The embossing often occurs on the NFT community website. However, many projects target members of the NFT markets for secondary marketing, which takes place almost exclusively in markets such as OpenSea.
Nothing can prevent NFT communities (as users) from moving to large NFT markets. While blockchain is decentralized, Opensea, Coinbase and Metamask – for example – are highly centralized. Cryptopunks, Meebits and Solana Monkey Business are some of the few projects hosting their own brands, but Openea is still the NFT’s largest and most popular market, with sales of $ 22.73 billion through 1.3 million buyers. Using these major brands may be the status quo today, but don’t expect it to continue.
The need for more neutral decentralized services and platforms, such as community-hosted markets, is clear. The economic calculation that the NFT projects from hosting its own brands will soon change. With the emergence of new solutions in the white brand market, a market experience that users enjoy and trust can be achieved. In addition, as initial currency earnings run out, communities are increasingly demanding growing market value and seeking to increase acquisition rates. NFT projects will also prioritize hosting their brands to offer a better and more onboarding experience.
This move has significant implications for NFT buyers and existing NFT markets.
Why NFT communities do not host their own brands
At present, it is not very economical for NFT communities to host their own markets. Although there are several sticky white label solutions available on the market for common NFT communities – such as Kred, Bitski and Serotonin – they are not the only ones known as OpenSea and may not be as easy to use. That’s why teams often decide to build their own brands from the beginning. This is a more expensive operation because brands have many features (eg different auction styles, support for different payment methods). Achieving equity parity in large markets such as OpenSea has become even more difficult – and impossible for many.
In addition to costs, many communities are not motivated to increase secondary sales. License revenue from secondary sales is pale compared to currency revenue. Let’s say a project starts with 10,000 NFTs and gets five percent license fee from each secondary sale. Although the minimum price is twice the price of the coin, the selling amount should be NFT 100,000, which is 10 times the total size of the royalty collection to match the coin’s income. Few projects have seen such significant price appreciation and high business volume that secondary marketing is important.
In addition to the economy, it can also be difficult for communities to address user confidence concerns. Users may also be less willing to rely on a community-created NFT market than other NFT-tested markets, such as OpenSea. Unlike the creation of NFTs with standardized contracts, the potential gap in smart contracts for market transaction management is larger, which increases the risk for users.
White-market markets will change the calculation of the economy
Next year, we can expect white-labeled markets to offer users an attractive and safe experience. The most popular player to watch is Shopify. At the end of 2021, Shopify announced that it was about to enter the NFT area. Since then, it has launched a beta program that allows buyers to run their NFT expenses. In addition to Shopify, there are several startups / protocols, such as Reservoir, 54Nft and NFTify, that are working on this issue. As currency yields decline, communities may also be skeptical about the amount offered by NFT markets. Breaking intermediaries will increase community licensing fees and save money for resellers.
Negotiations with the NFT markets do not have a major impact on the demand for the NFT project. Research and decision-making take place in NFT markets instead of intra-collection, not between collection. NFT tags like OpenSea serve as a reliable transaction layer instead of a search platform. NFT markets are not the main source of demand generation. Unlike high-level statistics, OpenSea does not provide any personal recommendations or provide enough information for users to form an opinion on the project. The intention of users to buy NFT is usually shaped by their interactions on social networks or word of mouth.
The benefits of community-driven NFT markets go beyond the economy
Hosting NFT tags will enable communities to provide a better onboarding experience. Currently, the NFT’s purchasing and supply chain processes are disrupted. You can buy NFT at OpenSea, but it’s not clear what they’ll use it for or where they’ll use it. When communities host their own brands, registration can be smoother. For example, when purchasing, NFT buyers can learn about where they can access protected content and how to engage Discord in the community, ensuring a better experience.
Brands hosted by the NFT community may also be more in line with Web3’s behavior in reducing the number of providers. This will protect communities from deplatforming and censoring major NFT markets. Blue-chip projects will take the lead and more will follow soon
About a month ago, Chris Cantino, founder of CryptoPackaged Goods NFT projects, tweeted a list of blue-chip NFT projects that he thought should host their own NFT brand. Given the membership base involved and the resources owned by these projects, blue-chip NFT projects are best placed to lead and launch their own brands in the NFT.
Other projects are likely to follow and introduce their own brands hosted in the community, making it the new standard. It is important to realize that even if the transfer does not take place immediately, we see new players in space. For example, in April 2022, Blockparty announced the launch of a public beta of its decentralized NFT. So far, however, we are not going to introduce BAYC on its own market …