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Crypto exchange Binance says one crypto sector is changing the way big brands do business and connect with their communities.
Binance says in a new blog post that non-fungible tokens (NFTs) are transforming the way companies look at memberships and loyalty programs.
“Popular brands, including sports organizations, can use NFT-based membership systems to reward their customers or supporters. Access can be granted to a user when they connect their crypto wallet to the organization’s platform and verify their ownership of a membership NFT. These tokens can then unlock a suite of online and offline perks, such as access to exclusive events and services and much more.
Indeed, the mechanics of NFTs are an excellent addition to traditional membership systems: they can serve as a token of a status that grants exclusive benefits to the particular individual who qualifies for them. In that sense, it is fair to say that a membership is non-fungible.”
Binance, the largest crypto exchange in the world by volume, says that NFTs can potentially disrupt the traditional membership system by addressing its inefficiencies, and providing additional income streams for companies.
“With NFT-based memberships, the sign-in or verification process can be drastically simplified. All you have to do is make sure you have the right NFT in your wallet before you connect it to the organization’s platform, then go straight to enjoying the benefits you are entitled to.
The lifetime value of traditional memberships rarely goes up: most people get the same benefits they have subscribed for. Some companies may even decide to cut certain perks after some time. With NFT memberships, it doesn’t have to be this way.”
Binance notes some downsides for NFT-based membership systems. For example, the exchange says that onboarding customers to an NFT membership is still much more complex and counterintuitive for the user.
“While there are many benefits to NFT memberships, getting a traditional membership is still much faster and easier for most people. Like with many Web3 innovations, one of the main barriers to adoption is lack of information and skills to leverage the technology. For the same reason, the number of businesses that offer NFT memberships is still quite limited.”