A non-fungible token is a unique and non-interchangeable unit of data stored on a digital ledger or blockchain. NFTs can be associated with easily reproducible, digital items such as images and videos – but can also be linked to physical goods. NFTs use blockchain technology to give the item public proof of ownership.

The item itself is not the NFT.  The NFT is a token on the blockchain that works like a one-of-a-kind certificate of authenticity.

What is the blockchain and why does it matter to me?

The blockchain is a public record or ledger that is copied across many computers across the globe.  This decentralization feature makes the blockchain incredibly secure because there is no single point of failure.

You may have heard of some of these blockchains –Ethereum, Solana, and even Bitcoin will soon support NFTs.

This is important for owners of any unique item because we now have a neutral, public, and tamper-proof system for confirming rightful ownership and origin.

But there’s so much more.

Let’s take a quick trip back to the early ’90s.  Think about what the internet was like at that point and try to imagine something like Amazon or modern social media.  That’s where we are with this technological revolution, also known as Web3.  The possibilities are endless, and adoption is happening fast.  There will be an incredible amount of innovation being built on this technology, but there are already some amazing uses that brands need to take advantage of now.

Ownership

The provenance of an item is no longer disputable.  Real-world objects linked to NFTs offer a way to track the lifecycle and journey of the item and verify its authenticity. Louis Vuitton is experimenting with NFTs to solve this problem, along with other brands within the LVMH conglomerate and diamond specialist De Beers.

Experiences and Rewards

Special offers can be “airdropped” into NFTs at will.  Brands can invite certain clients to events through their NFTs or offer perks.  This gives another layer of value to the NFT and the item that the NFT represents.

 

Brand Loyalty

People are living more and more in very specific online communities.  Issuing NFTs are a way to grow and nurture a brand’s community.  NFTs make fans culturally and economically invested in a brand.  Your success is aligned with their success.

What does this look like in the real world?

 A guitar brand can create an NFT that is associated with each guitar.  The guitar maker “airdrops” special offers to the NFT over time.  When that guitar is sold on the secondhand market, the buyer can see that the seller is the rightful owner and that the guitar is authentic.  When the seller transfers the NFT to the buyer, a small fee can be processed automatically and sent back to the manufacturer.

All interfacing with the NFT is done through the guitar company’s website.  NFT owners would create a login to access and trade their NFTs on the website, but the website would be interfacing with the blockchain in the background.  This gives all the security of the blockchain but makes the user experience simple.

Why should brands care now?

We are currently at one of those very rare moments in time when a big change happens all at once.  We believe that, just like the early days of the internet, there is a once-in-a-lifetime opportunity for early adopters to take advantage now.

Our mission at Sasco Digital Assets is to deliver the technical expertise and hands-on development to partner with our clients, invest in their success, and make sure that they are winners in Web3.

 

FAQ

Why are NFTs better than rewards programs?

Blockchains are built for permanence.  An NFT represents ownership that cannot be externally altered in any way.  As a consumer, I want to know that, like the product I buy from you, the NFT is owned by me.  Furthermore, we are just seeing the tip of the iceberg now.  New technologies are being developed every day that are creating new uses for NFTs.

 

What the heck does fungible mean?

Fungible items are mutually interchangeable – like dollar bills.  NFTs are non-fungible.  This means that an NFT is completely unique.

 

How can this be scalable?

For NFT projects that need to reach people on every level of tech literacy, we recommend building a portal on your website. Our developers will work with your team to create this integration.  The user experience will be the same as creating any login profile, but the backend will be interfacing with the blockchain.

What is the easiest way for a brand to try this?

Do a limited run on a specific product.  We can put together a low friction trial that gets your NFTs out there, creates buzz, and does not require much development.  The NFTs can be sold on your website or auctioned on some of the popular sites like OpenSea.

What are the risks?

Being an early adopter of any technology always comes with some risk – but it also comes with amazing rewards.  Brands that try to capitalize on the NFT buzz without delivering real value to their customers will be called out for it.  Brands that have strong communities of customers, and who put those communities first – will be extremely successful.

Are there security risks?

Definitely, but these are risks that can be mitigated with the right partner.  The blockchain is completely secure, but like we see every day, companies are vulnerable to malware and other attacks.  Security is a pillar for our client’s success, and our leadership and development team put it at the highest level of importance.

Over the course of the past year, one of the most remarkable developments within the digital asset space has been the proliferation of non-fungible tokens (NFT). An NFT is a unique digital asset, whose ownership is tracked on a digital ledger. Within any given day, NFT trading accounts for more than $50 million in trading activity, including a record-setting daily trading volume of $350 million, which occurred on August 27.

NFTs, without a doubt, have been generating a lot of buzz. But this asset class includes so much more than novelty memes, digital images, and other tradeable assets—it represents an opportunity for brands around the world to grow and increase engagement with their audience.

In a very short amount of time, the NFT marketplace has gone from being a sort-of unknown realm of possibility to something that now plays a crucial role in many of the world’s biggest brands’ day-to-day operations—comparable to what we have witnessed over the course of the past decade with cryptocurrencies and even the decade before that with social media.

Brands that don’t begin taking advantage of this growing digital asset will soon fall behind their competitors. As was discussed in a recent “NFT Now” podcast, featuring VaynerNFT President Avery Akkineni, there are many big brands that have begun harvesting excitement about NFTs but aren’t quite sure about the best way to begin exploring this ever-changing field.

Some brands are hesitant to begin utilizing NFTs because, due to the fact they have very little familiarity with them, there is a perceived degree of risk. But in reality, the bigger risk is choosing to not begin developing an NFT-based marketing strategy and losing an opportunity to become an industry pioneer.

 

The NFT Marketplace: Combining Creativity and Expertise

A quick review of Google Trends reveals that public interest in NFTs has absolutely skyrocketed over the course of the past year. As a new asset class, people—including ordinary, brand-facing consumers—have a strong interest in NFTs and, as reflected by the market, are also willing to make some serious financial commitments.

Big brands know this. Big brands want to take advantage of these new opportunities, just as they would with any other opportunity of such magnitude. Only some, however, have invested in the expertise and resources needed to be successful.

Companies such as Sasco Digital Assets (SDA), among others, have begun fulfilling this natural need for NFT and digital asset expertise, along with supporting services (such as custody solutions). These companies make it possible for brands to identify NFT marketing strategies that are both profitable and feasible, securely execute their plans, and continue generating value for their consumers over time. It is no longer necessary to invest in an in-house NFT and Digital Asset department because the support is readily available.

Of course, the potential value of NFTs isn’t just something that exists in theory—it’s something that has already helped dozens of major brands reach new heights.

 

NFT Marketing Success Stories

“If you had to pat someone on the back for pushing NFTs into the mainstream, it’s the NBA (National Basketball Association)”, claims MethodShop in a recent article. Through the NBA’s “Top Shot” website—a platform where people can purchase NFT video highlights of their favorite basketball players—the NBA was able to successfully cultivate $250 million dollars (including royalties) across more than 100,000 different buyers. Certainly not a small chunk of change.

NBA Topshots logo

Some people invest in these NFTs because they (rightfully) believe they are destined to increase in value. Others invest because they sincerely love their favorite players and want to have the exclusive right to be the owner of their favorite dunk, steal, or three-point shot.

The NBA’s success with NFTs doesn’t stop there—the league has also made a considerable amount of money with NFT trading cards. Other sporting leagues across the US (and elsewhere around the world) have taken note of the NBA’s success and have begun developing comparable strategies of their own.

The NBA is hardly the only major NFT success story. Christie’s Art Auction House—the most prestigious art auction house in the United States—has also begun treating NFTs as a form of digital art that can be bought and sold just as easily as their physical counterparts. Gucci, Coca-Cola, Asics, and other large brands have also generated significant profits and engagements through their innovative use of NFTs.

 

A New Frontier

NFTs have only been a “mainstream” digital asset for about a year, meaning there is not always a complete and perfect playbook available for brands to use. Being willing to take chances and be creative will be absolutely paramount. But with a supportive team of NFT experts, dedication to their clients, and a willingness to explore this new digital frontier, brands across the world can benefit tremendously from these remarkably dynamic digital assets.