NFT Memberships for Brands
While non-fungible tokens, or NFTs, are becoming the standard for digital assets, their use cases extend far beyond that. The crypto primitives that make NFTs ideal for digital goods or services make them excellent tools for brandable memberships. In this article, we explore how you and your brand can use NFTs to launch token-gated memberships, unlock crypto-enabled recurring revenue, and provide existing customers with unique web3 experiences.
NFTs are well-suited to token-gated memberships
NFTs are scarce. As a brand, you determine how many NFTs you want to offer to your community. Your users purchase NFTs, or unique digital collectibles, from your brand.
NFTs are unique. While there are many token standards, NFTs leverage blockchain to ensure there's no chance for duplication or fraud regarding memberships.
NFTs are transferable. By default, NFTs can be traded freely on NFT marketplaces (OpenSea, Magic Eden, X2Y2). Transferable NFTs means you could sell or trade your membership in a secondary market if you wanted to! The exception here is non-transferable NFTs, also known as account-bound tokens, or ABTs, based on the ERC-4973 token standard.
NFTs are dynamically priced. Each membership token has an associated value and price determined by market forces, not some company setting arbitrary prices for its digital assets.
Membership NFTs are an excellent way for brands to give more value to their existing audience.
Membership NFTs are an excellent way for brands to give more value to their existing audience. By allowing users to create their own NFTs tied to a particular product or service, you can incentivize them to engage with your brand to unlock more rewards. This type of system not only drives engagement but also helps drive sales by reducing the friction between users and buying products/services they want.
Token-based memberships unlock new business models
Token-based memberships enable brands to unlock crypto-based recurring revenue and monetize their community in a way that hasn't been possible before.
Web3 brands can offer value based on crypto tokens (fungible tokens or NFTs) and create new programs that allow loyalty programs to be used as currency or converted into other crypto tokens.
Many different reasons a token will be helpful within your community. Let's say you have an online community where users can create content and then earn tokens by sharing their work with others. If you launch an NFT membership, token holders could access premium services within the platform, such as private forums or live chats with team members. These types of systems don't need money at all.
How can brands launch their token-based memberships?
Let's say you or your brand want to offer token-based memberships. Launching token-based membership starts with selecting the token standard. Acme can accomplish this using either fungible tokens (ERC20), NFTs (ERC721, ERC1155), or rental NFTs (ERC4907). We will explore these tokens below.
Non-fungible tokens (ERC-721, ERC-1155)
NFTs are similar to fungible tokens in that these tokens can be transferred from person to person and exchanged for goods or services. Two of the most common NFT standards include ERC-721 and ERC-1155 However, unlike fungible tokens, NFTs have unique attributes—like a unique name or ID number—that makes them unique from one another.
If you are looking for a way to give your members different rewards based on their level of participation within your community or loyalty program, then NFTs may be a good fit for your brand.
Rental NFTs (ERC-4907)
Rental NFTs based on the ERC-4907 token standard allows users to rent their digital assets for an agreed-upon amount of time.
Alternatives to NFT memberships
Brands can also launch their fungible tokens based on the ERC-20 token standard. These brandable tokens can be transferred from one person to another using decentralized exchanges (Uniswap, Curve Finance, Balancer). They're great for membership programs that involve buying products or services. If you or your brand are interested in rewarding your members with something more than a digital product or service, they may want to consider another type of token.
At Phoenix, we're excited to see more brands embracing token-gated memberships. NFT memberships allow brands to offer their customers exclusive access to unique benefits, experiences, or events.
If you or your brand are interested in creating unique NFT-driven membership experiences for your community, reach out to our team.