Create an NFT Drop: Why and How
|— NFTs embody a new type of digital ownership, enabling communities to be formed around shared values, ideas and outcomes |
— The ability of NFTs to be a vehicle for storytelling and community building makes them a perfect vehicle for brands looking to engage with their audience
— NFT drops are notorious for creating buzz and galvanizing communities – here, we explain how you can create one for your brand
In 2022, few things inspire more excitement or social media buzz than two little words:
Web3 is not just a marketing term or hype: it’s a fundamental shift in how the internet works, and in the relationship between brands and their audience.
Web3 audiences are active
In Web2, people are buyers and observers, and brands compete to monetize our attention. Meanwhile, no matter how many products you buy, you’ll never own any part of that brand: consumers are passive entities.
In Web3, however, we go beyond observing to become stakeholders and active participants in the space. Here, global communities form around a central idea actively invest in its future and seek ways to play a part in that future themselves. Here, whole cultures are formed around a central story, and NFTs are one of the main vehicles through which this dynamic is carried out.
Brands can engage those audiences
It’s hardly surprising that brands large and small are also embracing this new technology. A recent study by BusinessWire predicted a global NFT market value of $211 Bn by 2030. This is surely a market anyone would want access to!
But there’s more to it than just money. NFTs are an extremely effective tool for managing your relationship with your audience, with some of the world’s best-known brands already diving into the Web3 space as part of their marketing strategy. Tiffany and BAYC, Nike and RTFKT, Gucci and 10KTF: these are just a few great examples of major brands leveraging the mechanics of Web3 to engage their audience in new ways – and reach new audiences too. We’ll talk about those shortly.
How to enter Web3
If you’re a brand pondering how to leverage NFTs yourself, this is the article for you.
Not everyone is a huge brand like the ones above – but the good news is, you don’t need to be to leverage NFTs as part of your story. Whether you’re a restaurant, travel agency, gym or just getting started in marketing, here’s how you can leverage on this new technology to build your brand and story.
Create an NFT drop for your brand
1) Digital or phygital? Decide what your goal is
Entering the digital space has some huge benefits: with more of our lives than ever being lived online, digital identity is becoming as important as its physical counterpart, and that means an explosive new marketplace to be tapped. Meanwhile, the need to prove the authenticity of your brand in the digital space is perfectly suited to the mechanics of NFTs, which allow digital identity to be hardwired into each token.
But being present in Web3 does not mean you need to be fully digital yourself. While NFTS began as purely digital assets, increasingly they are being used as part of a broader customer relationship strategy for physical goods.
Gucci and Superplastic
For example, the recent collaboration between Gucci and Superplastic saw the fashion giant release 250 NFTs, each with its own limited edition, handcrafted Italian sculpture as part of the package.
Doing this allowed Gucci to double-click on its reputation for physical design, while linking in with the culture and artwork of the digital space. This is just one example of many that are currently tying physical to digital.
Nike and RTFKT
Nike is another great example: since buying RTFKT studios, Nike has been experimenting with different NFT uses, and is currently developing NFT versions of its Air Force 1’s, all of which come with real life sneakers to match the tokens.
Here, the “end” is the physical sneakers, and the “means” is the NFT, which also doubles as a digital collectible, galvanizing Nike’s digital community and giving the brand digital presence.
2) Create a compelling story
An NFT drop serves two purposes: it must activate your community and develop the identity of your brand. So a well-thought-out story is one of the most important elements of any drop.
One exceptional example is 10KTF, a virtual Web3 clothing brand with the aesthetic of a traditional craft shop, run by fictional character Wagmi-San. Launched in September 2021, 10KTF quickly became one of the hottest vendors in Web3 by creating high-quality, bespoke digital hi-tops emblazoned with the buyer’s PFP.
But the success of 10KTF stems not from their Web3 fashion offering, but from the exceptional creativity in terms of how the underlying story of designer Wagmi-San developed. Fast forward a year, and Wagmi-San has been extorted by fictional mobsters The Toads, restructured his store to avoid further threats from New Tokyo’s criminal underbelly, passed the production activity of 10KTF to the community itself, and is now busy waging war on the streets of New Tokyo, complete with car chases, flame-throwers and sophisticated NFT weapons, all of which has been brought to life via Tweets and ultra high-quality animated clips fed to the 10KTF community.
This Web3 native clothing brand is a masterclass in storytelling, which not only galvanized the community, but created a sense of significance and identity around each new drop of NFTs. A flawless mix of storytelling, engagement and brand development.
3) Define your token utility
What is the utility of your tokens? This is the next key consideration for any NFT drop. Remember, NFTs can be anything, from a unique artwork, to a collectible, a membership card or an exclusive access pass for events. The only thing linking all of these use cases is that the token authenticating all of it is blockchain-based, and needs to be kept in a crypto wallet.
Physical merchandise aside, what will your community be able to do with their tokens? To give you an idea of what you could do yourself, here are a few of the different utilities NFTs are offering their holders:
- Exclusive access to events
Access to big events is always going to be hot property. So what better way to package that access, than as a digital collectible that will last forever?
The Grammys recently teamed up with Thank You X and OneOfNFT to launch a collection that provided holders with varying levels of “special access” to live music events, based on the rarity of the token. With the music and events world embracing NFTs, you can expect to see special access NFTs more often.
- Voting rights
One great way to engage and galvanize your community is to give them a voice. Programming your NFTs with voting rights (on anything from new features and drops, to future events and character storylines) rewards the most engaged community members by giving them an active say in how the project is run. In Web3, where people expect a “stake” in the ecosystem, this is one more way of putting your communities in the driving seat, and keeping them with you.
- Ask-me-anything sessions
Everyone has someone they’d like to meet. Using token-gating to create exclusive ask-me-anything access for your community gives them a chance to get up close and personal with the key faces of your brand, or a partner you’re working with. This very human experience is another benefit you can facilitate via NFTs.
- Metaverse use cases
The Metaverse is an entire digital realm built on NFTs, so if your brand wants to have a presence there, the opportunities are endless. From metaverse fashion wearables to digital event access, and even unlocking exclusive gaming experiences, there are thousands of options for your brand to engage its community.
4) Choose your blockchain
Let’s talk technical details: choosing a blockchain. Every blockchain has different use-cases, and your choice will depend on the specifics of your project, how your community will be using their tokens, the audience you’re working with and your budget.
Ethereum is the #1 blockchain for NFTs – as a result, NFTs on this blockchain have access to the largest ecosystem of marketplaces and apps. On the other hand, Ethereum is also known for its relatively high gas fees, which will impact both your NFT drop and the over-all experience of your community as they use your tokens. Layer 2 solutions such as Polygon are on the rise as a result, and could provide a less expensive alternative that is still compatible with Ethereum’s ecosystem.
Alternative blockchains like Solana, Tezos or Avalanche can also be great options, all offering significantly lower gas fees than Ethereum (at present) – but they also lock you into different options, since most NFT marketplaces cater to specific blockchains.
In short, blockchain choice is an important element of any NFT drop, and needs to be considered before you begin.
5) Define and create your NFT smart contracts
The smart contract is what defines the characteristics of your brand’s NFT collection, as well as some fundamental elements of the individual tokens. This includes important details, like:
- The size of your collection
- Token traits and rarity
- Voting rights and other on-chain utility
- Resale royalties
These specifications will define things like the total supply of your tokens, their utility, ownership rights and potential earnings at resale, all of which will impact the value of the project both to you and your community.
Having real sovereignty over your drop means having complete control over its smart contract. You may not be aware, but NFT collections dropped via an NFT marketplace platform cannot be fully customized – instead, they rely on a standard template that has limited room for alteration by you. This limits your control over essential elements of your collection.
A sovereign drop means using a fully customizable smart contract: to do this, you can check out Manifold, a minting platform that enables maximum control over your NFT smart contract. For a bit more on how that works, check out our article on Creating an NFT Smart Contract.
6) Decide how you’ll manage the NFT drop
So you’ve built your story, defined your collection’s unique utility, chosen your blockchain and programmed your collection with a bespoke smart contract. Now it’s time for your long-awaited NFT drop – but how exactly will you do that?
Make no mistake – the way you release your NFT collection is a critical consideration. It defines who will have access to your community, how those recipients will be chosen, and even touches on fundamental questions such as gas fees.
- Private drop
A private NFT drop is one in which tokens have a fixed price, but the collection is only accessible to certain wallet addresses. These wallets are either logged via an Allow List (check out our article for more on how that works) or are eligible via tokens they already own.
- Public drop
Alternatively, if you’re looking to make your NFT collection open to anyone, you can launch it via an auction. There are different types of auction – Dutch Auction, which sells tokens in price tranches until the collection is sold out, and English, in which buyers “fight it out” and the highest bidders win. The limitation to using a public auction is that it tends to prioritise the wealthier community members.
In either case, understanding how your choice of drop will impact the project is essential, and something you’ll need to consider as part of your strategy.
7) Make sure your community stays secure
NFTs are about building relationships with your audience, and one important element of that is making sure they’re equipped to keep their NFTs safe even after the collection sells out. This is why education around Web3 security is so essential to your relationship with your audience.
Make your audience your community
Web3 is coming, and with it, the expectations of your audience is shifting. Understanding the new ways audiences are engaging with brands and each other is critical for anyone managing a brand or community – and NFTs are one of the key vehicles for this new style of relationship.
No matter how big or small you are, you can leverage the mechanics of Web3 to create a self-sustaining culture for your brand – and now you have an overview of how that process might work for you.
Be bold, be creative and stay safe. See you in Web3!