Why do brands still care about Non-fungible Token?

Despite a slight drop in Non-fungible Token sales compared to the peak of the summer of 2021, brands like Casio and celebrities like Caitlin Jenner continue to show sustained confidence in the potential of digital collectibles.

Source: Statista

According to statistical data, the volume of Non-fungible Tokens has significantly decreased this year. In addition, the current selling prices of some once valuable Non-fungible Tokens are much lower than their purchase prices from a few years ago.

For example, CryptoPunk #5822 set a record for the highest CryptoPunk sales in 2022, selling for 8000 Ether, worth about $23 million at the time. The Non-fungible Token was transferred to an anonymous encryption Wallet on August 19, and the exact amount was not disclosed. However, this downward trend did not stop everyone from participating in Non-fungible Token transactions.

Despite the market Fluctuation, the brand still embraces Non-fungible Token

Despite the declining interest in digital collectibles, brands are still constantly launching NFT series.

Japanese multinational electronics company Casio recently announced the launch of a series of Non-fungible Token sneakers. Casio has partnered with the Web3 lifestyle application STEPN GO to release these sneakers as part of the “virtual G-SHOCK” project.

During the Mooar gamification market from August 26th to 29th, 800 pairs of sneakers were released in limited quantities through a lottery minting event. Yawn Rong, co-founder of FSL, said that the ‘G-SHOCK x STEPN GO’ Non-fungible Token sneakers are unique because they are the first tradable Genesis sneakers in the STEPN GO ecosystem. Rong pointed out that this gives them both intrinsic value and scarcity, making them highly sought after by collectors and players. ‘These Non-fungible Tokens also integrate practical functions in the STEPN GO application, allowing owners to earn rewards,’ Rong said.

In addition to Casio’s Non-fungible Token release, data collected by the Vogue Business Index shows that 17% of brands have partnered with Non-fungible Tokens since the winter of 2021. Brands such as Louis Vuitton, Dolce & Gabbana, Balmain, Jimmy Choo, and Givenchy have all participated in Non-fungible Token projects.

Rong believes that brands like Casio are increasingly interested in Non-fungible Tokens because they provide functionality beyond static digital art. These Non-fungible Tokens offer practicality and engagement in a wider ecosystem. ‘In the case of STEPN GO, Non-fungible Tokens are an important component of the user experience, providing real value through rewards for physical activity,’ Rong said. He added that this utility-driven approach aligns with Casio’s innovative concept, allowing the manufacturer to reach new, technologically savvy audiences. ‘It also promotes the creation of unique interactive experiences that blend the physical and virtual worlds,’ Rong commented.

NFT: Building Loyalty and Bridge Experience

Zhen Yu Yong, CEO of Web3Auth, said in an interview with Cryptonews that brands are increasingly realizing how Non-fungible Tokens can enhance customer loyalty. For example, Yu Yong explained that Web3Auth collaborated with McDonald’s in Singapore to launch the “Grimace Non-fungible Token”. Holders can participate in games and activities, unlock real rewards redeemable at McDonald’s stores. “This approach not only motivates customers to visit physical stores multiple times, but also strengthens the connection between the brand and customers,” Yu Yong said. “With the continued development of Non-fungible Tokens, they are becoming powerful tools to connect digital and physical experiences, enhancing the appeal of brands and celebrities.”

Yu Yong further pointed out that the collectability of Non-fungible Tokens still has significant appeal. ‘Especially in fan communities or niche communities, owning a Non-fungible Token itself becomes a kind of honorary badge,’ he said. ‘Utility-driven Non-fungible Tokens can help maintain long-term engagement, keep Non-fungible Tokens correlated, and adapt to future trends.’

Celebrities Join the Non-fungible Token Movement

This year, some celebrities have also launched Non-fungible Token series. For example, Yu Yong shared that Web3Auth collaborated with ‘Collect Trump Cards’ to launch a series of Non-fungible Token called ‘America First’ (https://cryptonews.com/news/donald-trump-launches-fourth-nft-series-featuring-debate-suit-collectible/). Yu Yong explained that holders of Trump’s Non-fungible Token can attend dinners with presidential candidate Donald Trump, creating a unique sense of exclusivity and interactive experience. ‘In addition, Non-fungible Token facilitates and maintains the formation of communities through token access; only Token holders can participate, promoting a more focused and cohesive community,’ he said.

Recently, Caitlin Jenner tokenized her 1976 Olympic gold medal on BaseBlock on-chain and auctioned it as a Non-fungible Token. According to the source, the Non-fungible Token holder will receive a ‘contract’ associated with the digital collectible.

Regulatory Uncertainty and the Future of Non-fungible Tokens

Despite continued interest from brands and even celebrities in Non-fungible Tokens, unclear regulations may hinder their adoption. On August 28, leading Non-fungible Token marketplace OpenSea received a Wells notice from the Securities and Exchange Commission (SEC) in the United States, prompting the company’s review for potential securities violations. ‘This undoubtedly raises questions about how Non-fungible Tokens are regulated in the United States,’ said Yu Yong. ‘Such events highlight the uncertainty that brands and celebrities face when entering the Non-fungible Token space.’

Neil Mullin, CEO of Mojito, a Web3 consumer engagement platform, said in an interview with Cryptonews that as regulations continue to evolve, brands must be able to adapt to the changing trends. ‘Web3 experts who help brands navigate the ever-changing digital asset regulatory landscape are crucial for ensuring compliance and sustainable development,’ Mullin said.

Experts: Non-fungible Token is booming and growing

Despite facing challenges, industry experts believe that Non-fungible Tokens will continue to develop. Yu Yong sees strong signs of continued interest in Non-fungible Tokens from brands and celebrities. However, he adds that the future of Non-fungible Tokens depends on three key factors: the climate of the encryption market, regulation, and innovative user experience. ‘The recent Wells notice issued by the SEC to OpenSea highlights the ongoing uncertainty in the regulatory environment. Brands and celebrities may act cautiously, waiting for clearer rules and frameworks,’ he said.

Ben Illian, co-founder of Book.io, further told Cryptonews that the ability to on-chain mint and protect digital media will also drive the adoption of Non-fungible Tokens. “For brands, this provides a transformative opportunity. Imagine Nike selling a pair of sneakers with a limited edition Drake album Non-fungible Token, each album with a unique cover and unreleased tracks,” Illian said. “The possibilities are endless - Non-fungible Tokens have far surpassed just being public images.”

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