Shareable NFTs supercharge the utility of normal NFTs
NFTs spearheaded the Web3 hype in recent years, receiving major attention from global brands and media outlets. As the dust has settled, it is time to get excited about the newest evolution of NFTs and the utility value of shareable NFTs, or sNFTs.
The popular NFT use cases describe how people can engage with their favorite brands by accessing exclusive events, products, digital experiences or discounts. NFTs have been a great marketing tool to get people mentally invested in a brand and even spend real money. But without any real-world utility, there was nothing to support the hype.
What makes sNFTs valuable?
An NFT can generally be held by one person (or wallet) at a time, and its ownership can be transferred to others. An sNFT can be shared with others, meaning a new token is minted from the original and passed on. Each share leaves a trace, creating an expanding tree structure that can be traced back to the original token. Here, the sharing data generated by sNFTs is the value promise brands should notice. (For more details, check the ERC-5023 standard.)
I’ll give you a case example.
I’m an avid trail runner. Let’s say one of my favorite brands, like Hoka, Salomon or VJ, decides to promote an upcoming shoe model using influencers or active hobbyists like me. They mint an sNFT called Jarmo’s Step of Approval and tell me that everyone who owns one gets to buy the shoes in an exclusive pre-sale opportunity. Great! Here’s what the alternate universe machine sees happening:
A. During a brief ultra-marathon event in the local woods, I share the token with 20 other runners.
B. I’m a shy influencer but luckily my friend Micke is a social butterfly. I share the token with him and he shares the token with 19 other people, making my total 20.
The shoe company, pleased with the buzz surrounding their new shoe, decides to add a new prize: anyone with 25 shares can buy a special edition model! In both situations, I have an extra incentive to share the token a few more times to get my hands on the new shoes. But the benefits don’t end here!
In universe B, my friend also has a great head-start with his 19 shares. So it’s not just me who gets all the goodies. In fact, everybody wins by sharing an sNFT. That’s also known as being an anti-rival good.
And like any other NFT, I can also sell the token to someone who really, really wants the special edition.
Shareable NFTs enable data analysis
The distinct value of shareable NFTs is the tree path, which becomes a gold mine for behavioral data. Although a regular NFT transaction is logged, there is very little to tie that information to a bigger picture. The sNFT shares paint the picture automatically when they get passed around.
Of course, the data quality depends on each use case. At a high level, you could analyze how different influencer networks managed to promote your brand. Or maybe the sNFT is minted and tracked through visits to a local store or via engagements with a social media platform. As the roots grow deeper, the potential insights become more diverse.
Keeping data open for innovations
So, why create a brand awareness campaign with new Web3-era tools like shareable NFTs instead of linking an existing social platform to a customer database? It’s simple: to allow new innovations to thrive by freeing data from closed environments.
Companies already create massive amounts of data, which may be business-critical but not necessarily secret. However, a raw data stream is not always easy to refine into something valuable. Shareable NFTs are one way to package the information into a more tangible form for further use. In this sense, sNFTs can become essential to innovations benefitting from open data development.
Originally published at https://tx.company on May 9, 2023.
