Subscription NFTs are becoming more popular as brands give customers exclusive access and perks. In this article, we take a look at the growing popularity of NFT subscriptions.
But what is a subscription NFT, and do you need one in your life?
With subscription NFTs, you are not paying for digital asset ownership but the associated services. You can compare it to any monthly subscription service where users obtain entry through recurring payments. Users or customers must possess the NFT for the subscription to work. They can access specific services, rewards, perks, and so forth by proving their possession of the necessary NFT.
The potential of subscription NFTs is enormous as they open up unexplored business models for Web3 projects.
As secondary market royalties become less dependable, businesses seek novel strategies to finance their initiatives sustainably.
Subscription NFTs encourage long-term users with a genuine interest in a project’s offerings instead of older models that reward high trading volume to generate royalties.
Unlock Protocol is a fantastic example of a business pushing innovation around subscription NFTs. It uses NFTs as keys to unlock gated material and experiences for assisting Web3 communities in launching their membership programs.
People merely pay for access to memberships under the current business model. They do not own the membership; they can only control whether they decide to keep paying for the membership. Members, however, own their subscriptions under an NFT-based subscription business model. If it is a recurring subscription, they can no longer access those benefits once they stop paying. But even if they stop paying, they can still transfer their subscription to someone else.
Subscription NFTs give exclusive access to users when they link their crypto wallet to the company’s website and have the ownership verified. Shopify unveiled token gating in June 2022, which enables retailers with an NFT collection to grant customers access to goods or services if they possess a particular NFT.
Even in their retail stores, merchants can use these subscription NFTs to validate and transact business using their POS systems, as Doodles did at SXSW in March 2022.
Consider these as brand membership cards or VIP wristbands. But what are the advantages of e-commerce companies using NFT memberships?
Consumers in the modern era are way too used to subscription services. From Costco’s exclusive prices and goods to fast shipping and access to a streaming service with Amazon Prime, subscriptions are everywhere.
The only difference with subscription NFTs is that customers have a digital asset rather than a club card, VIP wristband, or membership permits.
Being an owner will give you perks like exclusive and early access to products or various membership levels that better meet your requirements.
But why should you adopt NFT subscriptions instead of traditional ones?
However, subscription NFTs are more than access to exclusive content and limited-edition goods. The primary benefit of subscription NFTs is the sense of community they foster. You’re cultivating a sense of belonging and connection among those who own your subscription NFTs.
Additionally, brand communities offer businesses a fantastic setting to try out new products on their most ardent supporters, get input on business plans, organize referral schemes to entice community members to help the brand acquire new clients, etc.
Let’s look at some companies’ innovative use of NFT-based subscription plans to engage with clients and offer them unique benefits.
The most notable example is BAYC membership, which entitles holders to exclusive perks, airdrops, and access to collaborative graffiti boards.
Another example is the Azuki NFT series. Owning an NFT from the collection grants access to their metaverse, Garden, where streetwear collaborations, NFT drops, and live events occur.
A0K1VERSE is another token-gated metaverse created by famous DJ and crypto advocate Steve Aoki. Passport NFT holders have access to exclusive metaverse events. There are six tiers of passports, each with a unique set of advantages.
VaynerSports Pass, another NFT project that Gary Vee co-founded, also has practical advantages. Owners can enter raffles to win tickets to big-time athletic events and get to meet athletes.
It’s critical to be conscious of a few common pitfalls even though using NFTs offers creators and communities control over the subscriptions:
Even though subscription NFTs have a lot to offer, obtaining a standard membership is still much easier and faster for most people. As with many Web3 innovations, the need for knowledge and skills to use the technology is one of the main obstacles to adoption. The number of companies that provide NFT subscriptions is still relatively small for the same reason.
As we continue to use the underlying blockchain technology to open up new opportunities, the NFT space is still evolving. Serious projects are moving narratives into a new realm of possible use cases and away from just being digital artwork.
Users and creators own the tech, which further decentralizes memberships. And businesses will transition from the Silicon Valley paradigm of owning everything to one where their subscribers own their subscriptions.
Brands and creators have a whole new world of possibilities thanks to Web3. Some tried-and-true Web2 business models can be modified and enhanced using Web3 technology and tooling.
Both B2B and D2C Web2 revenue strategies have long relied on subscriptions and will do so for a very long time. NFTs improve memberships by boosting end-user value retention and fostering a more profound sense of ownership.
As such, initiatives on Web3 focusing on utility will embrace subscription NFTs to generate income and expand.
We have only begun to brush the surface of subscription NFTs’ potential. The major takeaway is that NFTs aren’t a fad; instead, they’re steadily gaining popularity and are ripe for the pickings of visionaries.
The bottom line is; whether you’re a major brand looking to innovate or a content creator trying to expand your audience, integrating subscription NFTs is a pioneering way to interact with your community and reward your most loyal customers.
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