This potential already exists within NFTs and the Web3 marketplace ecosystem that is growing. However, the current perspective of marketplaces is a bit narrow, often restricted to a place to buy, sell and trade PFP collections or 1-of-1 artwork. This is just the tip of the iceberg, and Web3 companies launching true products are already looking beyond the current norms to explore how NFTs improve their unique product vision.

These utility-driven projects are becoming quite complex, including a functioning micro-economy, user rewards, and engagement tools that propel the product forward. Once the full scope is understood, clever minds begin to see these projects in a similar light as SaaS products. While the standard blueprint for an NFT launch includes a minting site and a third-party marketplace to facilitate trading, more robust projects know that this framework won’t suffice.

SaaS Products as Marketplaces

At the end of the day, most Software as a Service (SaaS) products we use are very specific marketplaces in which users exchange value or services. Want to rent your home to travelers every month? Open up AirBnb and start listing on the platform. Want to exchange ideas with your team? Launch Trello and start managing your project through the exchange of content.

These platforms facilitate an exchange between individuals, making them marketplaces by definition. This gets into the pure exchange feature of SaaS products, providing a hub for interaction between different audiences on both sides of the transaction. The value of this exchange differs drastically from app to app, including monetary, knowledge, or organizational value. Despite the variations, once businesses recognize SaaS products as marketplaces, the power of NFTs starts to crystalize.

NFTs Elevate Saas Models

The current framework for NFT collections is extremely limited, as many are focused on the initial sale of a collection instead of the long-term utility provided by the NFTs in question. As non-utility-driven projects still dominate the market, savvy minds are looking beyond the mint and evaluating what product and brand potential the NFTs represent. As highlighted above, NFTs are becoming increasingly powerful and shaping business models across the industry.

One of the value propositions of blockchain tech is the ease of commerce, enabling asset owners to carry out P2P transactions at will. Owning a digital asset is powerful partly because of the control of this asset, being able to buy, sell and trade it on secondary markets. This is where NFT marketplaces will elevate SaaS offerings, coupling the blockchain with specific product offerings to deliver more transparency, long-term value, and secure user verification.

Looking at Uber as an example, what value would NFTs provide to that platform? To understand this, it must first be clear that these platforms will integrate NFTs as seamlessly as possible to provide an intuitive experience. This means interacting with NFTs without knowing you’re doing so. Think about YouTube or Spotify. Users don’t care if they are interacting with MP4 or WAV files. This becomes a frictionless experience to exchange and consume.

Let’s get more specific…

If Uber mints an NFT that represents each specific ride that a user book, this asset can be stored and accessed to improve customer experience and add value. Maybe the NFT contains the billing information, the driver’s credentials, and information on the trip itself. This can then be referenced to verify reviews or as documentation to confirm why a user might have been banned. These NFTs can be collected, and users can be rewarded for them as they authenticate a user’s ride history and loyalty to the platform. This is just one small example of what is possible by integrating NFTs into existing SaaS marketplaces.

New Secondary NFT Markets

Most businesses are focused on the primary sale of a product. This is for good reason, given that product royalties don’t exist for IRL secondary markets. Up until blockchain technology, there was little to no financial incentive for a business to help facilitate secondary sales of their products. Now, this is being turned on its head, and secondary markets represent one of the largest opportunities for Web3 businesses deploying NFTs.

Now that users have true ownership over their assets, they have the ability to resell. Businesses that create these digital assets are in a position to help facilitate the reselling of these assets. Even if only 5% of users decide to resell, the associated platform fees and royalties are something very interesting in terms of cash flow. Brands can become “partners” with their users, assisting them in the resale process in a way that was never before possible.

Previously, products that enabled a private marketplace system required extremely complex development. As an example, Uber has a product with a private system for users to track activity, account balance, and more. Developing this platform required an exceptional amount of forethought in order to nail the functionality. Now that businesses are moving in the user-owned direction, NFT marketplaces simplify this process, provide a place to conduct business and make it easy to capture the secondary market across different products. Businesses will need to create their own marketplace to capture the market and excel.

I believe it’s only a matter of time until everything becomes secondary market-focused. This feels like a natural progression of the industry, especially when you examine free mint trends and other new strategies around NFT launches. The real value will come as the growth of a project leads to more visibility and increased secondary market traction.

NFTs are more than digital collectibles. This technology has the potential to disrupt SaaS product offerings and a range of other business models across industries. Much of this disruption is based on the reality that these products are marketplaces, and NFTs significantly boost the power of marketplace ecosystems. This will allow businesses to have full control over their digital assets, tap into the true power of blockchain, access more revenue through the secondary market, and optimize business processes. As the NFT market continues to grow, we can expect to see more and more SaaS products deploy NFT infrastructure.

New business models are being formed around blockchain offerings that will be duplicated and advanced in the years ahead. At my company Liteflow, we are helping creators and business owners explore Web3 and tap into new revenue models using NFT infrastructure. If you’d like to book a demo, we’d be delighted to explore how to bring your Web3 ideas to life!

This transformation is founded on a new ability for businesses and consumers to truly own their digital creations and contributions. In Web2 spaces, nothing belongs to the users, making ownership less of a consideration. As we move deeper into the decentralized internet and users better understand the value of their digital assets and engagement, a future exists in which all of these things become non-fungible tokens (NFTs).

Really?!? Everything will become an NFT?

Yes. This might seem like a very bold statement in 2023. The mainstream understanding of NFTs is narrow and focused on the use case of digital art and collectibles. To draw a parallel, limiting the scope of NFTs to art is like limiting mobile apps to weather or clocks. The underlying technology and range of uses for an NFT are as limitless as a mobile app. A world will exist in which companies across every industry incorporate NFTs into their business model, as global internet users interact with NFTs on a blockchain without thinking twice. 

How is this possible?

Decentralization empowers businesses and consumers through peer-to-peer interactions and true ownership without the need for intermediaries. This very concept naturally inspires participation and contribution, as the rewards and incentives associated with ownership are massive. 

As Web2 internet users, our contributions in the form of user-generated content (UGC) and social engagement have fueled adoption across countless platforms and applications. This is why UGC is one of the most obvious use cases for NFTs. But what is possible when you look beyond the obvious? 

The first thing you’ll realize is the misconception that every NFT needs to be sold. Providing proof is a more transformative use case than basic commerce, enabling things like proof of work to change how we collaborate. Secondly, verification of authenticity and ownership makes it possible to track and transfer this ownership, facilitating the resale of licenses and the recall of historical data to improve user experience.  

What else can really be turned into an NFT?

Project management tools

Project management tools like Trello, Jira, or Github are widely used by businesses to help teams collaborate and fulfill project deliverables. Turning these cards into NFTs that store all the relevant information and add utility would change how we collaborate. For example, attaching a “bounty” to a task so people that purchase it could complete the task to claim the bounty. 

Documents

Standard documents, spreadsheets, and presentations within Google, Microsoft, or any other platform are great use cases for NFTs. Creating these documents and simultaneously minting them to your wallet allows true ownership over this content that would otherwise exist behind a private Web2 account. 

Digital Receipts

Anytime a purchase is made online, a digital copy of the receipt is provided to the customer. This is a perfect opportunity to integrate NFTs. Verifying the authenticity of the purchase, accessing member loyalty rewards, and deepening the customer experience are just a few of the value propositions made possible with NFT receipts. 

Online Services

Access to online services is simplified and improved using NFTs. Whether it is the easy act of verifying access to the subscription or the never-before-seen ability to transfer or sell this access, remember that Audible or Spotify account you stopped using? Why not sell your yearly subscription to someone who wants it, and recoup some of your funds? 

Software Licenses

Similar to online services, software licenses make access verification easier. Beyond access, the ability to maintain a history of the apps you’ve installed is similar to the functionality of an apple or google app store. 

Your Company

Your company can exist as an NFT, and a pretty powerful one at that! This use allows ownership to be securely stored and transferred without an intermediary. NFTs also allow for the valuation of the company. 

These examples are just a few of the emerging uses for NFTs and how the technology can transform our online experiences, work processes, and business models. At the heart of this is an understanding of how blockchain enables true ownership of creations and contributions, something we will see accelerates as everything becomes a non-fungible token (NFT).

An opportunity exists for businesses to start creating the foundation of Web3 experiences, and NFTs are the building blocks. New business models are being formed around blockchain offerings that will be duplicated and advanced in the years ahead. At my company Liteflow, we are helping creators and business owners own their revenue models for the internet’s next era by bringing the flexibility of building Web3 projects according to a project’s unique needs.

Utility-specific tokens exist to help execute specific functions or deliver access to products or services, representing the majority of tokens created for initial coin offerings (ICOs). While these specific utility tokens help generate interest and value around a product, all fungible tokens can have utility baked in. Most serious projects with a dedicated token are exploring the possibilities enabled via their token. 

For most of these projects, NFTs offer the same or improved functionality without the need for a fungible token. In fact, NFTs have the potential to replace FTs in many instances, especially as advancements are made to blockchain technology. Some might not see this potential for NFTs, but once you recognize it, there’s no turning back. 

Let’s take a closer look…

Fungible Tokens vs. Non-Fungible Tokens

To understand precisely how an NFT can be used to deliver utility in place of a FT, you must understand the difference. 

• Fungible Token - An interchangeable asset on a blockchain, such as an ERC-20, with each coin or token possessing the same value as every other coin of the same type. 

• Non-Fungible Token - An asset on a blockchain, such as an ERC-721, featuring unique identification codes and metadata, distinguishing it from all other tokens.

The current ecosystem and state of technology bring out a more stark contrast between these two assets, as storage and network processing makes it difficult for NFTs to overtake FTs in all utility. I believe this will change over time as we begin to see that NFTs can become as granular or more granular than FTs. 

NFTs can possess more detail than FTs due to properties added by the creator, more traceability due to the unique identifier associated with each asset, and an ability to represent both a balance or a singularly identifiable asset. This combination makes NFTs a great “access pass” for products with features, allowing projects with specific product plans to incorporate NFTs as access verification (something I’ll explore a bit later).

The current understanding is that FTs are a necessity when deeper utility is needed, but that is changing as more becomes possible with blockchain. NFTs aren’t going to replace Ethereum’s use of ETH to maintain the network or DEXs like Uniswap that use their native token UNI to facilitate all platform processes and impact governance any time soon. But, for most projects, this level of utility is not needed, and NFTs possess more than enough power to deliver utility effectively.

How Can NFTs Replace Token Utility?

We’re still just scratching the surface of what both fungible and non-fungible tokens are capable of. Where we’re at now is far different from where we’re going, meaning NFT utility will only deepen over time. Currently, NFTs present the best solution for offerings that are based on yes/no answers. 

For utility that requires an account balance (i.e., 500 tokens in the wallet to access a feature), FTs currently make more sense. However, holding a balance of NFTs is certainly possible, as users can collect several tokens and easily verify ownership of each asset. Even using NFTs to quantify a balance shifts the focus from the total number to the unique individual assets. 

Despite the potential here, I want to focus on the current power of NFTs as a replacement for FT utility. If a user can access a product, feature, service, or can’t, then NFTs are more effective than FTs. These binary offerings are some of the most commonly utilized among Web3 companies. Here are just a few examples of how NFTs can be used to deliver access…

• Visualizing Content: Permit NFT hodlers to access exclusive gated content while engaging with your brand or community in a more substantial way. Perhaps you are releasing weekly podcasts or providing educational resources for blockchain enthusiasts. No matter the content, NFTs enable access for verifiable hodlers. 

• Applying Discounts: This utility allows hodlers to receive product or service discounts, similar to a coupon code. Discounts can be enabled as soon as an NFT is verified in a user’s wallet. There is some potential for granularity here depending on the NFT’s traits or the number of NFTs a user holds.

• Dashboard Access: NFTs are a great way to grant access to a dedicated dashboard or platform by verifying the NFTs held in a user’s wallet. This functionality doesn’t need to be developed from the launch of an NFT collection, as dApps can be developed after the collection launch to use the initial NFTs as an access pass.

• Product & Service Subscriptions: Subscription NFTs are being utilized to enable products and services provided by Web3 companies. The NFT is purchased or obtained by the user, who then pays a recurring fee to maintain access to the subscription. This could be access to a discord channel or NFT infrastructure like we provide at Liteflow.

NFTs are the Future of Token Utility

A misunderstanding still exists around the power and potential of NFTs, as new projects believe they need a fungible token to assist with utility delivery. I see a future where NFTs are seamlessly applied to all of our content and online engagement. Saas products and virtual experiences will be reimagined using NFT infrastructure without the need for some fungible tokens.  

This utility potential highlights how NFTs are a product and a digital asset that can be applied to Web3 experiences. A significant majority of blockchain transactions are already carried out for products and not the trading of digital currencies. NFTs are already dynamic tools that enable access to a feature, product, piece of content, platform, or more. Any feature similar to a Web2 Saas product can be accessed using NFTs. 

As brands begin to witness the product potential that NFTs represent, we will see the future of token utility shift away from FTs. It will take many things to get there, including the repurposing of some tools to accommodate NFTs and simplified products for mass adoption. Over time, I expect to see NFTs become the building blocks of Web3, and utility is a major component of this. 

If you’re interested in deepening the utility potential of your NFT collection or how to bring new utility to your token, just reach out! At my company Liteflow, we bring the flexibility of building web3 projects according to your needs while helping you own your revenue model for the internet’s next era.

Launching a crypto or NFT project is no different from any other business. You must think about sales and marketing. The beautiful thing is that blockchain-specific marketing tactics now exist that can give projects an advantage over non-Web3 businesses. Brands must find the tools that match your business model, as you will need to bring users into your ecosystem. Even with a great business model, you're dead if you don’t have marketing or sales. 

Marketing & Sales 101

Tackling marketing requires a number of different components, but arguably the most important is your target audience. Whether Web2 or Web3, all businesses must segment their audience and reach out to them. This results in an interesting chicken and egg scenario, as the challenge with segmentation is the need to have an audience to have data, which you can then analyze and improve your audience with. 

Blockchain makes this process much easier. All Web3 audiences and their unique behavior is accessible as open data, which you can extract your ideal persona from without having built the audience yourself yet. 

Transparency of Data

Much of the current blockchain marketing landscape is fueled by the transparency of public on-chain data. The data needed is readily available and can be extracted to drive marketing campaigns in really unique ways. For example, if you launch a project and don’t have audience data, you can look to similar projects for this information. Whether it’s a similar NFT collection or another related project, it is possible to extract lists of wallets that minted or hold a token. 

With the help of a qualified developer, on-chain data can be extracted and used creatively within marketing campaigns. By conducting a competitive analysis and extracting these initial minters and current owners, projects can hyper-target users that fit their ideal profile. The detailed data derived from this process can highlight which users are long-term versus short-term.

Nansen AI is an excellent example of the type of analytics powered by blockchain data. Using Nansen, projects can follow the “smart money”, watching where your target investors move funds. Similarly, it is possible to track holders of a specific NFT or token in order to make informed decisions about what is acquiring and retaining your target audience. This type of analytics tool illuminates targeted audience data in ways previously unobtainable. 

All of this is made possible by examining the wallet address data extracted. Wallet addresses are crucial to developing interesting marketing strategies because of how specific you can get.

How to Market to Wallet Addresses

As soon as audience data is collected via wallet addresses, the next step is to get in front of these users. The wallet address is an integral part of the marketing process, with many emerging tools on the market to reach your newly found audience. It is relatively easy to reach out to these people depending on what works for your business. The tools available make this process very powerful. 

ENS domains offer decentralized naming for wallets, and the most heavily utilized blockchain naming standard. These domains are used to replace the long string of characters contained in a wallet address. They can help illuminate where your audience is across social media and other platforms, as users showcase their domain publicly. Once you have the ENS name for a user, you can seek out where these users engage and approach them with DMs for a direct chat. 

Skiff is another Web3 platform that enables anyone to send and receive emails directly to wallet addresses. An end-to-end encrypted solution, Skiff is an open-source and private email tool similar to Gsuite, and the perfect solution for email marketing campaigns to wallet addresses. Once you have your audience's wallet addresses, reach out via Skiff to spark a conversation.

Wallet messaging strategy doesn’t need to end with wallet-to-wallet email. Web3 chat products enable marketing communication between wallets, fully encrypted and from multiple devices. Blockscan is an example of one such product providing this service. At Liteflow, we are preparing to launch our own chat system infrastructure. Web3 businesses can use our chat solution to instantly communicate with their audience for marketing purposes, but also with their community and team.

Of all the marketing tactics utilized in Web3, airdrops are one of the most widely used. This process entails “airdropping” an NFT into a user’s wallet. Many projects airdrop their tokens to increase holders, but the advertising potential here is massive. Your NFT airdrop can function like an ad that populates in a user's wallet, generating awareness and potentially acquiring new users. 

Want to target all of the whales holding a certain project? Or maybe you only want to engage wallets that have been active within the past three weeks. Wallet address data enables all of this and more, thanks to these emerging tools that make use of on-chain data to fuel marketing. 

Web3 is just getting started. New solutions are emerging that will change the way we market to our target audience and acquire new customers. NFT and crypto projects should explore these marketing transformations and learn how to incorporate them into your business models. As the industry progresses, we will see how these tools develop and which tactics are the most successful. 

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If you’re interested in exploring how to take control of your Web3 business model and onboard your target users, just reach out! At Liteflow, we bring the flexibility of building web3 projects according to your needs, while helping you own your revenue model for the internet’s next era.

NFT utility is now a major focus for those building in the space. The most recent example of this is the emergence of subscription NFTs, which represent a massive revenue opportunity for web3 businesses. 

What is a Subscription NFT?

With subscription NFTs, you don’t necessarily pay for ownership of the digital asset but rather the services associated with it. This is similar to any monthly subscription service, in which users pay a recurring fee for access. An example would be community discord membership, with access only provided to those that hold the NFT and pay the subscription fees.

The potential here is huge, as subscription NFTs unlock new potential business models for web3 projects. As secondary market royalties become less reliable, businesses are seeking new ways to sustainably finance their projects. Old models incentivized high trading volume to generate royalties, but subscription NFTs inspire long-term users with a real interest in a project’s offerings. 

A great example of a company driving innovation around subscription NFTs is Unlock Protocol. Unlock is helping web3 communities launch their own membership programs using NFTs as keys to unlock gated content and experiences. Unlock Protocol was created “to provide an open, shared infrastructure for memberships that removes friction, increases conversion, enables scale, reduces costs, and evolves the web from a business model built on attention toward one based on membership.”

This is a great example of what subscription NFTs represent in the future of web3. There is an opportunity to deploy business models focused on sustainable growth of communal value.

Focusing on Customer Lifetime Value (LTV)

Where NFT projects were once reliant on quick flippers to pump the trading volume, now focus can be applied to acquiring the right users with more LTV. NFT flippers represent a massive churn rate for projects, always looking for an opportunity to sell and jump to the next trade. This is not a good fit for businesses aiming to acquire long-term users, as a user base of flippers changes by the minute.

Now that creator royalties are being phased out, businesses require community members that add value over time. This is where inspiration from proven web2 business models can be helpful. As I see it, subscription NFTs currently represents one of the most sustainable revenue options for web3 projects. 

Where most NFT value has been driven by hype and virality, subscription NFTs derive their value from utility. This attracts customers that are interested in the subscription offerings, making them more likely to remain engaged for the long run. LTV goes even further when you consider how some D2C SaaS products are used by consumers. 

Netflix users frequently add their friends and family, making it easy to handoff subscription ownership when one user no longer wants to pay. While the end user might be changing, the subscription is remaining active which is the most important thing for the business. Subscription NFTs incentivize similar behavior, retaining value should the owner choose to resell. For the first time, this creates a vibrant secondary market for subscription resellers, a value proposition that most subscribers would love to see. 

The Power of NFT Subscriptions

We’ve all had membership to one organization or another, whether it’s the local gym or a company Slack account. While membership experiences vary, there is one challenge that is consistent across subscriptions…an inability to resell. I’m sure we’ve all looked back on a yearly subscription that went unused thinking how great a refund would be. Until now, we as members have been stuck with our subscriptions.

NFTs are shifting this paradigm, allowing membership access to be resold. This sustains the value beyond one user and opens the door to new opportunities for value creation. Members can now “own” their subscription as an NFT, selling access and forfeiting membership whenever they’d like. This utility helps NFTs retain the core value associated with the subscription offerings, and adds a layer of value based on the NFT’s unique history. 

As resellers list their subscriptions on secondary markets, value will be attributed to the historic data retained in this asset. Perhaps it has a year membership pre-paid, or it comes with five years of subscription content. Projects can even factor this into their NFTs, delivering more access to NFTs with the longest active subscription. 

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Web3 represents a world of new opportunities for brands and creators. I believe that some proven web2 business models can be adapted and improved upon using web3 infrastructure and tooling. Subscriptions have fueled both B2B and D2C web2 revenue models for years and will continue to remain relevant well into the future. NFTs elevate subscriptions by deepening ownership and retaining value for the end users. This is why web3 projects with true utility should be exploring subscription NFTs to drive revenue and growth.

We are true believers in NFT subscriptions over at my company, Liteflow. So much so that we are working on a subscription model for our own business. Soon, our customers will purchase an NFT from us and pay a subscription fee, gaining access to our web3 infrastructure solutions. If you’re interested in learning more, and how you can explore the same business model, just reach out! At Liteflow, we bring the flexibility of building web3 projects according to your needs, while helping you own your revenue model for the internet’s next era. 

Every NFT marketplace collects fees for platform revenue, gas, and creator royalties. Most view this functionality as a bland necessity to help keep the platform running. As we move into the future of Web3, and the NFT space continues to transform, platform fees will become a much more active and nuanced feature for businesses to use creatively. 

NFT marketplaces are not static, but lively ecosystems with room for customization and varying experiences. Fees might not seem like the most obvious feature for deep customization, but NFT projects can gamify them to boost activity and motivate users to spend more time and money. 

Many existing marketplaces try to simplify fees, touting a transaction fee of around 1-2.5% on average, with customizable creator royalties usually up to 10%. These specific fees vary, and some platforms use the opportunity to promote their low fees to users. Beyond this, not much is being done to make fees dynamic for gamified.

I see this as a missed opportunity, especially for NFT projects that own their marketplace. Conditional fees can unlock new opportunities for projects to increase users, engage audiences, and incentivize growth. 

How to Set Web3 Platform Fees

We are still in the early days of this concept, but web3 projects already have options in the area of platform fee customization. This power lives hand-in-hand with ownership of a dedicated platform, something I believe every web3 project should be exploring. Owning your platform makes it easier to take control of your business model, including the customization of fees.

Let’s get into the fun stuff…

Conditional fees can be best understood as a way to gamify your platform activity. Instead of applying a blanket fee to buyers and sellers based on the amount of their transaction, it’s possible to tailor these fees to your community and provide a unique web3 experience. For a better idea, consider these examples…

• Reward Loyalty: Give a 20% discount on fees to users who have been active for more than six months.

• Weekly Promotions: Free Friday!!! Set your platform fees to 0% every Friday for all users.

• Monthly Promotions: NFT of the month! A specific collection gets a reduced fee all month long.

• Add Token Utility: 50% discount for users that hold yours or a partner’s token.

• Incentivize Trading: Apply a degressive fee based on trading volume,  i.e. user X invested $10k and receives a 1% fee reduction. 

• Promote Partners: An exclusive fee for your partner’s collections, bringing their community to you. 

• Reward Referrals: Refer 20 people and get a 1% off fee, refer 100 people and get a 0% fee on the next purchase.

These examples are just a glimpse into what is becoming possible with NFT marketplace customization. Not only can businesses deploy a platform with a customized front end and exclusive NFT assets, but the experience and reward mechanisms can be customized as well. 

Why Conditional NFT Platform Fees

The possibilities should be more clear, but what are the benefits of conditional fees? Incentives created when discounting fees and unique experiences provided to your community can help in three specific ways…

NFT Marketing Strategy

Marketing in the blockchain space is challenging. The audience has yet to go mainstream, users approach projects with a degree of healthy skepticism and fraudulent actors take advantage of projects with a marketing budget. Simply put, there is no clear path to marketing success in Web3. 

Offering dynamic discounts to users on web3 platforms can be a key differentiator. The value proposition presents the chance for a strong marketing campaign that excites new users. Everyone loves fun promotions and being rewarded for their activity, yet most platforms don’t offer this option. Consider the many ways to cut through the noise and stand out by turning your fees into a selling point that acquires users.  

NFT Collection Engagement Strategy

Platform users aren’t created equal. Some users will actively participate and engage, while others will connect their wallet once or twice and never return. Incentives via discounted fees inspire more engagement due to the opportunity to save. Active users will remain active and average users might increase activity knowing they can buy and sell NFTs for less money. 

NFT projects can use fees to encourage specific types of engagement on the platform. Whether you want to promote your partner’s collection or push for lots of volume one day a week, conditional fees make it possible for users to pay less by getting involved. 

Accelerate Web3 Growth

The goal is always growth, but it's a lot easier said than done. Whether operating in web2 or web3, creative tactics are required to achieve platform growth. Gamifying activity is a clever way to incentivize growth, as users share in a fun experience while assisting in the scaling of the platform. The broad appeal of promotions can’t be ignored, especially in web3, where financial interests permeate the hearts and minds of many users. 

Attracting web3 users becomes easier when the financial incentive is clear. As your dedicated community members realize the saving potential of conditional fees, they will likely shout from the rooftops to help grow the platform. You might be “losing” on a little short-term revenue by applying discounts, but this will be outweighed by long-term gains via retention and engagement.

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Platform fees can be much more interesting than many believe. As we build new virtual worlds and web3 adoption increases, there is so much room for innovation. Bringing NFT ideas to life and creating entirely new ecosystems should be fun without the limitations imposed by web2 or IRL mindsets. Conditional platform fees are the perfect example of what can be explored using the power of blockchain to create valuable experiences for users.

If you’re interested in exploring how to deploy engaging new web3 experiences and deepen the value created for your NFT community, just reach out! At Liteflow, we bring the flexibility of building web3 projects according to your needs, while helping you own your revenue model for the internet’s next era. 

As a builder and Web3 business owner, I’ve seen the power of community wallets firsthand. Some of you reading this might have already seen or engaged with similar strategies. Deploying a community wallet incentivizes engagement while serving as a great marketing device to gain visibility and increase traction. NFT Marketplaces are at the heart of this strategy, with projects that own their marketplace taking control of their business model and preparing for long-term success in the space.

Instead of battling for users by offering the lowest platform fees, use these fees to your advantage. The battle to 0% fees benefits no one, as projects struggle to generate revenue and users miss out on platform development and better experiences made possible by the platform revenue generated. Instead of fighting this losing battle, a community wallet can become your secret weapon by appealing to users in a different way.

What’s a Community Wallet?

A community wallet is a mechanism built into NFT marketplaces to financially reward active members for their participation and engagement. Funds accumulate through platform fees, but instead of rewarding founders, the revenue generated is paid out to community members. There are many ways to execute this strategy, and it’s a great opportunity to get creative around marketing and engagement.

Perhaps the most well-known example of a community wallet comes from LooksRare. This decentralized NFT marketplace prioritizes their community by rewarding traders, stakers, creators, and collectors for participation. LooksRare redistributes the 2% platform fee collected with each transaction to platform users that stake the LOOKS token. In addition to the 100% of wETH collected and redistributed to active participants, users earn LOOKS rewards by simply trading qualifying NFTs. This incentives trading volume above and beyond the rewards earned by staking.

I love this example of a community wallet in action, as LooksRare got creative with their approach and benefited massively from the exposure it generated. Seemingly overnight, the platform became a household name by deploying this strategy alongside potent messaging within the NFT space. At the time this was a novel concept, but now as the promise of creator royalties fades away, I believe this approach will become more common.

Gamifying Engagement & Acquisition

NFT communities are still largely driven by financial incentives and captivating communal experiences. Projects that deliver on these expectations can more easily acquire new members. Gamification through a community wallet kills two birds, financially rewarding participants in a fun way.

Every community has a different vision or mission. It is very powerful to look at your project’s goals and determine how a community wallet can advance them. The simplest execution of a community wallet is to collect platform fees and evenly redistribute to all participants. But more gamified approaches are possible with some creative thought.

Perhaps you want to incentivize trading volume and decide to reward the most active buyers and sellers on the platform with higher rewards. Or maybe you want your community to create and mint more NFTs in your marketplace, so you reward creators who generate the most sales. Gamifying your platform in a way that rewards the top players for their engagement is very powerful.

Again, this strategy is great for community engagement and marketing. When new prospects see an opportunity to earn in a fun way, you’ll capture their attention. The perception of getting cash back has always been a smart sales strategy, out delivering competitors in a cost-effective way. The NFT space is no different, and adjusting fees to gamify your community wallet can become a key differentiator when done effectively.

Learning from the DAO Treasury Model

A slight variation of this strategy is already being used by DAOs, collecting funds in one wallet and enabling redistribution. Typically in the DAO model, the use of funds is subject to vote, as DAO members all have influence over these decisions. As revenue and financial contributions are collected, members are all empowered by the chance to impact the trajectory of the DAO via votes on the use of funds.

This model being implemented by DAOs can serve as inspiration for other web3 projects seeking ways to empower the community. Community wallets put members in the driver’s seat, which is a powerful position to be in. The power inherent in financial decision-making incentivizes members to join certain communities for this access and remain engaged to ensure their voices are heard.

NFT creators and businesses exploring this technology are already losing control of their business models. This is due to the rapid evolution currently underway with blockchain still a new technology. A potent solution exists in ownership of marketplaces, and this can be made even stronger through creative use of the platform fees inherent in all marketplace applications.

Community wallets are just one example of the ways to play with platform fees and empower members in the process. When carried out successfully, projects can better control their royalties, incentivize engagement and improve acquisition.

If you’re interested in exploring how NFT marketplace infrastructure and tooling can unlock new ways to take control of your business model, schedule a live demo with Liteflow today.

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I know it's tough, but it’s time to wake up to the fact that there is absolutely no way to enforce royalties on the secondary market.

As soon as an NFT is minted to the wallet of the user that initiated the first transaction, the enforcing of royalties falls in the hands of the marketplace. Until recently, some took this for granted. But, Sudoswap has emerged as a royalty-free NFT marketplace, a potential sign of what’s to come. Their launch has demonstrated the market demand for this type of platform, already doing over $30 million in volume. In less than a month they have achieved about a 16% market share compared to OpenSea.

Now, traders can bypass creators and transact without handing over fees that commonly range between 2.5-10%. This is a no-brainer for collectors and traders because it simplifies the transaction process and eliminates a fee, increasing profits. When you consider high-value transactions, these fees add up. Take for example Bored Ape Yacht Club. The current BAYC floor is 80 ETH, meaning the savings collected by eliminating the 2.5% royalty fee equals 2 ETH.

Sure, some well-intentioned collectors will choose to support creators by opting into royalties, but the majority of humans want to save money and increase profits. This changes the trajectory of revenue for NFT creators, but is that necessarily a bad thing?

Marketplaces Wield the Power

The choice to grant royalties to creators will now come down to the marketplaces facilitating transactions. At the protocol level, something living on the blockchain doesn't enforce royalties. Private applications such as OpenSea, which is not decentralized, can choose to remain compatible with royalty standards. X2Y2 NFT marketplace is already exploring the possibilities, allowing users to choose the amount of royalties contributed to projects.

The power balance is shifting, and it demonstrates the value that marketplaces represent. These ecosystems are the epicenter of NFT commerce. While the standard royalty payments remain consistent among the leading marketplaces, applications will continue to arise that provide options to traders. It’s becoming the creator’s responsibility to send their audience to the right marketplace, similar to sharing an affiliate marketing link.

Since the asset lives on-chain, it is everywhere at the same time. But there is still the power to promote the platform on which you hope to direct sales. As applications choose whether or not to collect royalties, creators choose where to prioritize their listings. I believe the winners will be the applications that simplify the process for users, as no one wants to opt into a more challenging and time-consuming process.

It’s Time to Get Creative

I love this discussion of royalties because it forces us to push for new ways of monetization. For many, one of the biggest value propositions of NFTs was the ability to payout creators indefinitely through royalties. There was an expectation that each secondary sale would deliver passive income well into the future. This led to an incentive for projects to reach high trading volume. So, when the collection rug pulled everyone, causing a massive selloff, the creators could still profit massively.

So let’s start thinking about this issue creatively. Let’s assume no one is paying royalties. How can we still reward creators? It’s a deeper discussion than just accepting no royalties. It’s about unlocking ways to control your business model as a creator. Some of the answers might not be enforceable in every context, but we still have power over how we monetize.

I believe that royalties will completely disappear, and everything will be baked into platform fees. These platforms will likely offer some type of cashback system, in which contributors and shareholders receive their percentage of platform fees. This process would require deals between creators and platforms, ensuring that creators get their cut for bringing a new audience to the platform.

Taking Ownership of Your Business Model

The proliferation of creator-owned marketplaces is another emerging trend. These dedicated platforms will provide customization around fees, enabling the creator to take control of their business model. Sales are bound to occur outside of these dedicated ecosystems, bypassing fees through processes like OTC. Regardless, taking ownership of your business model as a creator starts with owning your storefront and redirecting your audience to platforms that you have more control over.

These creator and community-driven platforms provide a big opportunity to use the shifting dynamics to the advantage of all participants. For example, the creator can set 20% fees on the platform, redirecting a cut to a community fund. This becomes a marketing power, incentivizing users to utilize the platform and gain access to this income through participation. This is where things get really interesting and creative.

While the topic of royalties is just now gaining traction, it has been something I’ve been focused on for nearly a year. At my company Liteflow, we are working to help businesses position themselves for long-term success in the space. From our perspective, this starts by taking control of your business model by deploying an NFT marketplace with help from our infrastructure and tooling.

We love being able to help any business grow using NFTs, and marketplaces represent one of the biggest opportunities for sustainable growth in Web3. If you’re interested in bringing your ideas to life, reach out to us at Liteflow or through my Twitter @antho1404.

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It didn’t take long for us to decide where to place our focus. We wanted to use our knowledge as a resource for businesses to understand blockchain and start building in the space. This desire to become a resource for others goes back to my SaaS days, providing the tools for businesses to build whatever they want. I love being able to say “look at this business or person making a living in part thanks to my solution or my services.” That’s powerful.

NFTs quickly became a focal point, as our interest grew alongside the industry’s interest. It wasn’t just digital art and community building that excited us, but the long-term vision for NFTs. As a software developer, it’s really interesting to see how NFTs can transform your perspective of architecture or software. Once we experienced this “aha” moment, we went all in on this path, which led to Liteflow. Now, two years in, there is a lot of knowledge to share from our experiences.

Challenges When Entering the NFT Space

The major challenges are definitely the technical aspects of this industry. Just last week I was speaking with a friend who managed a few companies and wanted to launch an NFT. His first thought was “We don’t really know how to do that…like how can we do this kind of thing?” This is coming from someone who has been in the space for quite some time. The technical challenges are real, and he was just talking about launching an NFT collection. That doesn’t even include the critical components of adding utility or factoring an exchange with your products. Things start to get complex very quickly.

Eventually the ecosystem will become mature enough that simplification occurs, and everyone can easily participate. This is really one of our primary focuses right now. Building the infrastructure and tooling that makes it as simple as possible for people so they don’t have to worry about the complexity of blockchain. Whatever those worries concern, transaction processes, decentralized exchanges, the differences between ERC 1155 and ERC 721 token standards. We are working on technology that eliminates these technical challenges while still maintaining extremely capable and secure technology on the blockchain to future-proof applications for everyone.

A major consideration here is how infrastructure can be built in a way that increases adoption and reduces the learning curve for businesses and their developers. This is making it much easier to do great work really quickly. Doing this in a way that is future-proof requires extreme focus on developments in Web3, new features, new business models, new ways that technology is being created. For example, it’s becoming increasingly clear that the future is multi-chain. This requires new ways to make the experience seamless, no matter the chain. We are really dedicated to providing this flexibility, ensuring that the switch from chain to chain is not a massive disruptor for a business.

Misunderstandings Around NFT Marketplaces

Many people see the big marketplaces as the only place to go. It’s similar to how people migrated to eBay or Amazon to buy their stuff. These platforms are definitely necessary, and will always exist in some capacity. We need aggregators of all different types of products and offers. People tend to forget the value in owning your own space, and this is still something very new in Web3.

Take Shopify for example, the power of these self-run internet storefronts is massive. Marketplaces don’t always need to be one central point where everything exists. There are huge benefits to smaller shops inside of the larger ecosystem. It’s not complicated, but fear exists around the comparisons and the need to compete. When you believe you are up against a massive product with thousands of features, it can seem impossible to catch up. The truth is that you don’t need the same functionality to build something incredibly powerful for you and your community.

This is the beauty of blockchain. You can have smaller decentralized entities that are accessible via multiple places. You can have your big central hub, and all of the more niche offshoots. I think this thought process comes from our Web2 brains. Just because you own a marketplace with its own settings, doesn’t mean that others have to operate in the same way. Remember, a Web3 marketplace is really an aggregator, pulling in assets that live on the blockchain, so they can exist everywhere if you want them to. This is a massive opportunity for smaller, more niche players to build something special and valuable without worrying about what the big marketplaces are doing.

If you’re looking to build in Web3, I would say anytime is the right time. Many people are concerned about the market being down, but these conditions remove people who are just here for money. NFTs are going to explode eventually. Maybe not in the way people think with insane valuations, but in terms of Web3 adoption.

We still wake up everyday passionate about helping companies build and launch Web3 products. Even when you consider the scope of the creator economy, it isn’t just businesses, its small creators. We love being able to really help anyone grow using NFTs. If you’re exploring NFTs or Web3 products, we’re here to help bring your ideas to life.

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Now, as we look to the future in Web3, it’s clear that value creation, growth, and ownership is the centerpiece of this new internet. Both individual and communal value can be captured and exchanged, unlike ever before, and we as the participants should seek solutions that maintain and reward our contributions. Otherwise, we risk falling back into a centralized system of ownership. 

As someone who has been at the forefront of blockchain exploration for almost a decade, I’ve been very focused on the power of community-owned marketplaces. These dedicated ecosystems will broaden our concept of value and enable businesses and their communities to maintain true ownership of what they create. 

Just take a look back at history. The marketplace has always been a hub for communal activity and empowerment. As we approach this new frontier of the internet, I believe a new appreciation for marketplace ecosystems will emerge. NFT marketplaces go beyond OpenSea or Rarible. They are virtual hubs for businesses and their communities to own, grow, and exchange value. All with no need for middlemen or external forces that siphon this value. 

As blockchain adoption continues to unfold over the next several years, the power of decentralized community-owned ecosystems will become increasingly clear. 

What Does Ownership in Web3 Mean?

From tokens to dapps, individual and communal ownership is central to decentralization. The Web3 space is still maturing, but ownership has been inherent since day one. A commonly shared mission among builders in this industry is to enable users to liberate themselves from censorship and take control of their digital footprint. 

The claiming of ownership starts with self-sovereign identities (SSI). Web2 digital identities are linked to centralized email accounts and handed over to countless platforms for potential exploitation. The big tech giants that collect our data continuously exploit their position by leveraging our personal information for their profit. They collect the value we provide and sell it without compensating us. 

Web3 flips this concept, using SSI managed through decentralized wallets and encrypted private keys. This returns ownership of identity to users who can pick and choose what personal information is shared with which site. Now, mechanisms are being developed that empower users to earn from the value they provide in the form of data, content or engagement. All of this is being executed through P2P connectivity across networks rather than centralized servers, returning the power to individuals. 

Non-fungible tokens (NFTs) are a critical component of Web3, functioning as a primary asset class that enables decentralized ownership and trade. While the mainstream understanding of NFTs is based in the world of digital art, these assets will eventually become the foundation of all internet content, commerce, and community membership. 

With this in mind, it is important to evaluate how we as users and communities can help ensure total ownership of our assets and the value that they represent. Dedicated NFT marketplaces that facilitate the creation and exchange of these assets are necessary to this discussion. This is because centralized forces continue to seek control of what is being created by emerging Web3 communities. 

Take Control of Your Business Model

With true ownership at the heart of Web3 communities, far too many are handing over control to centralized platforms like OpenSea. This is counterproductive in a decentralized system, when solutions exist that make centralization obsolete. We no longer have a need for middlemen, and businesses should consider the potential use for fees and user engagement lost to NFT marketplaces. 

The 2.5% fee taken by OpenSea on every transaction could easily be used or redistributed among your community. Afterall, it is your business and community that is creating and exchanging the value, to begin with. Why operate at the mercy of a 3rd party platform that extracts value and can censor you without a moment’s notice. Blockchain eliminates the need for these ecosystems and positions every company to exert total control over their business model. 

What we build now will impact our trajectory and market share over the next several years. Now is the time to build with ownership of our business models in mind, as these revenue streams can fuel our communities for years to come.

Providing a Hub for Users to Experience

New virtual worlds and ecosystems are being built as we speak, and NFTs are the building blocks. As NFTs populate these ecosystems and metaverses, our communities seek hubs to create, trade, and engage with others. Expectations are changing, and users seek new brand experiences that connect them while ensuring their contribution is captured and reciprocated. 

Instead of hand delivering our communities to 3rd party sites, the alternative should be strongly considered. Our communities deserve a dedicated ecosystem that prioritizes ownership and empowers participants to contribute and share in experiences. This is an extension of Web3 ownership, as the participants fully own everything from the community to the assets to the ecosystem. If we are creating our value as a community, we should also manage and own the platform on which we engage and grow that value.

The foundation for the internet’s third phase is being constructed as we speak. What we build for ourselves and our community during these early years of Web3 will position us for everything that follows. As this shift begins to restore balance by rewarding the creators and communities that deliver value, it's important not to lose sight of the significance that our virtual spaces have. Our businesses and communities should not be taken for granted. By building dedicated ecosystems that empower these communities to engage and grow, we ensure that our collective value is not siphoned but rather reinvested into those who participate and make that value possible.