If you enter the search term ‘NFT WTF’ into your Google search browser, you’ll get 7m search results. Judging by the mass of authors who have noticed the lovely alliteration between these two acronyms, I’m going to assume that you have a decent understanding of what an NFT is, but you might still be wondering why you should care?
NFTs are a key ingredient to the impending Metaverse; one cannot exist without the other. Not only will they develop with Web 3.0, but NFTs are also powering the creator economy. When Web 1.0 and 2.0 were created, humanity had dreams of an internet that was truly neutral, democratised, and decentralised. It’s something that the internet’s creator Tim Berners-Lee is trying to solve with his Inrupt project. NFTs open a world of possibilities, with those are a world where creators can take back ownership of their creations.
NFTs and the Metaverse:
If the Metaverse is still something you’re struggling to wrap your head around, I’d highly recommend that you check out our Metaverse 101 blog as a starting point. In many ways, NFTs help the Metaverse work the way we envision and hope it will work – as a decentralised persistent environment. Through NFTs, users can own their avatar’s wearables, digital real-estate, items and take them with them wherever they go in the Metaverse. All this is possible because the token (a short form name for an NFT) can only be owned by one individual at a time, and that ownership is held through their electronic wallet which is separate from the Metaverse world they’re interacting with (i.e. Roblox, Fortnite, The Sandbox).
While this use of NFTs in the Metaverse is still in its infancy as we currently only have light Metaverses, we are seeing examples of brands taking this idea on board. Under Armour recently celebrated Stephen Curry’s all-time three-pointer record with a special addition NFT, the Genesis Curry Flow. The NFT was a sneaker based on the actual physical sneaker that Curry wore when he took his 2,974th shot and broke his record. Customers received a digital art piece of the sneakers created by Rumble Kong League but what made this activation really innovative was the owner also received a wearable pair that their avatar could wear across three different worlds (Gala Games, Decentraland and The Sandbox). You can start to see where this becomes really exciting; imagine if your digital self could take its assets into multiple different worlds without hassle. That’s the power of NFTs within the Metaverse.
NFTs and the Creator Economy:
One of the most exciting outcomes of NFTs is the opportunity for creators to take back control of their creations from social platforms. In the recent past, content creators have seen the profits from their creations swallowed up by the large social media platforms. Content creators would share their creations on a platform, the platform would sell ads to their followers and the return for the content creator was exposure to audiences on the platform. Unfortunately, that exposure doesn’t directly translate into tangible money.
With NFTs, ownership is baked into the actual token itself, and the content creator can sell their creations for a profit. An example of this paradigm shift can be seen in Beeple’s story. Beeple has been creating digital content for the past 13 years. Over those 13 years of work, he’s amassed a bit of a following. Recently, Beeple tokenised his work on Ethereum blockchain and his portfolio is now worth over $100m. This is all because, with the tokenisation of his work, he now is the owner of his work. He can sell and decide how many duplicates of his work can exist.
This brings me to one of the most impactful elements of NFTs and its impact on the creator economy, scarcity. Because content creators now have complete ownership over their creations, they can also determine the scarcity surrounding their creations. While it is true that every NFT is fundamentally unique – there can be duplicates that are each slightly different to maintain authenticity. Ethereum shared a great out of sector example to help us understand NFT duplication and scarcity. Say you’re an event organiser selling tickets to your event. You can decide how many tickets to sell and therefore control the scarcity of admission to the event. Each ticket provides the owner with a seat at the event and the seats are fundamentally, all the same, each seat, however, is in a slightly different place making each ticket and the reward of that ticket unique.
Why should you care?
Web 3.0 or the Metaverse is not here yet… but it is fast approaching! Cathy Hackl, the godmother of the Metaverse and the Chief Metaverse Officer for the Futures Intelligence Group says that every large company will need a long-term Metaverse strategy, not just dabble in the Metaverse with a one-off activation. Early adopters of the Metaverse, and indeed NFTs will benefit greatly from jumping into the water rather than dipping their toes. So, it’s not a matter of why you should care now – inevitably you will have to care because your consumers will be demanding Metaverse experiences and NFTs from your brand.
For those who have read this and are feeling waves of anxiety about this unknown but fast approaching new world, it may be time to shed your fears and let Aurora come alongside to help you become one of those early adopters. We offer a full day, tailored immersive workshop to help your brand wrap its head around the Metaverse. If you’re past that and ready to make the jump, we also offer Metaverse sprints to help you and your team set your objective and vision, determine your customers and competitors and define new Metaverse channels which you can integrate into your marketing strategy. Learn more here.