NFTs are all around. You can’t have a CryptoKitty that isn’t a fan of NFTs without someone joining the bandwagon. NFTs are not only for celebrities and multi-billion dollar corporations. They can also be beneficial to small businesses.
Before we go into detail about how founders can use NFTs to their advantage, let’s first take a moment to get to know what they are.
What is an NFT, anyway?
A non-fungible token (NFT), is a digital asset that cannot be duplicated or replaced with a fake. It’s created on a blockchain and can always be traced back to the original creator. NFTs could include artwork, photos, music, and videos as well as memorabilia, contracts or coupons, certificates of authenticity, ID file, health records, and many other things.
NFTs had been little more than novelty before they gained traction with the 2017 launch of CryptoPunks (which are two distinct collections of digital trading cards) and CrypoKitties. Nonfugible.com estimates that NFT sales totaled $40 million in 2018. The annual adoption and sales of NFTs continued to increase through 2020. NFTs became mainstream by the end of 2020. This was due in large part to NFTs’ emergence on the NBA’s Top Shot NFT site. NFTs sold for upwards of $50 million in 2020. Digital assets are safe-stored in digital wallets, online and offline, once purchased.
NFT growth continues its rapid rise
According to Non-FungibleTokens Quarterly Report Q2 2021, Second Quarter 2021 Report on the website, this three-month window was a record-breaking period for the NFT sector. According to nonfungible.com, the total volume of trades exceeded $500 million in Q1 2021. The volume traded in Q2 rose by 40 percent to over $700 million.
In the second quarter, there was a record number of active wallets (more than 175,000), which indicates a strong rate of interest growth. In addition, both buyers and sellers are still growing. In particular, the number and percentage of buyers (over 38%) are rising faster than that of sellers (over 25%), which means NFTs have greater uptake than attrition.
NFTs are a great way to boost your local economy
This suggests that small businesses can take advantage of the NFT craze. Here are five different ways to use NFT technology to grow your company and retain customers.
1. Counterfeit-proof issuance of single-use promotional tool coupons, promotional discounts, and event tickets. BOGO deals are also possible. As uncopyable, tamperproof access/discount assets, QR codes are used in a wide range of applications.
2. You can create a loyalty program for customers by using a digital NFT card. After customers sign up, they can download it to their smartphones. Customers scan the loyalty NFT code every time they visit your company to earn loyalty points. Once you reach certain thresholds, rewards, discounts, and tokens can be pushed to the customer.
3. NFTs were used for charity support and cause-related marketing. They raised money to empower Afghan women following the recent exodus from the United States. Similar programs could be duplicated at local, state, and town levels to encourage geographic-affinity marketing and support local charities.
4. Secure fundraising for expansion. If your business plans to expand or open another location, an NFT campaign may be a cost-effective alternative to traditional bank loans. This is a fraud-proof Kickstarter campaign. It allows donors to track and monitor the money. Only milestones that are met, as determined by smart contracts at the campaign’s start, will be issued.
5. Sweepstakes/gamification type of promotions: These types are often very expensive and only make sense for large businesses such as McDonald’s franchises who participate in Monopoly game pieces, or Publishers Clearing House which still uses sweepstakes. NFTs offer small businesses the opportunity to engage in gamification marketing with a lot of creativity. To drive customer traffic to each location, a Chamber of Commerce can launch a digital NFT hunt that includes dozens of locally owned businesses. Your imagination is the only limit to your potential.