NFTs have a lot of realms to them and one of these is the realm of NFT reward or loyalty programs which is revolutionizing the future of digital incentives.
Now you must know the basics of what is NFT and how can you use it, but you might be confused as to what this new “NFT reward program” phrase means for your NFT dictionary.
Don’t worry, we’ve got you!
What are NFT Reward Programs and their types?
Reward or Loyalty programs are marketing strategies where you encourage your customers to keep supporting and being involved in your business. Reward programs can be applied through various rewards, discounts, and exclusivity through which brands can appeal to their customers’ preferences and increase their engagement as well.
NFTs are non-fungible tokens that are non-interchangeable and distinct from each other. NFT loyalty programs give rewards in the form of unique digital assets that have been tokenized on Blockchain. An additional feature of these is that they add personalization and engagement to the customer experiences.
What makes this even more revolutionary is the ability of the customers to be able to exchange these later for something that they truly desire. Firstly, they get rewards in the form of a rare and exclusive NFT and later if this original reward does not suit their changed preference, they can exchange it with the other customers.
There are various types of NFT reward programs:-
Points Program-
Generally when in the reward programs with various companies we get points on our every purchase and the more points, the more discounts, and rewards we can get on our next purchase, in the same way, the reward points in the NFT world are in the form of NFTs which represent rewards and each of these contains information about your purchasing behavior, etc. You can trade or sell them according to your preference.
Paid Program-
This is another popular form of NFT reward program. When you purchase a product from a company, they might issue an NFT to you which would mean that you can additional benefits and perks to the customers which would increase its value. This is exactly like the coupons that we get after purchasing something from a shop, so you can use that token to unlock certain benefits.
Value Programs-
In this form of an NFT reward program, NFTs can be received by the customer from a company as a representation of their contribution to a cause. It would be like the badge of honor for the customer for participating in the cause.
Tiered Programs-
Sometimes, the companies give out NFTs to the customers which represent different tiers, so that the customers get access to that particular tier. This NFT reward program also helps with the structuring of the various tiers in the company along with personalization and flexibility.
NFT Memberships
Membership NFTs give access to a physical or digital community which is the key value proposition for any NFT membership. These Mmemship NFTs can give you access to certain physical communities like a golf community or a networking board, and they can also give you access to communities on online platforms such as Discord.
For example, owning a DayWay Founders Key can help you get exclusive access and a luxurious experience which the most reputed brands of the world provide you with.
Certain NFTs have the membership component with them but are not called membership NFTs because there is a certain differentiating factor. This differentiating factor is that membership NFTs belong to the community that they give access to rather than just being a side benefit.
Token Gating
Token gating is a form of NFT reward program where the Web3 communities create value for their communities. They do that by giving exclusive access to certain content, events, and other perks to the holders.
The most common example of this is Discord communities, how these have private channels within a public server. They offer a diverse range of experiences starting from token gated stores, to even some IRL experiences.
Now, how does token gating work? The first and crucial step of token gating is setting up your tokens. Tokens are digital assets just like NFTs, they exist on a specific Blockchain. They are interoperable unless and until they are made in the same format. They don’t have their network but like coins, they exist on other Blockchains. Tokens come in two forms- non-fungible and fungible.
The Web3 communities will use a blockchain app, and these tokens will be used to token gate a certain community. Blockchains operate via smart contracts and these smart contracts are a form of computer systems where all the information about your wallet is. When a token holder connects their wallet to a blockchain app, it will ask them to sign a gasless contract. This verifies two things- firstly, that the owner holds a private key to the account, and secondly, that they have the specific requirements and that they hold the necessary tokens.
NFT Profile Picture
Usually when we hear the word profile picture our brain straightaway goes to the picture that we selected as our WhatsApp, Instagram, or Facebook profile picture. But in the NFT world, even Profile Pictures are something that is used by the users to represent themselves and are tradable. They use it to stand out from the crowd and to showcase their ownership of a certain asset. These Profile pictures are also known as NFT avatars which people can own to reflect the ownership of assets that represent their personality and preferences.
Each Profile Picture is a one-of-a-kind digital token which means that no two can be alike, it thrives on rarity, scarcity, and authenticity. It leverages these features on the platform. They represent uniqueness and individuality.
Wrapping it Up!
This was your entry into the VIP zone of the NFT world, just like the brands have their own VIP zones, the NFT world needs to have a VIP zone with their NFT reward programs because otherwise, it would not be that valuable. These were some of the forms of NFT reward programs that we talked about and as you go deeper into the NFT world you will discover more sections to it.
There are a few frequently asked questions answered below:
What is an NFT reward?
NFTs or non-fungible tokens are unique digital assets that represent ownership of a specific item or content. They are made on Blockchain Technology which ensures the rarity and scarcity of the tokens which makes them ideal for loyalty programs.
What does an NFT actually get you?
When you buy an NFT you can get ownership of an asset that cannot be fabricated because of the blockchain technology that does not allow artists to duplicate or fabricate other people’s work.
What does owning an NFT give you?
Owning an NFT gives you commercial rights to the artwork you own. Some examples of these artworks are Bored Apes and Doodles. When you will get the commercial rights to the artwork you can trade, buy, or sell them and even make merchandise out of them.
