NFT Token gating: How can brands leverage NFTs to build new brand experiences?
December 12, 2022
By giving professionals like musicians, designers, and other creators a way to manage how their work is distributed, non-fungible tokens (NFTs) have completely revolutionized the creative world. However, it turns out that NFTs can be beneficial for much more than just being a work of art or a PFP. Moreover, some of these applications of NFTs are superior to certain web2 models.
In our recent piece, we discussed the several advantages of adopting NFTs as loyalty cards. In this post, we'll look at a model known as NFT token gating and how it takes NFT applications to the next level.
NFTs have, as we all know, provided a fundamentally new paradigm for creating and sharing digital material. Token gating is a method of increasing the value of an NFT by enhancing its utility. When you combine the two, your tokens become a commodity with lifelong royalties and a wide range of applications.
What is NFT token gating?
Token gating is a method of using blockchain technology to grant access to exclusive content, services, or products. To put it simply, token gating is the process of providing token holders with exclusive access to content or services when they own a specific NFT in their crypto wallet.
Token gating allows brands to employ NFTs as a powerful utility tool for offering a wide variety of brand experiences. NFT holders can use them to get access to exclusive communities, memberships, content, physical products, or whatever else a brand wants to offer. Through token gating, we can transform an NFT into a multi-purpose tool that can be used as a ticket, access card, voucher, membership, or perk.
Here's an example: Suppose your NFT collection wants to reward token holders with exclusive t-shirts. You've spread the information across your community platforms and social media, with a link to a gated website that will validate the NFT in the visitors' wallets.
Once properly validated, NFT holders will be redirected to your website, where they can enter their information and place their order. This is just one way that brands can use NFT token gating to give token holders sophisticated and personalized experiences.
Benefits of NFT token gating
Memberships have traditionally been granted to any individual who is willing to pay the fees. While this gives a second source of revenue, the exclusivity of this membership diminishes over time.
However, NFTs often have a limited quantity of tokens issued into the market. This preserves a perception of exclusivity for all members, eventually driving up secondary market prices.
Blockchain technology enables brands to identify and validate ownership histories. Furthermore, because NFTs are stored in digital wallets, token holders are unlikely to lose their digital tokens.
One of the primary advantages of token gating and NFTs in general is that it gives you complete control over your distribution, as there are less middleman costs associated with creating and selling NFTs. Thus major chunks of earnings go directly into the hands of NFT creators.
There is no method to fabricate token ownership because NFT ownership is validated through the blockchain. As a result, token holders are the only people who can benefit from an NFT.
Ease of access
Because their verified credentials are linked to the token-gated website or app, users have easy access to content at all times.
A new monetization opportunity for brands and creators
Royalties can be applied to NFTs so the OG creator can receive a share from all future sales.
5 ways brands and content creators can utilize NFT token gating
The applications of token-gating are only limited by one's imagination. However, as a starting point, brands and content creators can explore these opportunities.
1. Token gated community
People that enjoy particular brands or creators are always on the lookout for like-minded people with whom they can share their interests and experiences. NFTs enable users to connect with other individuals in their exclusive community. People can come together to collaborate or watch exclusive content.
An NFT gives the owner access to a private community and may provide members with loyalty benefits such as items or discounts. Furthermore, individuals can join these groups with ease and trust that the people they are speaking with are genuine.
This gives NFT holders the opportunity to interact with members of the community who share their interests. It's similar to discovering your tribe. These token holders gain exclusive access to the community as an added perk.
2. Token gated commerce
Through token gated commerce, token holders of your NFT collection can link their wallets to your website and gain access to special brand experiences like limited-edition merchandise, behind-the-scenes tours, privileged benefits, etc.
You can also use IRL tokengating in actual stores to restrict access and purchases to specific NFT token holders.
Token gating can also be used to substitute existing coupons and promotional codes. The issue with discount codes and free merchandise links is that they are easily shared online and end up in the hands of the wrong people, leading loyal customers to miss out.
Token gating allows artists and brands to provide gated access to specific products on an e-commerce website or to provide a special discount to those who own a specific NFT in their crypto wallet.
Learn how to use Shopify to enable token gated commerce: Shopify NFTs: How To Setup A Shopify NFT Store
3. NFT loyalty cards
Token gated NFTs can be an ideal application for web3 loyalty programs. Current loyalty programs can be stale, and consumers don’t care about them, or forget they’ve signed up. non-fungible tokens can be used to verify ownership of a product, incentivize purchases, restrict access to only members, gamify brand interactions, and create a unique identity for the customer within the brand's community.
You could just as easily use NFTs as a loyalty card on a product page. Simply connect your wallet, and the applicable card will be automatically activated at checkout.
4. Token gated events
Brands frequently host big events that require either physical or digital tickets. Typically, a ticket is purchased from a website, and an app is downloaded to be scanned at the entrance. This ticket is the key to gaining entry to that place and experiencing that thing and NFTs can be used to get into any of these places or online events, like a conference or online meetup.
We've already seen projects like VeeFriends, Azuki, and BAYC organize highly successful events for their token holders. These events are a good way for the digital community to get together, and participants are rewarded with things like merchandise, POAP NFTs, guest appearances, and key industry information.
5. Tokengated memberships
NFTs have the potential to take conventional membership models to the next level. NFT-based membership programs, like regular membership programs, can have various shapes. Several sports clubs, public gyms, eateries, and clothing manufacturers have already launched NFT memberships to reward their most loyal clients.
For example, NFT ownership can grant users membership to an elite online community such as Bored Ape Yacht Club, voting rights in a DAO such as LinksDAO, or access to an exclusive dining club and gourmet experiences such as Gary Vee's Flyfish Club.
Furthermore, because they utilise blockchain technologies, it is difficult to forge or duplicate membership NFTs. This assists brands in preventing fraud. It also helps people because they no longer have to worry about losing their physical cards or forgetting their login details.
Unlock your brand's full potential through token gating
Token gating supercharges an NFT, giving ownership additional meaning. You may ensure that only the token holders of a video NFT or music NFT will have access to the asset in addition to owning them. It also allows brands and content creators to interact with their audiences in new and creative ways, embracing the concept of digital ownership and incentivizing digital memberships and engagement while implementing web3 principles.
How to pivot your brand into the web3 space?
Today, we see a large number of firms, both web3 and traditional, tokenizing their online storefronts, offering NFT-based loyalty cards, special access to communities, and much more. But this is merely the tip of the iceberg in terms of what's attainable.
If you are considering adopting Web3-based NFT token gating, the best approach to proceed is to assess which of the important applications outlined above could apply to your brand and learn from significant players to make a better and more informed approach.
Alternatively, if you are seeking a web3-ready marketing agency, contact us today. Our skilled web3 marketers can assist you in developing the correct web3 business and marketing models for your brand, introducing these models to your audience, explaining why they are beneficial, and building your community on Discord or any other platform.