To those unfamiliar with the world of Web3, NFTs don’t have an excellent reputation. People say that sales are flatlining, scams abound, crypto mining is ruining the environment, and that people are fools for paying money for digital art and other items.
So goes the conventional narrative.
In fairness, there’s some justification for people’s concerns about NFTs. The problem is that a fair amount of nuance is lost to the backdrop of distorted sensationalism that discolors a lot of NFT media coverage. Consequently, it’s not surprising that people still have their guards up when it comes to anything blockchain-related, whether it’s cryptocurrencies or NFTs themselves.
This puts brands that are on the cusp of jumping into Web3 in an unenviable position. On the one hand, NFTs are an undeniably useful and potentially lucrative tool. Combine the sheer functionality of possible use cases with their prospective earning power, and you’ve got a technology that companies can’t afford to ignore. Sooner or later, Web3 will change how most industries operate, and businesses know this. On the other hand, the lack of knowledge surrounding blockchain technology makes adopting these tools a gamble from a brand’s perspective.
NFTs are to the evolution of the internet what nuclear energy is to the fight against climate change — indispensable and wildly misunderstood. So, what do you do when you’re a Web2 business that wants to start tinkering with NFTs, but prefer not to disturb your brand’s following?
The answer to this question is playing out in real-time, the primary examples of which are showing up on Reddit.
Why brands are avoiding the term ‘NFT’
On July 7, 2022, Reddit announced it would introduce Collectible Avatars, which are limited-edition avatars created by independent artists in partnership with the company that will confer unique Reddit platform benefits to their owners.
The Polygon blockchain will back these new avatars, which will be available for purchase at fixed amounts via conventional currency (not crypto), giving owners a license to use the art both on and off the platform.
“Seeing avatars take off got us thinking — what would happen if we gave artists on Reddit license to make any style of avatar they wanted?” the company mused in its announcement. “And what if we could help these artists showcase their art to the entire Reddit community and make it easy for them to earn money for their work? Our new Collectible Avatars storefront does just that.”
So, to recap: Reddit has independent artists making unique, blockchain-backed digital avatars that will be available for purchase and grant owners specific utility on the Reddit platform, as well as something similar to a CC0 license in terms of intellectual property usage.
If this procedure sounds like an apt description of what NFTs are and do, that’s because it basically is. But Reddit would prefer you don’t use that term. And not just because the term “NFT” doesn’t appear even once in their announcement.
In June, Reddit released an NFT “playbook” reviewing some interesting facts about and pointers for its user base. The company reports that 70 percent of Reddit users are open to buying an NFT from their favorite brand, but 35 percent think brands could also “ruin the future of NFTs.”
The significance of this is not lost on Reddit’s leadership, and the company is now exploring its NFT options, developing a two-pronged strategy to minimize the bad optics surrounding the conventional frame of NFTs.
First, by removing the need to purchase crypto, Reddit makes the avatars easy to acquire and preemptively assuages the fear of entering highly speculative crypto markets. Second, Reddit’s move helps ease Reddit users’ subconscious biases against the technology. Even if a user actively dislikes the ideas of NFTs, they’re more likely to engage with these avatars if they don’t come across the term that much or if Reddit clearly and repeatedly insists that they are not NFTs in the “traditional” sense.
This is the strategy that Dapper Lab’s CEO Roham Gharegozlou used when marketing NBA Top Shot in 2020. In an interview with The Action Network, Gharegozlou said he tried “not to talk about the blockchain part” when marketing the project. To be a Top Shot collector, he continued, you only “need trading card knowledge and you need to know sort of what’s going to be valued by collectors.”
Similarly, Reddit users don’t need to know anything about NFTs — they just need to know how to have fun with avatars, a functionality that the company introduced two years ago when it let users generate and customize their own for display on the website. This next step is a natural one for the company to make.
Candy Digital corners ‘digital collectibles’
Candy Digital is another example of a company that consciously distances itself from the NFT label, successfully carving out a space for itself in the “digital collectibles” industry.
The company’s most renowned collections come from its partnership with Major League Baseball, and MLB Players Inc. Fans can purchase dynamic baseball cards whose stats evolve as players’ careers do. There’s even a “Play of the Day” set offering collectors regular-season game moments in a model similar to NBA Top Shot.
And now, the company is branching out into media and entertainment partnerships. On July 14, 2022, Candy Digital dropped the “Stranger Things” Season 4 Upside Down Mystery Box in collaboration with Netflix. The collection includes 11,111 dynamic, poster-style artworks featuring one of 17 characters from the latest season of the show.
You could very easily call the posters NFTs, but the company feels doing so would be a mislabel.
Speaking with Candy Digital’s CMO Andre Llewellyn, nft now asked about the company’s branding choices regarding the collection. Much like Reddit’s Collectible Avatars announcement, the term “NFT” is nowhere to be found on either their website or in their promotional materials for the “Stranger Things” release.
“The idea is to focus more on the product than the format,” Llewellyn said. “If we look at music, I’m not selling the format of a CD or a music stream; I’m selling you the artist’s single. It’s more about the product and the experience itself. That’s what led us to focus on ‘digital collectibles’ versus ‘NFTs.'”
Since the space is so nascent, Llewellyn believes it would be wrong to assume that there’s only one valid and applicable term for Web3-based items like these. Formats and nomenclature change over time.
“There’s no right answer here, and I don’t necessarily think there is just one way to call these collectibles. [Our] approach is less about trying to stay away from “NFTs” specifically and more about looking at what makes sense for the consumer,” Llewellyn explained. “Especially for a consumer that’s looking to buy something that’s new to them. An ‘NFT’ by itself — it’s not very clear what it is. But a digital collectible very much speaks to what it is that we’re giving folks. It’s something that’s digital, it’s something that’s collectible, it’s something that gets you closer to your fandom.”
It’s a fair and valid point. And, since Candy Digital’s Stranger Things collection sold out the same day of its release, it’s clear that these digital assets don’t need to be tied down to one term if they’re still adding value to their communities.
Web3 proponents regularly advise investors, developers, and collectors to remain open and adaptable in the crypto and NFT space. It’s not unreasonable to think that everyone involved in Web3 might benefit from applying the same open-mindedness when we designate its fundamental tools, NFTs included.