How NFT Marketplaces Will Board the Next Mass Wave of Users to Crypto
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Is there life beyond the bear? While crypto Twitter and mainstream media express varying levels of hope and skepticism, many teams are working hard to bring the future of Web3 closer. And this time – it’s not just crypto, folks.
This is the main difference between this “crypto winter” and the one from 2018-2020, when Ethereum was available for less than 200 dollars. Drastic drops in prices and market value caused many debates about the legitimacy of the industry from traditional outsiders, but failed to scare away the Web3 faithful who just kept building. Whether it’s because of the precedent they set or anticipation of the larger market, traditional players doubled down on the bear builder party this time.
Related: How Crypto, Blockchain and Web3 Institutions Can Accelerate Mass Adoption
NFTs should lead the way
The spotlight here is again on NFTs. Undaunted by market conditions, quite a few forward-thinking brands have released pilot NFT projects to test the waters (McFarlane, Fox, Starbucks) or worked on robust digital asset-based community campaigns behind closed doors. It is obvious to everyone that it is not a race for quick profit, but a well-thought-out long-term game.
“Whello now?” you are probably wondering. First and foremost, the technology, UX and education framework has finally reached the level that significantly lowers the barrier to entry into the NFT ecosystem. Arguably, for the first time ever, Web3 is close to being ready to bring in millions of mass users.
– How does it look in practice? you might ask. Loyalty programs, community engagements and unlockable content are among the brands’ favourites. Large companies are beginning to consider NFTs as a base for a range of activities, providing an inspiring hint of what the next bull run might look like.
Such an increase in credibility and the prospect of mass adoption cannot but help to influence the current shape of the industry and the trajectory of its development. To date, the heart of the Web3 movement has been NFT marketplaces – platforms with various levels of decentralization where users can create (create), display, buy and sell their collectibles. For quite a few brands, these marketplaces have been the entry point into the NFT world.
With this trend clearly unfolding, we can’t help but ask ourselves: What role will NFT marketplaces play in this major movement? Will they stay the same or evolve to increase mass adoption in partnership with brands?
Related: Make your brand a household name using the power of NFTs
Rethinking NFT marketplaces
What is the first thing that comes to mind when you think of an online marketplace? Quite likely, the likes of Amazon will be there: a one-stop-shop environment where users can find literally anything they want. Items offered vary in price, but one thing remains the same: High-end brands have very limited representation there. You might find an expensive perfume or a pair of glasses, but that’s about it. And who would shop for Chanel bags on Amazon anyway?
This analogy is key to understanding brands’ strategy as they enter the Web3 with their vast user bases. Does this traditional marketplace model appeal to brands? I would argue not. As NFTs are developing next-generation gamified loyalty programs for communities, one size fits all doesn’t seem like a good match.
Brands dipping their toes into NFT are looking to offer a safe, unique brand experience for their customers – with controllable monetization on top.
Adoption issues and solutions
When sending users to a third-party NFT marketplace, there are several issues that a brand may encounter:
Security and IP protection: Unfortunately, there are malicious players in the market and NFT marketplaces do not always do a timely job of eliminating pool copycats to ensure that a new user does not accidentally buy the wrong NFT.
Income Generation: With the recent market developments and the “race to the bottom”, the trend is towards not honoring royalties for creators, which can serve as a major revenue stream for popular collections. On top of that, using a third-party NFT marketplace always means paying fees that can change at any time. In other words, don’t fully control your income stream.
This is where the Shopify model enters the scene. Unlike traditional Web2 marketplaces, NFT marketplaces can take different forms – and verticalized, custom community marketplaces are a very promising route.
Creating and fully controlling its own common marketplace allows a brand to enforce royalties, set custom fees, and ensure the proven authenticity of digital collectibles with a branded look and feel, all in the spirit of decentralization.
On top of that, NFT community marketplaces can be powered by shared order books, meaning that buy and sell orders can be aggregated from other marketplaces from the start to help bootstrap liquidity.
That being said, community NFT marketplaces can really become the gateway to the next mass wave of users to crypto in a safer and more accessible way. Will this be the case in the next bull run? Time will tell.
Related: Why community is key in Web 3.0