[Column] LINE’s NFT Strategy — How to Innovate the User Experience
We’d like to talk a bit about LINE’s NFT strategy and the NFT market as we see it. To gain a basic understanding of the market situation, you need to know about the overall NFT market, NFT contents, and NFT marketplaces. For instance, the NFT trading market reportedly grew by over 300 times last year compared to the previous year and created more than 3 million traders.
From a content perspective, while the existing crypto-native contents are popular and continuing to grow in sales volume, we are increasingly seeing the inflow of popular and big-name brands. From a market perspective, whereas crypto-native trading-oriented platforms had been flourishing, now more companies are getting involved, creating exchange-based and diverse vertical markets.
As the market expands, NFT market volume and the number of traders are expected to grow significantly, with many platforms increasingly adding user-rewards, voting, and user community-oriented functions. And the NFTs themselves will grow more popular, as users, contents, and trading environments all grow together.
In our opinion, we expect the overall NFT trading market to expand to 230 trillion won (or about US$190 billion) by 2025. Considering the market size of various sectors that have been active in the existing secondary trading markets, we believe that if only 10% to 30% of the market enters the NFT market, there is the potential to grow to that level. And, of course, in this process, virtual goods and metaverse products will be introduced due to the activation of the digital ecosystem, so the actual market growth potential is very high.
Since LINE started our blockchain business in 2018, we have launched a variety of related ventures. We develop and offer reward platforms using our own crypto asset LINK, exchange services based on licenses in the United States and Japan, platforms that allow companies and developers to easily build and operate their own ecosystem on the blockchain, and wallets for users. As for NFT platforms, we are conducting sales/transactions of NFT in Japan, and we expect that our NFT platform business will be a major turning point in the blockchain business, offering enterprise support on the global level.
We first conducted a Proof of Concept in Japan — a content powerhouse — and launched an NFT Beta Market which is linked to the LINE messenger, to provide an environment where Japanese users can easily trade various kinds of NFTs and to accumulate data on users and markets.
There are many examples of our successes that we can point to in this area, but among the biggest, we’ve published more than 1.6 million NFTs in five sectors, and we’ve been providing mainstream users with the experience of directly owning NFT transactions and content. We are currently discussing collaborations with more than 100 partners/creators on this digital collection.
The NFT market in Japan is set for a major launch this spring, and this will lead the growth of the market into the mainstream by connecting products with Yahoo Auction, Japan’s largest resale and auction platform, and by connecting to simple payment systems in addition to existing LN payments.
LINE’s NFT plan is to develop the product infrastructure, and then leverage that infrastructure to create a larger market. This market is not simply trading assets, but projecting their identity, establishing a community, and in this context, interacting with users based on storytelling and creating additional social values. This shows that when existing crypto serves as actual currency, NFT creates an ecosystem as social capital by capturing content and stories, sharing tastes, and belonging.
These days two of the biggest buzzwords in this field are Metaverse and Web3. It doesn’t seem like it’s a coincidence that these keywords have emerged as NFT has exploded. The digital world exists in a space where financial rules and regulations are still in the early stages of being developed. However, we believe that eventually we will see the evolution of a digital financial system that circulates within a single integrated ecosystem, creating tastes, consumption culture and communities. We also expect that users will be able to maximize their immersion in digital, and that the true Metaverse will be realized if contents and assets are guaranteed through NFT technology within the digital ecosystem.
How to accelerate popularization in today’s market of 3 million users will be the common challenge for many platforms.
⎮How does LINE improve popularization by maximizing the user experience?
1. Category — The PFP (Profile Picture) NFT is not the only type of NFT. NFT is just a form of infrastructure, and NFTs can be used in a wide range of ways in all sorts of areas, like art, entertainment, sports, fashion, IP, and marketing. However, in all these areas, NFTs need a specialized store front and relevant features. There is only one model in this ecosystem with numerous goods and products, and we need more customized services for our field or purpose.
2. UX improvement — The market is dominated by early adopters. Therefore, in order for NFTs to catch on with the mainstream public, the barriers to entry must be lowered and the UX must be improved.
3. Commercialization — In the current market, IP/content is a very valuable source of IP/content companies in the global market, but they are concerned about what content they can issue as NFTs and how they can communicate with the market. In order for popular content to be published as NFTs, we need more than use usability, but the establishment and implementation of local/global, crypto/popular marketing strategies.
In addition to make the NFTs a mass market and improve its popularization by maximizing the user experience as mentioned above, LINE is building a global NFT platform that we call “DOSI.” DOSI is a platform that can publish brand services/stores based on NFT, but it also works as a gateway between both crypto natives and general users to build their own virtual universe. At the moment, only an introductory version of the website is open, but we plan on expanding it soon.
⎮What about the DOSI platform?
DOSI will be an all-in-one NFT space providing the NFT market module with an unsurpassable value proposition where users will use DOSI wallet through multiple social logins to access to various sectors of NFT brand stores. Again, the focus of DOSI is on popularizing NFTs. It aims to take into account global scalability, community benefits, open ecosystem orientation, and user UX.
DOSI is divided into three major sections: stores, wallets, and support. Stores allow brands to build their own markets for brand/IP/creators and provide sector-specific platforms and infrastructure separately. A wallet — also known as a social passport — adds social functions as well as storage and handling of existing assets. Usual wallets support social log-in, etc., which is familiar to ordinary users, and allows them to choose and use their preferred payment methods, such as payments, to implement the user journey like regular commerce. The last part is DOSI Support, and in the end, public content and companies close to the public need NFT production or marketing support to reach and interact with the community through NFT, and LINE has both experience and capacity in this area, so we plan to continue to support it.
DOSI aims to utilize LINE’s infrastructure and knowhow to create the world’s leading NFT ecosystem, improving the usability and experience of users, expanding the ecosystem globally, and building Asia’s largest NFT value chain.