Fan Tokens: A Case Study
The introduction of Bitcoin revolutionized the way we thought about money. Operations previously dominated by archaic financial systems could now be powered by a global decentralized network. Value could move without borders or frictions, allowing payments to be sent quickly and with low fees, in a peer-to-peer, trustless environment.
Alongside the rise in alternative financial systems, the way in which we interact and perceived value was also evolving. The rise of social media triggered hyperconnectivity, obliterating the need for proximity — according to Chiliz and Socios CEO, Alexandre Dreyfus, 99.9% of fans aren’t even in the stadium. Information could now be shared and accessed from almost anywhere. But what about the ability to engage? Voicing opinions, showing support, voting? This came too, first with likes and comments, and now users have a robust set of tools available to them that facilitate dynamic interactions. This has become so pervasive that metrics such as followers, likes, and engagement are now considered very important aspects of a brand.
Fan tokens represent an amalgamation of these two movements, blockchain and engagement. Similar to branded currencies, another asset category that the XDB Foundation is actively developing, fan tokens look to enhance the relationships that exist between brands and their fanbase, allowing for heightened engagement and stronger connections. In this piece, we will explore some of the numerous applications of fan tokens through an analysis of the fictional bakery, “Nibbly’s Baked Goods.”
Nibbly’s Baked Goods
Nibbly’s Baked Goods is an artisan bakery that prides itself in its beautiful all-natural creations. The combination of taste and aesthetic have made them very popular, and business is booming across walk-ins, catering, and online sales. They have also built a very strong social media presence, and often post their creations, as well as how-to videos, recipes and much more. The owner, Nibbly, is quite the charismatic fellow, and will often do livestreams to interact with the company’s rapidly growing fanbase. Nibbly is also very interested in cryptocurrencies, and upon hearing about fan tokens, began exploring ways that he could implement them into his business.
Voting
Voting can facilitate a powerful feedback loop between a creator and their associated fanbase. This information can then be used to customize offerings to ensure that products and services best align with the end consumer, increasing consumer perceived value. Voting isn’t a novel concept, but blockchain-based voting via fan tokens introduces transparency and accountability, which falls in stark contrast to black box style voting. Fans can see their votes as well as others clearly on chain, and that the ultimate decision falls in line with the voting results.
Nibbly’s patrons are the lifeblood of his business, and realizing this, he decides to enable voting through fan tokens. By allowing fans to vote on things like ideas for new recipes and content for his livestream, Nibbly is more aligned with his follower base, and his fans have direct input into the content and products they consume.
Access
Fan tokens can be used to grant access, creating a feeling of exclusivity to holders. In addition to his regular product line, Nibbly makes specialty cakes that he auctions off. However, he wishes to stay loyal to his fanbase, and would prefer that buyers are part of the Nibbly’s Baked Goods community. Whenever someone engages with his products or content (buying baked goods, commenting on his content, etc.) they receive a certain number of fan tokens. Over time, members of the community that engage more ultimately end up with more tokens. Nibbly then sets a requirement that in order to enter the auction, you must spend 100 fan tokens. This presents two interesting ideas. One, fans are encouraged to and rewarded for engaging with Nibbly’s content, ultimately creating a kind of loyalty system. Two, this creates a market for fan tokens, where if someone does not have the required amount of tokens but wants to participate in the auction, they can buy them off other holders or Nibbly himself, opening up new revenue streams for Nibbly and his community.
Memorabilia & Collectibles
Food items for all intents and purposes are meant to be eaten, no matter how aesthetically pleasing they are. Nibbly realizes that his custom creations lack longevity, and wants to introduce NFTs and collectibles to allow his creations to exist past the point of consumption. Nibbly has a professional photographer take pictures of his custom creations, and then issues a 1-of-1 NFT for each one. Now even after the cake is enjoyed, it can be forever appreciated in the form of an NFT. But there’s more…
Nibbly is now also aware of everyone that has ever bought one of his custom creations, as well as those that currently hold the NFTs. He uses this information to distribute exclusive promos and specials to these holders — creating value that goes far beyond the cake itself.
Making it Easy
Nibbly is not alone in his blockchain endeavours, there are thousands of people, businesses and organizations out there that see the value and want to get involved. However, many technical hurdles exist when utilizing and implementing blockchain technology, and for many, it is not feasible to build out blockchain capabilities in house. Luckily, organizations are quickly emerging that provide expert level competencies, allowing brands to focus on what they do best, while benefiting from all of the innovations occurring within the blockchain industry.
Zytara Labs
Zytara Labs, a wholly owned subsidiary of XDB Foundation ecosystem partner Zytara, is a full-service production company and studio supporting musical artists, actors, gamers, esports teams and other brands with the creation, sale, and marketing of NFTs. Zytara Labs has played an integral role in several NFT initiatives so far, notably, Floyd Mayweather’s NFT series, Dole and David Datuna’s “Taking A Bite Out Of Hunger,” and the recent collaboration between Ozuna and Richard Orlinski.
To learn more about Zytara and how they can help bring your NFTs to the world, click here.
Moving Forward
Fan engagement tokens can be used to power a number of unique activations that can help to enhance the relationship that exists between creators and their fan bases. The ideas discussed above are by no means limited to baked goods, and can be applied across a number of industries and business models. Bringing creators and their fans closer together introduces a number of benefits, including optimized content, increased consumer perceived value, heightened marketing intelligence and overall stronger connections and sense of community.
