In 2021, Chris Dixon wrote an article on how creators can use NFTs to monetize their “1000s of true fans”. Since then, the use cases for NFTs have multiplied.
Case in point: the rise of NFT memberships, requiring fans to hold specific NFTs in order to join private communities and enjoy their benefits. NFT memberships offer creators a way to strengthen their brands, build valuable communities, and allow fans to share in the benefits of community development.
By working on creator growth at Twitch and Facebook, and writing about the creator economy, I believe NFT memberships will become a monetization channel for creators on a par with ads and subscriptions. Based on real-world examples, I analyze why creators might consider NFT memberships, how they are used in practice, and how the creator economy and web3 startups can capitalize on their growing popularity.
Advantages of NFT Membership
While all NFTs are digital collectibles stored on the blockchain, different types serve different purposes. For example, people often buy profile picture NFTs (PFPs) to use as avatars.
However, with NFT membership, the NFT is an admission ticket to an exclusive group. Think about it: Soho House or a country club, but membership is online first and foremost, and entry depends on whether you’re a token holder rather than having the right relationship.
More and more creators are getting into web3 by building NFT communities for their fans. For business-minded creators, NFT memberships can replace and complement traditional subscription and ad-based revenue models in several ways:
Creators can get more from NFTs by segmenting fans’ willingness to pay. On traditional platforms like YouTube, creators use ads to target casual fans who won’t pay for content, and subscriptions to target fans who are willing to pay a small fee. As a result, they get more money from real fans. NFTs allow creators to earn more by targeting fans of all levels. Creators can either target their biggest fans with limited-edition series of NFTs, or launch follow-up series to target more casual fans.
Creators can get more out of NFTs by reducing middleman fees. Traditional platforms take a large percentage of creator subscriptions and advertising revenue, and can change policies at any time without the creator’s permission. With NFTs, creators can keep most of the revenue they earn from their initial minting (see this NFT minting guide), and then also earn additional revenue from royalties.
Creators can meaningfully acknowledge early fan bases. On traditional platforms, early backers of creators don’t get anything in return for creators becoming more popular. Of course, one could argue that they discovered YouTubers before they became famous — but that’s hard to prove, and it’s unlikely that early fandom has any real benefit.
On the other hand, NFTs provide a way for fans to clearly demonstrate their status as early followers of the creator. Creators can reward these early fans, such as participating in events and special releases. Additionally, creators’ early collectibles (ranging from musicians to athletes) tend to appreciate in value based on the creator’s success. In this way, NFTs directly incentivize fans to help creators succeed.
Disadvantages of NFT Membership
For creators, NFT membership also has potential difficulties to be aware of.
Creators have no direct control over the price of NFTs minted. While creators can set the initial NFT minting price and their share of secondary royalties, they have less control over future NFT prices. For example, if the entire NFT market collapses, creators may end up earning less from NFTs than traditional channels.
Alternatively, speculators can buy creators’ NFTs and drive up prices without giving real fans a chance to participate. To prevent the latter problem, creators can promote NFT “allow list” locations to fans early on, before speculators learn about the project. They can also make rules that prohibit any one person from buying too many NFTs at once.
If the value of NFTs is unclear, creators may alienate fans. Creators need to articulate the value of their NFT memberships so as not to disappoint fans. Fans ask creators to keep their promises and expect them to provide long-term utility to NFT members. And launching an NFT membership without a clear plan for how to provide value to members puts the creator’s reputation at risk.
Managing a community of NFT members is hard work. Community stewardship is an important commitment on top of creators’ existing content production plans. To help ease their workload, creators can hire a team to keep the community engaged and encourage fans to play a role in driving membership value. However, they are unlikely to fully outsource engagement responsibilities – after all, creators are at the heart of their brand.
How creators can use NFT memberships in practice
What are the minimum requirements for NFT membership? Successful communities typically have three components:
1. Creators already have an engaged fanbase who can be invited to buy their NFTs.
2. Fans buy NFTs to join the community and help increase membership value.
3. Creators and their communities provide utility to members in the form of real-world benefits.
Let’s look at three examples of NFT membership communities that illustrate this model well.
VeeFriends is a series of NFTs created by Gary Vaynerchuk, co-founder and CEO of booking platform Resy and digital agency VaynerMedia.
- Creator: With his entrepreneurial credentials, Gary has built a large, multi-platform audience.
- Community: Gary educates his audience on the VeeFriends community on why NFTs matter and how to buy for the first time. He draws and creates backstories for all the characters in his NFT collection and associates tokens with individuals.
- Availability: All VeeFriends holders receive a free three-year pass to the VeeCon conference. The inaugural VeeCon took place in May 2022, featuring heavyweight speakers like Snoop Dogg and Beeple. VeeFriends holders played a key role in organizing the event.
Moonbirds, the second NFT series from Kevin Rose’s private community Proof Collective.
- Creator: Kevin hosts the popular crypto podcast Modern Finance.
- Community: Proof’s first NFT series has 1000 passes. Many of the top NFT collectors who listened to Kevin’s podcast bought these passes, which injected talent into the community and created latent demand for Moonbirds.
- Utility : Moonbirds holders are incentivized to hold their NFTs long-term to unlock exclusive rewards, such as merchandise and real-life activities.
Developer DAO, a DAO launched by developer Nader Dabit after he left AWS to focus on web3.
- Creator: Nader Dabit has built an audience on his YouTube channel, which focuses on developer education. He then launched the Developer DAO to accelerate the education and impact of web3 builders.
- Community: Developers and other talent purchase Developer DAO NFTs, amplifying the appeal of members.
- Utility: Access to the community itself has become a major advantage of NFTs. Members help each other with events, construction projects, and job searches.
Here are other examples of how NFT membership programs can provide long-term utility:
- Access to Creators and Community – ZenAcademy: Holders can access a private community of NFT enthusiasts and spend working time with one of the top NFT collectors and educators, Zeneca.
- Intellectual Property (IP) – Bored Ape Yacht Club: Holders can use their BAYC for other purposes and sell. For example some members have established spin-off projects such as the studio Jenkins the Valet.
- Real-Life Events – CPG Club: Holders can access the Web3 operator’s community, regularly plan real-life meetups, and other perks.
- Real-Life Membership and Governance – LinksDAO: Holders can earn golf merchandise and private golf club memberships. They also have the right to vote on the direction of the DAO.
- Education – CuriousAddys: Holders can gain access to online NFT courses, educational games and access to learning communities.
- Accelerator Registration – Meta Angels: Holders have priority access to projects launched by Angel Labs, a 10-week accelerator program for NFT project founders.
- Merch and NFT Airdrops – World of Women: Holders have the opportunity to receive additional NFTs and art prints airdropped by female artists, among other benefits.
How companies can help creators manage NFT memberships
Creators and communities are experimenting with NFT memberships in new ways. As this trend heats up, creators will need help throughout the user journey from web2 to web3. To support creators, startups can:
Create NFT membership
- Define membership details (eg, target, audience, volume, price, benefits).
- Recruit a team or opt for no-code solutions to create artwork, smart contracts and websites.
Introduce membership to fans
- Build a community and tell fans why NFT memberships are valuable.
- Use an allowlist to reserve NFTs for fans and speculators.
Collaborate with the community to create value for NFT members
- Learn which holders contribute the most to the community.
- Work with holders to provide ongoing utility to NFT members.
- Manage and find ways to fund the treasury, such as through partnerships.
- Manage tax and legal contracts.
Currently, many companies are already addressing these challenges. I am excited to see more creators and communities using NFTs as a tool to create value and share in the rising benefits.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-creators-can-create-and-use-nft-memberships-in-practice/
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