By Sarson Funds, Inc.
If you’ve been following the growth of web3 and are thinking that it could be a good fit for your business, the guidelines below will help you get underway.
Step 1. Create an NFT with artwork or your logo that identifies its holder as one of your customers.
Creating an NFT should be fun. It’s a chance for your brand to embody some of what makes your business unique and exciting into a digital membership card that your customers can proudly display. Your NFT will be an image that represents your brand, and they don’t all have to be alike but should have a common identifying theme. (several collections linked below can be viewed as examples). Once you have your digital image completed, there are numerous ways that you can get NFTs info the digital wallets of your customers:
- You can email them a link to mint their membership NFT
- You can offer a limited number of membership NFTs for sale on your website through a promoted “minting event” (which has been popular, see previous article on Donald Trump’s NFT collection)
- You can offer an NFT as an added feature to a purchase that your client makes (i.e., buy the deluxe package of ___ and receive a free membership NFT in our community)
All these methods work and the one you should use depends on your specific customer base.
Step 2. Create value for your NFT holders.
There are nearly unlimited ways that you as the NFT issuer can add value to your NFT community. In the case of Trump’s NFTs, owning a certain number of NFTs guaranteed an invitation to an event or even a golf outing with the former president. In the case of luggage manufacturer Bugatti Group, holding one of their NFTs provides discounts when ordering their bags online. It’s not necessary to list all the benefits of ownership ahead of time but it is important to let your community know why holding one of your NFTs is potentially beneficial. (Vodka manufacturer and dance club owner E11even Vodka has seen robust demand for their NFTs. The utility associated with this NFT offers the holder the ability to skip to the front of the line at their popular nightclubs in Miami and Las Vegas and include a free bottle of vodka upon entrance. The NFT was launched with a limited supply at a price of 1 Ethereum ($1,850) and now trades in the market for 2.4 Ethereum ($4,368).
Perhaps your community would be interested in free shipping, member discounts or early access to exclusive events? It all depends on your business and what excited your customers.
Step 3. Create an easy process for non-web3 native customers to join your community.
Emailing your customers with a notification about their ability to join your digital community is easy for most existing business, but helping customers that do not hold any cryptocurrency and have not set up a digital wallet complete the transaction is more challenging. Luckily business have emerged to address this challenge. We recommend the crypto company NFTpay to help with new client onboarding. They will allow someone that has never set up a crypto wallet to buy your NFT with a credit card and they will email the customer after the transaction with instructions on what to do next.
Step 4. Manage your Digital Community
Once your community is established and your membership NFTs are in your customer’s digital wallets, you will want to interact with this community, let them know about events, promotions and other community building activities. The firm Blocksee.co has emerged as a leading web3 community manager and CRM platform. The will handle minting your NFT for you, provide a platform for “token-gated” chats (chats that are only available to verified holders of your NFT), as well as offering you as the community manager the ability to send your members additional NFTs or Tokens as advertisements, invitations or “airdrops”. Blocksee allows communities of up to 100 members to use their platform for free with reasonable charges for larger communities. The American Crypto Academy that we have spoken about in this column before (and whose advisory board I serve) uses Blocksee to manage its digital subscriptions, classroom chats and the delivery and management of course completion certificates. We could not run our Web3 business without Blocksee.
Step 5. Stay Compliant with US Laws and Regulations
While the US has now fallen behind the EU when it comes to comprehensive cryptocurrency regulation with the recent signing into law of MiCA regulations, it should be assumed that whatever the final version of US laws end up saying, they should be expected to include:
- restrictions on making false statements;
- requirements for disclosure of project sponsors and their contact information;
- restrictions on market manipulation and insider trading;
- adherence with existing privacy and data storage rules (HIPA and GDPR compliance);
- Know Your Client requirements;
- and procedures for compliance with OFAC rules related to sanctioned counties.
While numbers 1-3 on the above list are typically best handled at the company level, compliance requirements 4-6 can (and should be) outsourced to third parties that specialize in staying current with these changing rules. We see many sophisticated NFT projects (including the company behind ‘Bored Apes Yacht Club’, one of the most successful web3 communities) use crypto firm Blockpass to assist them in their data privacy and know-your-customer compliance.
If you are looking for consulting on how to take your business into web3, you can reach out to the American Crypto Academy at [email protected]
Disclosure: Sarson Funds, Inc or its affiliated managers have invested or intend to invest in all companies mentioned.
