Welcome to Crypto Por Favor, where I explore the future of crypto-powered consumer applications. Catch me on Twitter to chat all things consumer crypto. All views in this blog are my own and do not necessarily represent the views of my employer, Foundation.
After two weeks off due to travel on the East Coast, I’m excited to get back into another exploration in the crazy world of Web3. In light of recent corporate forays into NFTs, I wanted to dig deeper into how established “old guard” companies might leverage NFTs successfully.
Many consumer-facing companies of all types are speaking publicly about launching NFTs or are having intense internal discussions of what the best way to roll out an NFT strategy to meet their business objectives. Some of them are doing it for a quick cash grab, while others are taking a more long-term, considered approach. To start, I’ll highlight a high profile example rolling out in real-time. A little over a week ago, Adidas launched Into the Metaverse, which is a limited edition collection of NFTs created as part of a collaboration between Adidas and Bored Ape Yacht Club, PUNKS Comic and NFT persona gmoney.
The drop consisted of 30,000 editions sold for 0.2 ETH each with 2/3 of the NFTs reserved for holders of NFTs created by Adidas’ launch partners.
Holders of the NFT will get access to free physical merchandise drops inspired by their NFT launch partners as well as exclusive access to events in virtual worlds. The roll out of merchandise will have multiple phases and the NFT will have to be burned to claim the specific merchandise in that phase. Users will receive a new NFT for the next phase of claiming. This will be done in order to clearly delineate how much physical merchandise each NFT on the secondary market is eligible for.
I wouldn’t be surprised if they had more up their sleeves - they have made it clear that they are taking their NFT ventures seriously by partnering with some big names in the NFT world and as a pleasant surprise have taken a very crypto-native approach so far after all.
While it is too early to tell whether the Adidas NFT launch will be successful, it’s clear that they took a thoughtful approach and it appears they are committing resources toward cementing their place in the metaverse for the long haul. Nike, on the other hand, decided to acquire RTFKT recently rather than go the partnership route that Adidas did and it will be interesting to see how their efforts evolve as well.
How corporates can do better
The perks that Adidas is offering are fine, but is there more ground-breaking innovation that can be explored? I think the most interesting aspect of NFTs is the potential to bestow ownership either directly or indirectly to token holders. What if owning an Adidas NFT came with stock in the company? This would be the best way to align the interests of users with those of the company as well as to make them feel the strongest brand affinity. Imagine an $ADIDAS token and how that could attract consumers to engage with their brand. Additionally, Adidas could create very exclusive sneaker drops that could only be purchased with their token. There may be regulatory challenges with doling out equity and I’m sure their finance department would not be a fan of more complex accounting if they used their token as a means of payment. Ultimately, corporations are typically notoriously conservative so I don’t expect something like this to happen any time soon.
However, I believe 2022 will see more corporates make legitimate strides to becoming major players in the metaverse. Sandbox, for example, has many partners already lined up (I see you Adidas!).
That’s not to say I am bullish on corporate NFTs as a whole - far from it - however, there will be a handful of companies that execute well on this front and whose presence will be here to stay. Hopefully, these corporates will also be interested in pushing the boundaries of what their NFTs entitle holders to.