NFTs have gained a lot of popularity. They are particularly popular with young customer groups and are used as digital representations of value in both the real and virtual worlds, such as representing assets on the blockchain. But what exactly are NFTs and how can businesses benefit from them?
Author: Daniel Hilfer
See German version here.
What are NFTs?
NFTs (Non-Fungible Tokens) are digital tokens created on a blockchain. Unlike cryptocurrencies like Bitcoin, which are fungible, meaning they are interchangeable, NFTs are unique and non-exchangeable. Each NFT represents a unique digital asset, such as an image, video, piece of music, or other digital artwork. NFTs are typically secured by smart contracts executed on the blockchain. This ensures that ownership of the NFT is unique and cannot be duplicated or tampered with.
Opportunities for businesses
As a business, you can use NFTs to attract new customers or incentivize and retain your existing customers. Here are some opportunities that are already being successfully implemented with NFTs, regardless of industry:
Branding: Companies can use NFTs to strengthen their brand. By creating unique NFTs with their logo or a specific design, they can capture the interest of collectors and increase awareness.
Customer loyalty: Use NFTs as rewards to incentivize and retain customers. You can offer NFTs as part of a loyalty program to encourage customers to shop with you or engage in other interactions with your business.
Exclusivity: Award NFTs that give owners access to exclusive events and unique experiences. As a result, your customers will build a relationship with your company and share their experiences on social media, among other places.
Incentivize: Use NFTs to encourage customers to buy your products and services or inspire them to recommend your products and services to others. Customers can become brand ambassadors and, in turn, share in your success.
Interactions: Use NFTs to encourage interactions with customers. You can conduct polls or surveys where owners of specific NFTs have a voice or even participate in decisions such as product design.
Digital Rights Management: NFTs can also be used to manage digital rights. For example, you can sell your products/services as NFTs, giving you control over who can use the works and what terms of use apply.
Examples
Some companies have already started using NFTs to incentivize and engage customers. Examples:
- 4BRO offers customers a QR code on the packaging when they purchase their iced tea at the point-of-sale, which, when redeemed, grants customers BRO Points (proprietary currency), which in turn are required to purchase 4BRO NFTs. 4BRO’s NFTs give these customers exclusive pre-launch access to new products before anyone else. NFT holders also receive discounts on 4Bro products in their own web store. In addition, 4BRO offers the opportunity to have a say in important company decisions in Discord channels exclusive to NFT holders and quarterly rewards in the form of BRO Points.
- The NBA partnered with Dapper Labs to create an NBA Top Shot. On this platform, fans can buy and trade digital collectibles like video clips of basketball games.
- Game developer Ubisoft used NFTs to reward participation in a special event that gave players access to exclusive content and activities.
BaFin’s assessment of NFTs
BaFin considers NFTs to be cryptographic tokens based on DLT that are not interchangeable. When examining NFTs regarding regulatory provisions, BaFin takes the same approach as for fungible tokens. NFTs have not yet been classified as securities in the regulatory sense. An NFT is classified as a security if it is transferable and tradable on the financial market and embodies rights like securities. To date, BaFin is not aware of any NFTs that must be classified as securities. This is due, on the one hand, to the fact that tokens have so far not embodied any rights like securities and, on the other hand, NFTs are often individually designed, which precludes standardization and thus tradability within the meaning of the regulatory concept of securities.
Conclusion
NFTs offer companies an opportunity to attract and retain customers. By using NFTs, companies can build a loyal fan base and turn customers into ambassadors for their brand. Young target groups can be addressed using NFTs. However, there is often a lack of professional and technical know-how to implement such projects.
As a management consultancy for digital assets, we can help you discover how NFTs can be used for your company. We offer workshops in which we explore possible business potentials together. Based on the workshop results and your goal definition, we can implement the project according to your individual needs. Thanks to our expertise and our strong network, we can implement projects for you depending on your requirements, accessing suitable partners as needed.
Feel free to contact us to learn more about how we can help you benefit from NFTs.
About intas.tech
intas.tech is a blockchain consultancy founded by the Frankfurt School and Plutoneo Consulting and specifically tailored to financial organizations’ needs. intas.tech focuses on the integration and handling of digital assets and the strategic evaluation of blockchain deployment opportunities and their implementation.
Daniel Hilfer is a Chief Technology Officer at intas.tech. His extensive professional & IT experience is based on more than 10 years of banking and consulting experience in the financial services sector with a focus on capital markets. You can contact him via email or LinkedIn.
