While the crypto and NFT markets have continued to fall over the past 12 months, many builders (myself included) are still building Web3 consumer products.
What we’re betting on is that much more value can be created by taking the mythical “mainstream” from outside the ecosystem than by targeting the solid pie of swords.
In terms of the ‘how’, I believe NFTs have the best chance of onboarding mainstream users into the chain (despite some bad press), simply because more people care about culture and social cues than financialization.
(F)nut today
NFTs have two indisputable niche consumer use cases, which I won’t dispute here – financial speculation (similar to stocks or memecoins) and superfan collectability (much like stamps, Beanie Babies, or high art).
However, looking at all the other NFT utility cases today, I argue that the mainstream is just getting a refreshed marketing twist on the same fundamental benefits that already existed in email-based apps. The benefit to effort ratio for the mainstream user is insufficient for NFTs to bridge the gap.
Transparency of your earnings and repayments, for example, is already readily available on credit card portals and branded apps; moreover, communities like TPG help compare the value of points or perks across the ecosystem. Cross-brand interoperability already works in Web2: Amex has point transfer partners; Delta Airlines has points partnerships with Starbucks, Lyft, Instacart and Ticketmaster.
As far as the NFT goes, Nike’s SWOOSH “Virtual Creations” NFTs are essentially non-transferable outside of the ecosystem, and can only be used with officially curated partners (such as EA SPORTS).
Redeeming rewards for NFTs from on-chain to IRL requires postal address and email account to track and send, as in the case of Starbucks Odyssey NFT benefit for free drinks (I got vouchers in the on e based Rewards app) or branded merchandise (sent to address) – even my ETH Denver NFT ticket was eventually sent to me as a QR code in an email.
I won’t argue about the value of loyalty programs and their gamification in general. However, I argue that we have so far discovered too few ’10x’ mainstream use cases for NFTs that not might as well with email.
Understanding the mass consumer
If you think of NFTs as a new business tool for creators, artists and brands, the value prop is pretty obvious.
As a creator, you can find or segment your 1,000 superfans, outrun the Web2 algorithms by “owning” a direct relationship with your audience, and experimenting with more sustainable monetization models than ads and brand deals. As a brand, you can collect zero-party data and target new demographics, even as internet cookies are discontinued.
This all sounds great, but the missing piece is the consideration of why the mainstream internet user (rather than the early adopter) would consistently show up to interact with these NFTs – as there is a greater onboarding effort required compared to any Web2- app anyway. or platform.
The inconvenient truth is that mainstream users won’t just adopt new products for philosophical or political reasons. Users inherently follow the path of least resistance, and the motivators that work best to take that extra step are financial incentives or a tenfold functional (or emotional) improvement over what already exists.
Ambiguous buzzwords like ownership, exclusivity, community, and above all – the mythical “utility” – feel misused in marketing communications and conferences, and too empty to win over the mass consumer.
The future is 10x
To accelerate major innovations, I think our minds need to shift in directions far beyond replicating the Web2 experience and end-user utility.
Collectibles uniquely address the problem of demonstrable scarcity of social signaling and self-expression in virtual communities driven by digital assets. Reddit’s collectible avatars already provide clear social utility in subreddits, acting as a connective tissue between users and creators.
Furthermore, as young generations spend more and more time online (for example, three hours a day on Roblox), the social value attributed to arguably scarce digital goods will only continue to grow, and it will cost just as much to boast about a original copy. Gucci bag online and offline.
When it comes to fan engagement, NFTs that are rewarded for micro-actions or micro-transactions on the web and collected in a dozen or so tiles on a “coffee card” dynamically unlocking a new experience are just a much more fun experience. and more trivial experience than tracking a dozen scattered emails or messages from your brand or creator. Combine it with permissionless multiplayer co-creation, and you tap into the emotional attachment and psychological ownership of consumers.
Finally, NFTs and on-chain records can also resolve the information asymmetry between audiences and creators across platforms, serving as a fandom cookie to distinguish superfans from casual followers and speculative bots. This could greatly improve the allocation of scarce unique assets such as tickets to events or face-to-face meetings and greetings to those who care most, with creators relying on the provable fandom history rather than the superficial algorithmic feed of social media .
The NFT markets are not immune to fundamental economic laws. The way forward is to balance this equation.
On the price side, we need to reposition digital collectibles for the mainstream and bring about smaller and more frequent interactions (similar to the TikTok gang phenomenon). To bring down the cost of the effort, we need to radically remove any Web3 native frictions (such as ‘deploying protocol’, ‘testnets’ or ‘transaction approvals’) so that anyone can start experimenting without a steep learning curve or PR- to assure.
On the utilities side, we must abandon the illusion that the email parity utilities and perks are good enough to make NFTs mainstream, and instead become obsessed with the mass user dilemma: “Is there a tenfold advantage to me if I make this effort? ”
Otherwise, as with the dreaded glut of work meetings, you’ll wish it could have just been an email.
Kuba Szewczyk is Senior Manager Strategy and Product within the ConsenSys NFT group. He is responsible for commercial and product strategy, as well as business and corporate development in the NFT space. Kuba has more than five years of top strategy consulting experience and has advised a number of Fortune 500 clients at Bain & Company. Kuba holds an MBA from Harvard Business School.