ADOPTION 2023 Part 2: NFT

 

Table of Contents

1. Introduction

2. Adidas: Web3 Trends to Watch in 2024 - 1) Vertical Markets 2) Customer Loyalty 3) Token-gated Commerce

3. Binary Korea (HYBE): Designing Interactive, Fandom-Centered Communities Utilizing Web3 Technology

4. SK Planet: UPTN, a Web3 Project Enhancing OK CASHBACK Business

5. LINE: Anticipating Web3 Success Stories in Avatars/Metaverses, Gaming, and Fandom

6. Daehong Communications: Building an Ecosystem to Produce Devoted Fandom Through Web3 Efforts

7. Fingerlabs: Sharing with Customers and Collaboration between Companies Made Easier through NFTs 

8. Closing Thoughts

 

1. Introduction

In ADOPTION 2023 Part 1, we explored the current state of the Web3 market from a macro perspective, highlighting insights from sessions conducted by Bain & Company and Xangle. Now, in this second installment of the series, we shift our focus to the viewpoints of Web2 companies regarding NFTs. We will delve into why these companies are embracing NFTs, examine their performance in this space, and identify the trends they are observing.

 

2. Adidas: Web3 Trends to Watch in 2024 - 1) Vertical Markets 2) Customer Loyalty 3) Token-gated Commerce 

Adidas has identified three key Web3 trends for 2024: 1) Vertical Markets, 2) Customer Loyalty, and 3) Token-gated Commerce. The company emphasizes the importance of effectively leveraging these trends to drive successful NFT business operations.

Vertical market refers to brands that issue NFTs while also operating their own marketplaces. Unlike horizontal marketplaces like OpenSea, where multiple NFTs are traded simultaneously and there are risks of counterfeit purchases and royalty issues, vertical markets allow NFT issuers to manage their marketplaces. This enables secure transactions, guarantees royalty revenue for issuers, and provides a safer environment for users. For these reasons, Adidas predicts that more NFT issuers will launch their own marketplaces in the future.

Web3 technology has the potential to greatly enhance customer loyalty. Without the integration of blockchain and NFTs, only a small fraction of platform subscribers would likely remain engaged with the service, making it difficult for smaller brands to establish and sustain partnerships with larger brands. Adidas highlights that Web3 resolves this issue by enabling a multitude of services, similar to Lego blocks, to collaborate and build communities at a lower cost.

Token-gated commerce is another area to watch. Soon, personalized user experiences can be tailored based on NFT data stored in the wallet, such as the types of NFTs held or transactions conducted, without relying on off-chain data. Adidas believes that if the market expands, these initiatives have the potential to redefine the existing commerce market.

 

3. Binary Korea (HYBE): Designing Interactive, Fandom-Centered Communities Utilizing Web3 Technology

Binary Korea, a new development entity under HYBE, is working on various initiatives to enhance user experiences using Web3 technology. In their presentation, Binary Korea acknowledged several challenges hindering the adoption of Web3 technology in the entertainment market, including 1) negative fan perceptions, 2) speculative concerns within the market, and 3) unfamiliar UI/UX. However, Binary Korea has announced plans to explore a new type of community service that leverages Web3 technology. They are particularly drawn to blockchain's features such as interoperability, Soul Bound Tokens (SBT), and the ability to transform individual activities into economic value.

By holding various events, Binary Korea is dedicated to creating a platform that fosters mutual communication among fans, establishing a virtuous cycle of events, interactions, and rewards. Their goal is to collaborate with fans in the creation of new content. Moreover, recognizing the current absence of an economic system, they aim to establish a user-driven economy in a new environment by generating value from actual traffic and ensuring the stability of product value. While Binary Korea has not made immediate plans for token issuance, they have expressed their intention to explore the possibility of issuing "utility" tokens once they are prepared to navigate regulatory requirements and mitigate risks.

 

4. SK Planet: UPTN, a Web3 Project Enhancing OK Cashback Business

In June, SK Planet, a subsidiary of SK Group, became the first company within the group to launch the Web3 project UPTN. During their presentation, SK Planet anticipated that Web2 companies with a significant user base would play a crucial role in popularizing blockchain technology. They supported this claim by showcasing the increasing number of UPTN wallet users as evidence. Since the launch of UPTN, SK Planet has witnessed the creation of 110,000 new wallets within a month, with 95,000 individuals participating in the initial onboarding project, the OK Cashback NFT Membership. SK Planet attributed this rapid user growth to the successful onboarding of many OK Cashback users into the Web3 ecosystem. SK Planet emphasized that their aim extends beyond onboarding their services. They aspire to create an inclusive environment where anyone can easily join the ecosystem in the long run, thus fostering ecosystem expansion. For further details on the UPTN project, please refer to the Xangle Original article titled “Road to Rich: SK Planet's Rewards Program Meets NFTs.”

 

5. LINE: Anticipating Web3 Success Stories in Avatars/Metaverses, Gaming, and Fandom

LINE is strategically prioritizing NFTs over FTs (Fungible Tokens) as more users are engaging in actual usage and transactions of NFTs rather than speculative trading. Recognizing the vital role of NFT market infrastructure in driving the widespread adoption of Web3, LINE is actively developing an environment where NFTs can be utilized as payment methods. Leveraging its expertise as Asia's leading messenger platform, LINE is also dedicated to resolving the UI/UX challenges of Web3 and creating a user-friendly service tailored to Web2 users. For instance, LINE users can easily access LINE NFT services through social login and utilize convenient payment methods like Naver Pay and LINE Pay.

LINE predicts that Web3 will witness success stories in three key domains: 1) avatars/metaverses, 2) gaming, and 3) fandom. To facilitate growth in these sectors, LINE operates platforms known as ACRZ, GAME DOSI, and AVA. In particular, GAME DOSI, a global NFT platform that launched in beta in September 2022, has demonstrated impressive performance. DOSI NFTs have recorded over 410,000 cumulative transactions, engaged more than 190,000 traders, and garnered approximately 4.7M membership users. In the first sale, transactions conducted through NAVER Pay and credit cards accounted for 32% of the total, indicating the potential for expansion into the public service market. These achievements are further supported by on-chain metrics. Currently, the number of buyers and sellers on DOSI has grown to 30 to 40% of the leading global platform, affirming its increasing appeal as an NFT platform.

 

6. Daehong Communications: Building an Ecosystem to Produce Devoted Fandom Through Web3 Efforts

Daehong Communications, the marketing and advertising firm for the Lotte Group and operator of Bellygom Season 2, is dedicated to cultivating a deeply engaged fandom through Web3. During the session, Daehong Communications emphasized a shift in approach from simply supplying products and services to anonymous consumers in the past, to now delivering immersive brand experiences and values that captivate consumers, transforming them into devoted fans and fostering a distinct brand worldview.

Daehong Communications stressed that three essential elements - anticipation, participation, and a sense of belonging - are crucial for building a fandom. These elements form a virtuous cycle that contributes to the brand's popularity. Daehong Communications has developed social data and on-chain data metrics to measure these elements, and the results consistently show positive growth across all metrics. This indicates that brand experiences are being enhanced through the adoption of Web3 technology.

Daehong Communications is committed to fostering a sustainable fandom culture by continuously monitoring metrics and implementing advanced strategies to attract a larger fan base. Daehong Communications ended the presentation by highlighting its role in assisting brands that encounter challenges in building and expanding fandoms within the Web3 ecosystem, as well as bridging the gap between NFT projects and the Web2 market.

 

7. Fingerlabs: Sharing with Customers and Collaboration between Companies Made Easier through NFTs 

Fingerlabs, a comprehensive marketing group and a subsidiary of FSN, is an NFTECH company that leverages blockchain technology. Fingerlabs is the issuer of Sunmiya NFTs. Fingerlabs acknowledges that NFTs are a fusion of new culture and technology, and recognizes the importance of generating fresh value in the market. Moreover, Fingerlabs emphasizes that the decline in the NFT market cannot be solely attributed to liquidity issues caused by market problems, but rather stems from the absence of a circulation model that sustains the value of NFTs.

According to Fingerlabs, NFTs can be understood as personal databases that operate independently of servers. In the Web2 world, connecting services often come with substantial costs. However, NFTs offer distinct advantages within the ecosystem by leveraging decentralized blockchains, enabling unlimited scalability and reducing technological expenses and limitations. For instance, if someone holds an NFT from Business A and wishes to receive a discount at a golf course, they can simply present the NFT without requiring a separate agreement with the business. Fingerlabs foresees that as these server-independent personal databases continue to grow, they hold the potential to revolutionize numerous business landscapes.

 

8. Closing Thoughts

As previously discussed, Web2 companies are increasingly incorporating Web3 technologies, specifically emphasizing NFTs. These companies have successfully developed and implemented services that prioritize user experience from the initial planning stages. Consequently, they are witnessing rapid expansion of their user base by leveraging their existing user pool. It is crucial to closely monitor whether the accomplishments of Web2 companies will serve as a catalyst for the widespread adoption of blockchain technology in the mainstream.