Are Corporations Changing the Way We View NFTs?
With the NFT market continuing to stagnant, it appears that NFT collections run by corporate institutions are doing surprisingly well compared to their more decentralized counterparts which have been in a freefall since the middle of 2022.
Although NFTs still conjure up divisive opinions and scathing ridicule among most people, corporations seem to have discovered the trick to making them work - accessibility.
Starbucks and Reddit NFTs
Starbucks and Reddit have been responsible for some of the most successful corporate NFTs, with major onboarding coming especially from Reddit which has found a way to adapt its mascot, Snoo, into a variety of different themes for users.
While the Reddit collection does little in terms of utility (which is often used to measure an NFTs value), it provides an additional element of excitement and profile-building for Reddit users due to the website’s built-in wallet, making user onboarding easier.
Unlike Reddit’s vast collection of Snoo accessories, Starbucks has taken a different approach focusing more on the utility of their NFTs by incorporating the tokens into their loyalty rewards program, similar to regular coffee punch cards.
This approach has allowed the Starbucks collection to reach interesting valuations from collections that see the loyalty program as more than a gimmick, curious at its ability to evolve over time as a legitimate way for customers to receive additional benefits.
In fact, the collection has been so successful that many of the tokens are being sold for well over $1000 on the Polygon network as realistic benefits become more clear.
Are NFTs better when they are free?
The biggest takeaway from both collections, however, is the fact that they are initially free, thus mitigating a major criticism of NFTs; that is, they are seen as baseless products with no inherent value that requires coercion and gimmicks to sell.
Although Reddit offers additional NFT accessories for a price and Starbucks rewards require in-store purchases, one reason they are seeing success is that users don’t feel as if they are being tricked into buying an asset that is a scam. By being free, there is no risk for holders as they earn these corporatized NFTs, which mitigates a large concern that they are poor investment vehicles.
Amazon is joining the NFT space
All that being said, it appears that Amazon is joining the bandwagon with its own upcoming marketplace in April, according to a report from Blockworks. While details on the specifics are not entirely clear, it appears that Amazon might be following Reddit and Starbucks' lead with easy onboarding and a rewards program tied to in-store purchasing on the website.
If that’s the case, Amazon could be onto something interesting, considering it is the world’s largest online retailer and provides products of nearly all types to consumers around the world. What will be interesting is how these NFTs will affect sales and deals, and if those sales and deals will be swappable with other users considering that NFTs are not permanently stored in one’s wallet, unlike Soul-Bound Tokens.
Is it just a trend?
Amazon’s interest in NFTs and the past success generated by Reddit and Starbucks suggests that the types of over-valued tokens we saw in 2021 might have just been a fad in the larger picture of utilities and applications that NFTs are capable of.
Further, it suggests that NFTs as an investment could also be a thing of the past as more and more companies continue to offer tokens for free. By reducing the financial risks associated with NFTs, public opinion could begin to sway to a more acceptable position that sees the tokens as something harmless and incomparable to the frenzy of scams and frauds that we’ve become accustomed to.
