Table of Contents

1. Once a Prominent Web3 Investor, SK networks Now Runs Its Own Web3 Business, W.XYZ

2. W.XYZ, an NFT Hotel Membership by Walkerhill

3. Top Differentiator: Holders Can Design Their Own Benefits

4. Primary Goals of Capturing Millennial and Gen Z and Identifying Their Needs

5. Focusing on Long-Term Over Short-Term

1. Once a Prominent Web3 Investor, SK networks Now Runs Its Own Web3 Business, W.XYZ

Having predominantly been an investor in the Web3 space, SK networks is transitioning to a “business investment company,” akin a venture capital firm. This strategic pivot came as part of the “SK networks 3.0” initiative in 2019, marking the progression beyond the earlier phases of SK networks 1.0 and SK networks 2.0 that revolved around trading and rentals. Following this strategic realignment, SK networks will not only invest in high-growth areas but leverage the resulting technological advancements to upgrade its business model. As part of the transition, SK networks has committed KRW 10.8 billion to Block Odyssey, a blockchain and NFT solution company, and an additional KRW 26 billion to Hashed, a global blockchain VC fund.

<SK Networks' Walkerhill Hotel Membership NFT, W.XYZ | Source: W.XYZ>

Recently, SK networks has taken a significant stride into the Web3 domain with the launch of W.XYZ, an NFT membership project of one of its businesses, Walkerhill Hotel. This article will explore the key aspects of the W.XYZ project and see if there is a particular rationale behind its decision to launch membership NFTs specifically within its hotel business as opposed to its other business areas.

2. W.XYZ, an NFT Hotel Membership by Walkerhill

W.XYZ is Walkerhill Hotel’s NFT membership, which is a results of a collaboration between lifestyle brand Peaches and FSN's blockchain subsidiary Fingerlabs. Announcing Phase 1 on July 26, SK networks unveiled its plan to issue a collection of 48 NFTs, allocating 16 to celebrity influencers and 32 to those who complete Walkerhill's offline missions and Discord's online missions to earn medals. The 48 selected individuals will form the ALPHA community and devise operational plans and propose benefits. Already, the Phase 1 rollout is off to a great start, attracting over 200 participants within a week of its launch.

<W.XYZ's PFP NFT, Source: W.XYZ>

Moving into Phase 2, a selection of 300 to 500 GENESIS community members will appointed to invigorate the local communities around each Walkerhill hotel according to the operating rules set by the ALPHA community. Finally, Phase 3 will open the sale of NFTs to the general public in a move to leverage the potential of metaverse hotel and bridge offline and online experience through Hotel-in-Hotel in the future.

W.XYZ is a separate project from SK Planet's Road to Rich, and will be issued on Polygon instead of Avalanche. It underscores SK Group’s approach of maintaining flexibility and keeping its options open with regards to blockchain selection. Another noticeable detail is W.XYZ’s utilization of Fingerlab's wallet service, the FAVORLET. This specialized multi-chain wallet is tailored to NFTs, allowing holders to be verified off-chain through the FAVORLET scanner app and receive benefits offline.

3. Top Differentiator: Holders Can Design Their Own Benefits

Breaking from conventional NFT practices, where benefits were predefined in a top-down manner, the Phase 1 48 W.XYZ holders will be able to design their own benefits, echoing the spirit of Road to Rich NFTs. These benefits will eventually extend to GENESIS and GENERATE members, enabling their active involvement in the project's decision-making. While concerns of cherry picking have surfaced, and some applicants are requesting over-the-top privileges like exclusive rights to suites, the situation is unlikely to escalate into an issue as SK networks intends to engage in dialogues with applicants and collaboratively determine benefits.

W.XYZ aim to build a community of devoted “super fans" through a participatory membership structure. It will initially handpick 48 initial community members, secure them as the loyal customer base, and subsequently expand the community’s reach throughout Phases 2 and 3. This bears resemblance with the fan-building strategy employed by the Bellygom project presented in this year’s Xangle ADOPTION (see Xangle ADOPTION 2023 Part 4: Consumer Goods). There’s a difference though as Bellygom has built a participant reward system such as Jelly NFTs whereas W.XYZ intends to build fans by allowing the community to select their own rewards.

4. Primary Goals: Capturing Millennial and Gen Z and Identifying Their Needs

Walkerhill's focus on NFT memberships boils down to two main objectives. The first is to attract younger customers, the country’s so-called “MZ generation.” In the hotel business, especially one with a rich history like Walkerhill's, revenue predominantly comes from the 50-60 age group, not from millennials and Gen Z. By offering NFT memberships, Walkerhill seeks to diversify its clientele by attracting millennial and Gen Z customers who are more open to novel technologies and familiar with cryptocurrencies.

The second goal is establishing direct communication with customers to better understand their real-time preferences and needs. As Kim Tae-hoon, Director of Hotel Shilla, mentioned during Xangle ADOPTION 2023, hotels are facing a fresh challenge of diminishing contact points with customers (see Xangle ADOPTION 2023 Part 4: Consumer Goods). The  COVID-19 pandemic accelerated the decrease in customer interactions such as check-ins and check-outs due to contactless services. W.XYZ intends to create a customer-centric, participatory community to actively engage with community members and gain a deeper understanding of their needs.

5. Focusing on Long-Term Over Short-Term

Considering W.XYZ is a pre-mint, revenue might not come in the immediate future. Additionally, the number of W.XYZ NFTs issued in Phase 1 is capped at 48, and these will not be available for secondary sale until after Phase 2. As a result, any substantial revenue is expected to materialize only after Phase 3.

While Walkerhill's contribution to SK networks' revenue sits at 2.6% as of Q1 2023, W.XYZ operates as a long-term initiative of SK networks' Blockchain Innovation Center and thus is under little pressure to generate immediate revenue. W.XYZ appears to have a certain degree of autonomy to navigate its operations, and its focus extends beyond just generating revenue. Instead, W.XYZ is geared towards building a community of super fans that serves as a communication channel with customers, allowing itself to capture customers’ needs and secure millennials and Gen Z as its customer base.