We’ve written extensively about the still fairly recent arrival of non-fungible tokens (NFTs) as a potential revenue stream, caveat-filled investment destination, and pop culture marker of the moment. In 2018, we wrote about the Los Angeles Dodgers giving digital bobbleheads to fans, who could redeem a hidden private key to send the bobblehead to a personal cryptocurrency wallet or sell the unique serialized bobblehead to another fan. Later we wrote about NFTs in the art world, from a burnt Banksy to Beeple’s record sale Every day – The first 5000 days, sold for $69.3 million (including fees). Increasingly, the practical uses of NFTs are being examined in places beyond entertainment and intellectual property portfolios, including the real estate market. Recently, the Spanish airline Air Europa even sold the first NFT plane ticket, called “NFTicket”, for just over a million dollars.
NFTs can also be seen as an entry point for individuals and brands trying to figure out where, if at all, they are in the metaverse. An NFT can be a video, GIF, avatar, artwork, real estate, tweet, or designer shoe.
But while the multimillion-dollar offerings get all the attention (and, often, well-deserved scrutiny), many are sold for far less money, making the medium of the day an attractive destination for brands looking new ways to connect with consumers and develop new markets.
Here are some ways brands are sinking:
- Earlier this year, Coachella sold lifetime passes to the music festival through its new NFT marketplace. Limited Coachella Keys Collection NFTs included passes to Coachella each year, special festival benefits, digital collectibles, and lifetime access to virtual experiences.
- A lucky NFT collector can go to space in a suborbital rocket. Uplift Aerospace, a pioneer in the space industry, has released its Launch Pass NFT collection, which includes 10,921 NFT artworks, each offering the NFT owner the opportunity to request space travel aboard a Blue Origin rocket. Once the company selects an amateur astronaut, all NFT owners will be able to convert their token into a Starborn NFT, which will include an avatar in the company’s space metaverse and access to real-world experiences such as launch events. rocket.
- Adidas Originals has launched an exclusive series of NFTs with a limited supply called Into the Metaverse, although some may be available on the secondary market on OpenSea. Owning an Into the Metaverse NFT grants exclusive access to virtual Earth merchandise and experiences.
- Luxury car manufacturer and famous Formula 1 team McLaren has launched McLaren Special Operations (MSO) LAB, a new division of the company dedicated to digital. For starters, McLaren dropped “a pioneering collection of rare supercar NFTs” consisting of 2,012 NFTs that also unlock access to the MSO LAB community. This first collection, however, is invite-only, meaning only those who own a physical McLaren car or are specially invited will have access to these NFTs.
- Starbucks is building a global digital community to cultivate connections, relationships and collaboration. They plan to start by launching a series of branded NFT Collections that will give NFT owners access to exclusive experiences and benefits.
- For its twentieth season, american idol launched the NFT Card Packs, which provided the fan community with special digital assets and opportunities to earn cryptocurrency and eventually win an exclusive Golden Ticket that can be redeemed for an actual trip to Hollywood .
Best practices for brands
There is a theme here. For many, exclusivity and unique opportunities are what make NFTs valuable. This one-of-a-kind piece of code is exciting and strange to many people and businesses.
Know your audience: The metaverse is vast, varied, and still largely defined by community fragments. Every day, people around the world create, buy and sell NFTs. Some are young; some are old. Some know a lot about technology, and some know very little. Finding spaces where the intended audience and the designed product align is no less crucial in the virtual world than in the real world.
Join to: One strategy for better understanding space is to be in space. Branded NFTs can also be a proactive way to establish a place in the metaverse and guide consumers to genuine digital assets, rather than counterfeits or other infringing assets.
Know the limits (of intellectual property rights): Content creators and NFT buyers may not know or understand intellectual property rights and limitations and their impact on an NFT transaction. For example, as we saw earlier, ownership of a physical object and ownership of a copyright are separate and distinct. When someone buys an NFT artwork, it probably doesn’t pass the copyright on the underlying artwork, so the NFT buyer can then print and sell that artwork on a t-shirt. The terms of an NFT transaction, including intellectual property rights and limitations, should be clearly communicated in the smart contract or traditional contract governing the transaction. Likewise, there are limitations to smart contracts, and in most cases the terms and conditions of an NFT transaction still need to be captured in a traditional contract.
Regardless of a company’s approach to NFTs, branding, and the metaverse, whether it’s toe-dipping, wading, or head-first diving, there is important to remember that wherever there is intellectual property, there is a danger of intellectual property infringement. Ensuring that all copyright and trademark registrations are up to date is a must, as is the assessment of trademark registration classes. A trademark, for example, can be registered for clothing, such as shirts, pants, and shoes, but this does not necessarily include virtual clothing worn by an avatar or collectible NFT shoes. In other words, a brand’s existing marks may not span the metaverse. In response, some brands are reassessing their trademark portfolios and now registering trademarks in additional categories to extend protection into the world of digital assets and experiences.