In his 2021 article “NFTs and a Thousand True Fans”, Chris Dixon shared how creators can use NFTs to monetize from a thousand loyal fans. Then in the creator economy, the use cases for NFTs began to multiply. One of the typical use cases is NFT membership: requiring fans to hold a specific NFT in order to join the community and enjoy privileges. NFT members can help creators strengthen their brands and build more valuable communities, while fans can also benefit as the community grows.
In the future, NFT membership will become a monetization method for creators that rivals ads and subscriptions.
Next, we will discuss the advantages of NFT members through practical cases, how they are used in practice, and how creators and Web3 startups can use NFT members to expand their influence.
NFT member case
While all NFTs are digital assets stored on the blockchain, different types of NFTs can play different roles. For example, PFP-type NFTs can be used as avatars, and NFT members can be used as tickets for exclusive teams such as concerts. The project party or community only needs to check whether the user address holds NFT on the blockchain network to determine whether they have specific rights.
More and more creators are using NFT members to build a community, and thus get involved in Web3. For creators, NFT membership can replace traditional subscription and ad-based charging models in a number of ways.
Creators can get more revenue from NFTs by segmenting fans’ willingness to pay. On traditional platforms such as YouTube, for users who are unwilling to pay for content, creators can only make money by advertising; for users who are willing to pay a small fee, creators can make money through subscriptions; for some users who are willing to pay Loyal fans of more fees, creators don’t have a great way to monetize. For fans with different willingness to pay, creators can launch different types of NFTs. For example, creators can launch limited-edition NFTs targeting loyal fan bases, or they can launch regular NFTs for general fans.
NFTs help creators segment user groups based on willingness to pay
Creators can get more benefits from NFTs by reducing platform commissions. Traditional platforms take a big chunk of their revenue from subscriptions and ads, and can change the rules at will without the creator’s permission. With NFTs, creators can keep most of the proceeds they get from selling the NFTs (see The NFT Mint Sweet Spot : Data on Early Decisions for details) and earn additional income from royalties.
NFTs can directly motivate early backers and help creators succeed. On traditional platforms, early fans will bring creators a lot of necessary help and encouragement, and even lay an important foundation for their subsequent success, but the identity of early supporters is difficult to prove and unlikely to bring tangible rewards . NFTs provide a way for fans to prove their status as early participants, creators can prepare perks such as special events for early fans, and as creators achieve greater success, their NFT prices typically increase significantly, and early Holders can obtain greater benefits.
Challenges faced by the NFT membership mechanism
Creators have no direct control over the price of minted NFTs. Although creators can set the initial NFT minting price and their share of secondary royalties, they cannot control future price changes of NFTs, and if the entire NFT market collapses, creators may end up earning less than traditional channels. Speculators may also buy creators’ NFTs and drive up prices, leaving true fans no chance to participate. In response to this problem, creators can create a fan whitelist during early minting, or prohibit individuals from buying too many NFTs at one time.
If the NFT value is unclear, creators may lose support from fans. Fans hope that NFT members can provide long-term utility, so creators need to clarify the value brought by NFT members, so as not to disappoint fans. Launching an NFT project without clarity on how to provide value to NFT member holders may result in damage to the creator’s reputation and loss of fan support.
NFT member community governance is a tough job. Community governance is an important way for creators to achieve their content production plans. In order to reduce the workload, creators can hire a professional team to keep the community active, and encourage fans to spontaneously maintain the community environment and expand the influence of the community. As the core of the creator brand, creators also need to keep an eye on the development of the community.
How creators use NFT members in practice
What are the minimum membership requirements for creators to issue NFTs? A successful launch community typically consists of three components:
- Creators need to have a certain fan base, and can issue NFT membership purchase invitations to them
- Fans are willing to buy NFTs to join the community and help increase membership value
- Creators and their communities provide members with utility in the form of real-world practical benefits.
Below we observe three examples of NFT member communities.
VeeFriends: It is a collection of NFTs issued by Gary Vaynerchuk, who also co-founded booking platform Resy and digital agency VaynerMedia, where he is CEO.
- Creators: With a track record of credibility, Gary has built a large and diverse audience.
- Community: Through relevant training, Gary lets fans understand why NFTs are important and how to buy NFTs for the first time, so that fans can buy NFTs and join the community. And the creators have created background stories for all the characters of the project, enhancing the narrative of NFT.
- Availability: All VeeFriends holders can attend the three-year VeeCon conference for free. At the inaugural VeeCon conference in May 2022, heavyweight guests such as Snoop Dogg and Beeple attended and gave speeches, and VeeFriends holders played a key role in the organization of the event.
- Moonbirds: This is an NFT collection launched by Proof Collective, a community started by Kevin Rose.
- Creator: Kevin is the host of the popular crypto podcast Modern Finance.
- Community: Proof Collective’s first NFT series has 1000 passes, and many of the top NFT collectors who listen to Kevin’s podcast have bought them, creating a potential demand for Moonbirds NFTs.
- Practicality: The Proof Collective community will incentivize Moonbirds holders to hold their NFTs for a long time by unlocking exclusive rewards, such as some merchandise or offline activities.
Developer DAO: Launched by Nader Dabit after leaving AWS.
Creator: Nader Dabit established a Web3 developer education channel on YouTube, attracting a large number of fans. He then started the Developer DAO with the aim of accelerating the education and impact of Web3 builders.
Community: Developers and their fans buy Developer DAO NFTs, increasing the attractiveness of NFT members.
Practicality: Being a community member is the main advantage of this NFT, and members help each other with events, development projects, and job referrals.
How do NFT membership programs provide long-term utility? The figure below provides some examples.
How does Web3 help creators launch NFT membership programs?
Creators and communities are experimenting with NFT membership programs in new ways. As this trend accelerates, creators jumping from Web2 to Web3 need extra help throughout the construction of their projects:
- Define NFT membership details (eg target, audience, volume, price, benefits).
- Recruit a team or choose a no-code solution to build artwork, smart contracts and websites.
Introduce NFT members to fans
- Build community and tell fans the value of NFT membership.
- Use a whitelist to reserve NFT minting spots for fans and speculators
Collaborate with community members 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 finding professional asset managers as partners.
- Manage tax and legal contracts.
Many companies are already addressing the above challenges, hoping that more creators and communities will use NFT members to create value and share benefits.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/reddit-product-lead-a-must-have-nft-member-practical-guide-for-web3-creators/
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