NFT — a non-exchangeable token — surged in popularity in 2021. BoF Insights reported sales of $10.7 billion in Q3 2021, more than eight times the volume of the previous quarter — a figure that has been steady over the past two quarters.
At the BoF Professional Summit: A New Frontier in Fashion and Technology, Highsnobiety co-founders Jeff Carvalho and Matt Powell of NPD Group joined Coinbase product manager Ejaaz Ahamadeen to debate NFT’s position in the fashion industry.
Today, their use cases have expanded beyond digital artwork to include applications such as pre-purchased tokens that create a strong secondary market among consumers, or even as a strategy to unlock community-built experiences and create a stronger brand ecosystem.
Coinbase, a secure online platform for buying, selling, transferring, and storing cryptocurrencies has been a pioneer in the market since its founding in 2012, operating as the largest cryptocurrency exchange in the United States by trading volume. Today, Coinbase has 89 million verified users worldwide, 1000 institutions, and 185,000 ecosystem partners in over 100 countries.
Although primarily known as an exchange and storage service for bitcoin, Coinbase not only offers a variety of other crypto and fiat currency exchanges, but also makes significant inroads in the NFT space. This month, it launched the NFT marketplace for all users. The venture was born out of the company’s belief that the NFT community doesn’t just want better tools for buying and selling NFT — they want a better way to find it, to access the right communities, and to exist in a space where NFT supporters spend time.
Here, BoF shares exclusive insights from Coinbase’s Ahmadeen shared in the debate.
Separate the Hype from the Commercial Opportunity
EA: “There is no denying the immense euphoria and hype at NFT over the past year and a half. As with any new technology, there is a lot of hype that can replace its true value, from a technology perspective. But it’s the same as what we saw with web1, when we saw the dotcom boom, and we saw unlimited websites popping up. What then happens is just a constant cycle of innovation. What is undoubtedly true is that, in every new technology cycle, we see new innovations in it. We see more [use-cases] and in the end we see more value for the individual. We’re very early on — if we had this conversation in the next few years, I think it would be very different again.”
Commercializing Existing Customer Use
“We’ve seen people start using NFT as a new way to communicate — as a kind of “online digital flexibility.” If you think about the evolution of goods, you have basic goods, which are very important, then luxury goods, which — for a long time — have always been physical. Why? Because you can hold it, have it [and they’re] unique and authentic for a brand. This [has] develop into digital value. It happens to a lot of things. Money, for example, has now become digital information.
The stakes here are in the years to come — the world, your digital world, your personal life, your online identity, your presence and your personality, are [all] will become more important to some degree than your physique. The idea is — how the fashion industry engages in building community, presence and influence.”
Build New Community Engagement Tactics
“NFT is a new way to present yourself in an increasingly digital world. Although the metaverse is not yet explicitly defined, we all agree that it will be a much more digital world. So, if that’s the case, how do you define it and build community?
Adam Bomb Squad — an NFT project by The Hundreds — is a great example of building a token-gated community. Where token gives exclusive access to drops. At its core, it’s all about engaging the community in more ways. Brands are looking for more ways to engage with their consumers. They asked, “how can I interact with them? How can we represent us? [community] effective?” Offering your customer base a new way to engage will [critical].”
This is a sponsored feature paid for by Coinbase as part of the BoF partnership. This interview has been edited and condensed for clarity.