In the past year or so, a tonne of internet jargon has landed on our doorsteps. The blockchain, crypto, the metaverse and – of course – NFTs have moved from the fringes of the internet to become mainstays in the marketing press and mainstream media alike.
While many of these terms seem alienating (and more than a little niche), there are extremely tangible learnings and implications for brands to take away.
Which is why I want to talk about NFTs: in particular, the community that has sprung up around a collection of NFTs called the Bored Ape Yacht Club.
But before I begin: WTF is an NFT, right?
As I’m sure you already know, NFT stands for “non-fungible token”.
“Non-fungible” is an overly complicated legal term that essentially means “unique”.
And a “token” is any digital asset that exists on the blockchain (to oversimplify, the blockchain is a digitised and unchangeable ledger, and a token is an entry in that ledger).
You can make any piece of content that you own – an audio file, an image, a video, a meme – a token on the blockchain (a process known as “tokenisation”) and if you do so, you can make it clear that there is only one of those things.
That is an NFT. The fact that only one of these things exists on the Blockchain means that if you buy an NFT from here, you know the creator or the owner was the person putting it there.
Despite the fact a Van Gogh painting can be found countless times on Google Image Search or offline replicas, the original will always be valuable, right? In the same way, when Jack Dorsey sold the first ever Tweet, the person who bought that knew they were getting The Tweet, not a screenshot of the tweet.
So scarcity is part of what makes NFTs valuable. But it’s not the only factor. Value is also built into many NFTs because the act of buying one – or even just knowing that one might be valuable – is the ultimate status symbol among certain digital communities.
Just like the status symbols of yore – buying a Rolex, buying a Porsche – buying an NFT is an act of conspicuous consumption. But this is the new new money. In digital economies, who gets rich is defined by what you know, not who you know, and investments aren’t just in digital assets, but in the communities around them.
Which brings me to the Bored Ape Yacht Club.
Bored Ape Yacht Club is a collection of 10,000 illustrations of (non-human) apes looking bored, which have been tokenised on the blockchain. Created by a collective of digital artists operating under the title of Yuga Labs, each of the 10,000 Bored Apes is unique, generated from more than 170 possible traits, including expressions, headwear, clothing and so on.
Bored Ape Yacht Club recently gained fame because several celebrities, including basketball player Stephen Curry, bought Apes from the collection (Curry bought his for $180,000). Later, a bundle of 107 Bored Apes sold at Sotheby’s for $24.4m.
Curry’s Twitter profile picture is currently set to his NFT. But Bored Ape Yacht Club’s value isn’t dictated by him or his fellow celebrity investors alone. It’s compounded by a powerful community of insiders – not all of whom can necessarily afford to drop thousands on an NFT.
On Discord, this lively community of more than 40,000 enjoys direct access to the BAYC founders and exclusive merch releases. As their numbers grow, so grows the value of the Apes.
Yes, digitally native assets are becoming new markers of identity for the extremely online. But beyond that, they’re also forming the basis for a new generation of membership, community, and exclusivity: all of which are especially desirable in a digital landscape where everyone has access to everything.
Bored Ape Yacht Club is an international community of digitally savvy netizens with excellent aesthetic taste and a shared interest in tech. Actually owning an Ape NFT is a bit like buying into premium membership.
In this context, there is a tonne of implications for brands that point to opportunities around NFTs that are about more than generating brand assets no-one really wants to buy:
1. People feel more connected to brands, characters and universes when they have skin in the game. For brands that have the cachet to invite this, they should evolve their audiences into investors.
Because that’s the future of customer culture. It’s why FC Barcelona made €1.2m in just two hours from “fan tokens”: each one cost €2 in a 48-hour flash sale, and were sold to fans from 106 different countries in exchange for exclusive comms, access to VIP competitions and the opportunity to vote on selected team decisions.
2. For brands selling rare products, there’s an opportunity to extend their life by building community or membership around them. BAYC is proof that you don't need to own an NFT to feel part of the community.
Nike invested in the tech-savvy sneakerhead community early on with CryptoKicks: when people buy a pair of physical CryptoKicks shoes, they also buy the representative NFT, essentially giving the buyer physical and digital ownership of their purchase. Owners will then also get brand fan benefits in the form of exclusive and early access to later CryptoKicks collections. But the wider sneakerhead community can still follow and stan accordingly.
3. Collaborate with digital artists, communities and social-first franchises to build out credentials online. Someone who may not spend $180,000 on an NFT, might still drop $500 on a collab they do with Adidas, after all.
Asics is doing this with its ongoing “Sunrise Red” collection of NFTs: all NFTs are created in collaboration with young digital artists, and all the proceeds are reinvested into that programme, ultimately funding the rise of the next generation of talent.
Lore Oxford is global head of cultural insights at We Are Social