The ongoing crypto downturn may have injected an additional dose of skepticism among the cynical members of the general public regarding blockchain, crypto, and NFTs. However, the same cannot be said concerning entertainment, sports, and cultural organizations. Surprisingly, many of the world’s most recognizable brands are busy experimenting with how adopting NFTs can complement their overall missions and business models.
As large companies increase their efforts to enhance brand optics, there have been some indisputably captivating NFT acquisitions and launches among leading corporate names.
From Coca-Cola to Pizza Hut, Adidas, Visa, Pringles, Twitter, Instagram, etc., firms are competing to incorporate NFTs into their brands. While increased corporate adoption exponentially increases the value and utility of NFTs, it also enhances the reality that NFTs are soon taking on a life of their own and could quickly become a significant part of our lives. However, since most NFT projects are designed to provide ownership of creative works, confusion still exists on what owning NFTs on a blockchain means.
This article explores the role large companies can play in facilitating NFT adoption and copyright enforcement, which can get complicated as consumers gravitate towards the world of Web3.
While some critics still consider NFTs a simple fad, big brands have taken note of the millions of dollars consumers are willing to pay to become a part of the digital future. Several leading brands are already at the forefront of including the NFT concept in their product designs and marketing. Some of the companies that have pioneered NFT adoption include:
Taco Bell: The fast-food company created digital taco-themed collectibles in March 2021 featuring five NFTs sold in batches of five. While the initial NFTs were sold at $1.79, the price later reached nearly $200,000, with the firm poised to receive a portion of the amount in all future sales.
Right now, it’s clear that NFTs will soon be intricately entwined with digital collectibles as many brands enter the NFT world to launch their collections. While those efforts are a good starting point, they’re not the strategy that will bring home the bread and butter, the same way buying a brand name in the dot-com era isn’t sufficient. Some practical proposals include:
While the immediate NFT mindset gravitates around digital collectibles, large brands can work to create the correct balance between exclusivity and the availability of their NFTs. Rarity helps to sustain consumer interest since an overabundance could communicate low value.
Additionally, companies can make NFTs more engaging and collaborative by leveraging their programmability or integrating community features into their collections. The latter has helped sustain the interest levels and value surrounding the Bored Ape Yacht Club (BAYC).
Instead of trying to thrive in the business of creating and selling NFTs, companies could enhance NFT adoption by integrating their NFTs with their brand identity. An excellent example for companies that manufacture physical products would be giving away physical products tied to a digital NFT collectible. Rather than lament the consumerization of the emerging Web3 technology, Instagram has announced plans to strengthen its NFT connection with its services in small ways.
The social media app plans to support popular Web3 crypto wallets like Metamask so users can plug in their wallets to showcase and prove ownership of their NFTs. The image-sharing app has proposed adding NFT filters that enable creators and collectors to share their content in stories and make it possible for NFTs to become virtual, more accurate, and tangible.
And just like Twitter did with their hexagonal NFT profile pictures, Instagram won’t charge users to post and share NFTs. With over one billion active users, the decision by Instagram could easily create a rush of the cultural visibility of NFTs and a possible post-to-earn model for content creators to promote and market their works of art.
Since the marriage between NFTs and businesses is a new kid on the block, the only way brands can know what works and what doesn’t is through experimentation to separate the chaff from the wheat. Similar to the transition from Web1 to Web2, wading through the waters of the emerging Web3 may appear a daunting task initially, but orienting themselves with metrics that better illuminate a future world where NFTs can anchor existing products and experiences will help drive their adoption.
As large firms look for ways to promote their brands within the still murky waters of NFTs, issues of counterfeit NFTs have begun to emerge. A case in mind is Nike vs. StockX over the genuine owner of sneakers. As the industry struggles to deal with copyright infringement in an arena where there are no specific laws as far as NFTs are concerned, some tangible proposals that could help include:
Brands could create employment contracts explaining explicitly who between the company and NFT creator does what as far as the creation and sales of NFTs go. The contacts could also lay down the terms regarding ownership rights to NFTs and intellectual property.
Companies can consider exclusively using new platforms with AI-enabled tools that can flag counterfeit NFTs. Such platforms are armed with tools that can quickly analyze texts or images for the slightest resemblance and remove listings infringing on copyright before consumers can acquire them.
Last but not least, brands could communicate with their loyal NFT consumers and tell them where to obtain genuine NFTs. The restriction of distribution sites for NFTs to specific platforms could allow brands and artists to have a form of control until copyright laws finally catch up.
Today’s businesses exist in a world where NFTs are significantly impacting a world that’s digitally empowered by consumerism. The last two years have seen an incredible explosion of NFTs in a $35 billion market projected to reach $80 billion by 2025. Large brands like Adidas, Nike, Twitter, and Instagram have jumped headfirst into the world of digital goods.
The rapidly evolving NFT space may be filled with complexities. Still, creators, collectors and brands can pool their efforts to promote the introduction of guidance, regulation, and protections that will enable them to enjoy and profit from this emerging medium in the most unexpected ways.
While their efforts could take a little more time, there’s already overwhelming evidence that their growing pains will eventually deliver the jackpot.