain loyalty programs, it is crucial to strike a delicate balance between catering to individuals already deeply immersed in Web3 (often referred to as Web3-natives) and not alienating potential new users.
For companies aiming to incorporate Web3 loyalty benefits into their existing products and services, onboarding often proves to be a challenge. This issue takes center stage for Blackbird, a restaurant loyalty program builder that offers perks to frequent diners.
Blackbird’s NFT loyalty program operates on a simple premise: when a diner dines at a restaurant supported by Blackbird, they immediately receive an NFT minted into a unique backend wallet, serving as their “proof of dining.” With each subsequent visit to that restaurant, the NFT transforms into a new token with additional rarity traits.
The concept of non-fungible tickets has emerged as a crucial topic in the wake of the chaotic ticket sales for Taylor Swift’s Eras Tour. The incident shed light on the inherent flaws plaguing the mainstream ticketing industry, including malfunctioning platforms, duplicate tickets, and exorbitant resale prices. These challenges have created significant obstacles for devoted fans, often leaving them disheartened and ticketless.
Fortunately, NFT ticketing presents a promising solution to many of the issues currently afflicting the events industry. By employing token-gated ticketing, artists gain enhanced control over how their tickets reach their fans. Any artist who mints their own NFTs can explore token-gated sales, facilitating the matching of token holders with premier seats, exclusive pre-show experiences, or even granting early access to tickets for upcoming tours. However, for NFT ticketing to truly flourish and expand, it necessitates the active participation of communities in Web3—a concept that is gradually gaining traction but still seeks widespread adoption.
Although NFTs may not be indispensable for all types of events, they undeniably offer fans a broader range of options that alleviate some of the pain points associated with ticket purchase and resale. NFT tickets bring certain advantages to their holders, including on-chain verification of ownership, attendance rewards, artist royalties for secondary resale, and potential benefits from event sponsors.
While Web3 ticketing is still in its early developmental phase, its future holds great promise. To gain attention before the technology becomes mainstream, it is essential to commence with smaller-scale events. Remarkably, influential entities have already entered the Web3 ticketing arena. For instance, in May, Sports Illustrated, a prominent athletics magazine, collaborated with blockchain-software company ConsenSys to launch SI Box Office—a self-service event management and blockchain ticketing platform exclusively dealing with NFT tickets. Notably, all these tickets are minted on the Ethereum sidechain Polygon.
Rather than relying on outdated barcode infrastructures, we have embraced NFT ticketing as the pathway to the future of live events. By avoiding support for legacy systems, we have seized the opportunity to construct an entirely on-chain solution. As we eagerly anticipate the arrival of a global, iconic brand in the Web3 community, we envision the creation of something truly beneficial for everyone involved.
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