Cryptocurrencies like Bitcoin and Ethereum are rising in popularity among the public, especially the digital natives who are the younger Gen Z audiences. This led to the expansion and offering of different kinds of products mostly geared to attract the younger market – from new crypto coins and tokens to non-fungible tokens (NFTs) and other blockchain projects.
As more people get involved in trading and investing in these digital assets, younger kids can be faster in adapting the technology and diving head first into trading crypto and NFTs. With as easy as a click on their phones, crypto traders get younger by the day, even to as early as pre-teens trying to get around age restrictions in wallets, apps and exchanges.
Web3 can be an excellent way for a brand to get in front of a younger audience, but it does come with a higher level of responsibility. This means that new, existing and interested companies in Web3 need to be mindful and careful about their crypto and Web3 offerings, and its implications and potential risks to kids.
The Tragic Fairytale of Robinhood
Some companies have made it easy for the cell phone generation to start investing. In particular, Robinhood does not charge commissions or any trading fees and enables users to trade in just one click, as the company aims to make trading easily accessible to everyone.
Out of all the apps where you can trade cryptocurrencies, only Robinhood gamified trading and associated it with instant and unearned rewards. This, in turn, attracted younger users to trade with little knowledge – exposing them to riskier trades – and even using their friends to get around age restrictions of the app. Robinhood has a slick UI that drops confetti every time the user makes a trade, peppered notifications with emojis, and gives new members a free share of stock by scratching off images that look like lottery tickets. It’s one thing to make trading easier, but it is another to reel in users through psychological tricks that expose and attract them to riskier trades.
This is what happened to Alex Kearns
, a 20-year old student who was trading options using Robinhood. He took his own life after he saw a negative balance of over $730,000 in his account, thinking that he had blown up his entire future. His final note filled with anger toward Robinhood, says that he had no clue what he was doing.
His tragic and untimely death will serve as a lesson to companies in the Web3 space. Companies and organizations need to be responsible in how they craft their blockchain-based projects and how they market it to the general audience, being mindful of how this can affect even kids that may see it and interact with it.
We all have a part to make Web3 and blockchain a safer place for everyone. Here are some of the key things to keep in mind to get you started in marketing Web3 responsibly to younger users.
NFTs should not be marketed as an investment vehicle
Blockchain products have already evolved since its early phases. Bitcoin and Ethereum became breeding grounds for new tokens to rise, providing value through NFTs, smart contracts, metaverse and many others, and encouraged creations of innovative coins and blockchains.
Crypto and NFTs might be regarded as an investment vehicle by some, and prospecting has had a major effect on the inflated value of many blockchain assets, but this is not their main value. NFTs should not be marketed as an investment as it almost always doesn’t promise a greater return in the buyers’ money. Other than its inherent scarcity value, NFTs give value often through social proof, utility and benefits. The focus should not be on the monetary returns once its resold, rather, on the value that you get from owning the NFTs.
NFTs called “social tokens” are valuable as it is created, owned, sold and endorsed by top artists, celebrities and wealthy people. Social tokens are like the luxury goods of NFTs – people care about the scarcity and the affluent persons who own them.
Utility NFTs, on the other hand, can present value in any form possible, depending on its issuer. It can be used as an early access for a limited edition product, a pass or ticket for an event, an avatar to play a game, or can give benefits such as free products or services for life.
NFTs are flexible and can hold more value than one can perceive. This is a good tool for companies to show appreciation for customers and present real world value that is exclusive for their patrons.
Using and marketing NFTs as a tool to hold real world value will improve how the technology is used, and can deflect bad agents from luring the public to fall victim to investment scams. Companies also need to make sure to remind their audience to only put in money that they can afford to lose.
Crypto and NFTs are not ‘Bored Ape’
The era of fast money in crypto and NFTs is nearing its end since the recent downtrend in crypto markets. In the beginning, many people were attracted by the fast gains in crypto, as well as the NFTs that sold up to millions of dollars from NFT makers Bored Ape Yacht Club, Beeple and CryptoPunks.
But with the current market slowdown, people who bought on the hype were finding themselves losing money. For example, Tom Brady bought a Bored Ape NFT for $430,000 in April, and he’s lost at least $194,000 since then.
Bored Ape and social tokens are only a part of the hundreds of thousands of NFTs at present. Most of the NFTs being created recently have a lot more value other than social proof. It’s not all glitz and glamor, but more about the utility and benefits. Going back to the Tom Brady example, the goal is not to “invest” by buying and holding, and hoping for higher returns. The goal is to hold an NFT because it unlocks value that is important to the customer – but one has the option to sell it whenever they like.
Web3 companies need to understand and treat crypto and NFTs as tools that can make a difference and innovate the way we do things in different sectors – and to also use it responsibly. Establishments have adopted cryptocurrencies as a mode of payment. Decentralized Finance (DeFi) firms are coming up with blockchain-based infrastructure, products and services to provide banking solutions that you cannot get from traditional banking. The luxury goods segment and other similar sectors are already using NFTs for authentication of their products. Some companies use NFTs for intellectual property, and some are already integrating it to their supply chain.
As first adopters of the technology, Web3 companies have the responsibility to communicate this real world value to their audience, that the tech is not just a crazy wild investment. Companies and organizations embracing blockchain and Web3 need to work to make the space safer for the public, especially for younger audiences. After all, a safer Web3 environment encourages growth in audiences for blockchain projects.
Gigster helps and guides major companies and organizations in their Web3 journey and projects. Our managed pool of talents skilled in Web3 supports companies to get set up on their blockchain projects, as well as advising and educating their teams on how the blockchain technology operates to make for a safe and successful Web3 project launch. Reach out to Gigster to get started on your Web3 journey today.