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Marta Peral Ribeiro

Marta Peral Ribeiro
– Communication Consultant –

Se há algum tempo nos contassem que daí a poucos anos seriam vendidas obras de arte digitais por milhões de dólares, dificilmente acreditaríamos. Mas é o que está a acontecer: o fenómeno metaverso e os NFTs.

A transição para o metaverso, este universo digital paralelo para onde nos estamos firmemente a encaminhar, está a plasmar a nossa realidade. Sobretudo, como é lógico, na esfera digital. Há mudanças tecnológicas fundamentais a acontecer ao nível da arte e da indústria no geral e, consequentemente, da economia.

Marta Peral Ribeiro

Marta Peral Ribeiro
– Communication Consultant –

Se há algum tempo nos contassem que daí a poucos anos seriam vendidas obras de arte digitais por milhões de dólares, dificilmente acreditaríamos. Mas é o que está a acontecer: o fenómeno metaverso e os NFTs.

A transição para o metaverso, este universo digital paralelo para onde nos estamos firmemente a encaminhar, está a plasmar a nossa realidade. Sobretudo, como é lógico, na esfera digital. Há mudanças tecnológicas fundamentais a acontecer ao nível da arte e da indústria no geral e, consequentemente, da economia.

A lot has been written about NFTs, blockchain, metaverse and cryptoactives. From  Facebook’s change to Meta, the attempt to understand what the metaverse is and its relationship to nfts, their sudden popularity (with daily sales of about 1000 NFTs) and, of course,  the eccentric amounts of money in the millions we see associated with them.  As a result of all this, our skepticism is legitimate.

Source: Unsplash

Non-fungible tokens (NFTs): what are they?

A non-fungible token, in practice, is a unique virtual good.

Fungibility is related to the possibility of replacing goods with other ones of the same category.  For example, physical money is fungible, because if we exchange a €20 banknote for two of 10€ we get the same amount. In the case of a work of art, it is not fungible, because it is unique, nothing is its equal.

Thus, in technological terms, an NFT represents a unique (crypto) asset, because it cannot get lost nor replaced.  It can be connected to something: a work of art, a song, a video, an image, a gif, an avatar, a tweet, etc.  And these can be purchased with cryptocurrencies on platforms such as Ethereum or OpenSea.

It seems that at the moment Singapore, Hong Kong, China and the Philippines are the most enthusiastic countries with regard to the acquisition of NFTs:

Fonte: Statista

What are NFTs for?

Imagine that an emerging photographer publishes a photograph and associates an NFT to it. A user recognizes their potential and decides to invest in that NFT. With the photographer’s growing popularity, the NFT, grows in value in the meantime. Its owner (the user) now has something more valuable than at the time of purchase, and holds the certificate of authenticity of the photograph, which proves that it is the original.

The same occurs with other digital assets, such as a song or a video or, more popularly, items in the industry of Art and Fashion.  For example, in the latter category it has been common to adopt clothing or accessories equivalent to those that a brand already sells in the physical world, but now in its digital version to be worn and adorned by the user’s avatar. That is, NFTs are created from the asset being the equivalent item represented by the brand.  In fact, if I use a certain brand of bag, why not choose the same for my avatar?

This is one of the perspectives that matter when we talk about NFTs.  But there are more.

A question of Individuality

When we purchase an NFT, we become the legitimate owner of this authentic, original article. The exclusivity factor becomes more relevant because this “record of ownership” is public. Not only do we transmit to the world something that is ours, but we manifest what we like, which brings us to the next point.

Belonging to a group

Just as fans like to display their club’s scarf, which gets them recognized by other members of that club, users who own a particular NFT are expressing what they like, positioning them in a group. It can be a group related to art, to a brand, a game, or any other interest. And who doesn’t want to belong to a tribe?

Paradigm shift in the market

NFTs have enormous market potential. We now have the ability to buy digital goods, and in fact users  – especially collectors, and many investors – are making real money to purchase these digital goods.  Especially in the metaverse environment, the possibilities are endless, because they are not bound by the typical constraints of the physical world. For example, we can easily buy a property or a garden.

Roblox / Gucci

Decentralization of power

The entire industry that is being created in this new era of the Internet brings a competitiveness that generates new incentives and better products. Until now assets have been centralized in an entity, usually with a rigid structure, which has the power to prevent negotiations by the users. Now the owners are the users themselves, who can transfer or sell their crypto assets.

Transparency – blockchain technology

The technology used to house NFTs is blockchain. This data structure records information (transactions, contracts, whatever) shared on the network. These records are immutable and public to all parties involved. In practice, it’s like a digital database that’s visible to anyone who’s a part of it, anywhere in the world. Thus, this system creates transparency and congruence.

Source: @theshubhamdhage

And for brands, is there interest in diving into the metaverse and NFTs?

Absolutely. There are already several brands awakening to the new market.  And that, as explained here, differentiates them. When something is new and a brand is at the forefront, it not only stands out for its innovative character but effectively gains visibility and, consequently, sales. Here are some of the possibilities:

Relationship with the consumer

The virtual world has gained, especially in recent years, a huge relevance for consumers. This new bridge, which connects them to the digital version of the brands, consolidates their relationship. Brands can now activate their customer base by bringing them to the virtual – where, by the way, most already are.

New products

A brand can activate a new product, a game, an image or a virtual ticket for a unique event (virtual, using avatars), by adding NFTs to them. Games are without a doubt a good bet, through which a brand can, for example, attribute the virtual version of its products, create accessories for the avatars or even a “crypto-mascot”.

Discontinue products

Imagine a brand wants to discontinue a product, they can assign it an NFT. And that item can even gain value.  Therefore, a user can purchase it and even sell it at an interesting price because it is a rare item.

Community management

By tapping the perspective of the membership group, brands can bet on community management, creating NFTs that interest members of that community and promote their interactions.

In any case, as for any step a company takes, it will first be necessary to outline a strategy. In this plan, the company will have to understand its positioning and the perception that the public has of its image and its products, namely where the brand is distinguished in its market segment.

Brands that created NFTs

Gucci x Superplastic

Gucci recently partnered with Superplastic, famous for its lively celebrities and vinyl pieces. The first series of NFTs is composed by the character CryptoJanky (Janky is a fashion influencer ) in different environments inspired by the Gucci Aria collection. It also incorporates a piece of pottery made by hand by Italian craftsmen, limited to 500 copies, which attributes even more factor of exclusivity to this NFT.

Havaianas (brand of Flip Flops)

Similarly, the Brazilian brand Havaianas created, in collaboration with the artist Adhemas Batista, the collection of digital art “Felicidade”, with 5 crypto assets at an auction.

Among these NFTs is  a gif that was collected for more than 1000€.

Source: NSS Mag

Where are we going?

Presently we hear about NFTs on every corner – as well as cryptocurrencies and other virtual words – even without fully understanding what they are and how they are connected to digital art and, in a broader environment, to the metaverse.

Everything that is happening with the transition to the new internet is, as in life, constantly changing. The difference is that at the technological level everything happens faster.

At first glance it may seem more like a hype, and certainly the frenzy of NFTs will reach an equilibrium, where the prices of art pieces and digital characters are not as absurd as many we have seen throughout the internet. And that will happen when the market matures, when we better understand the fundamentals of cryptoassets and are able to distinguish those that are in fact valuable from those that aren’t.

And if for the user NFTs contribute to shaping their virtual identity, in a game or on a digital platform, in addition to giving them access to exclusive events, they also represent new forms of relationship with consumers and various sales opportunities for brands.

In conclusion, NFTs not only add value to the digital ecosystem, but will transform the fundamental aspects of the digital economy and marketing. We’ll be here watching.