Dynamic NFTs: The future of consumer engagement is onchain

June 2, 2023

NFT ‘metadata’ has mostly consisted of JPGs, GIFs, and MP4s, and the more advanced collections have traits and rarity. Critically, creators haven't changed the metadata, in some cases they even ‘froze’ it to prevent tampering or ‘rugs’ post-mint.

But innovative brand and agency leaders are poking holes in this dogma, and starting to realize what is possible with ‘dynamic metadata’ – updating a consumer's NFT metadata over time. It’s not just about possible new artforms or content, it’s about the fundamentals of how brands and agencies leverage consumer data itself.

“NFTs: your ticket into a brand’s action," wrote MediaMonks Web3 Director Michael Litman.

"We’re entering an ownership era where everyone has a chance to own a piece of the action. This ownership partly lies in NFTs or digital collectibles, which can be many things—an artwork that evolves over time as users get involved, a digital object, and more.”

How will brands and agencies personalize experiences and tailor ads in a future without cookies? How will developers create unified consumer experiences across disparate brand properties or different brands altogether? How can consumers achieve a more elevated digital experience without compromising on privacy?

Dynamic NFTs may be part of the solution. It’s not a consumer-facing term by any means, but it may soon become a key piece of every brand and agency's consumer data and engagement strategy. Here’s an explainer, today’s most helpful use cases, and where we see Dynamic NFTs going at Mojito.

What are Dynamic NFTs?

First it’s worth clarifying: What is an NFT?

An NFT is an unique digital asset owned by a single individual or entity at any given time. This digital asset maintains its own records, too: NFT 'metadata' can reference a near-unlimited amount of content, code, and raw data. When consumers 'connect wallet' to websites or apps, the brand can 'see' what assets they own and 'read' the metadata.

Traditionally, creators ‘froze’ or otherwise swore to never change their NFT metadata after minting. Imagine buying a physical product off the shelf, and by the time you brought it home, the manufacturer had somehow altered it completely, or even somehow ‘deleted’ it. This is why best practice was to never change the metadata: otherwise, consumers couldn't trust its lasting value.

But then some people got creative, and wanted to play with the idea of dynamic onchain art where the work changes over time, and not only that, but changes based on signals it receives from the internet (!!). One of the earliest and most famous examples of this is the Bitcoin Volatility Art by Matt Kane that changes daily based on the past 24 hours of Bitcoin trading activity.

Bitcoin Volatility Art - June 1, 2023

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  • Bitcoin Volatility Art dynamically updates its metadata based on recent market trends, but there's no reason it couldn't be driven by anything else. What offchain sources of engagement data would you wish to capture, reflect or incentivize onchain?

  • Brands and agencies don't necessarily need to do anything other than 'update' the NFT metadata with these touchpoints, and possibly maintain an omnichannel 'consumer profile score'.

  • This would then be 'readable' by any website or app to enable personalized experiences on first-party and third-party platforms. These insights have gotten people in our industry thinking….

LaMelo Ball (NBA) - Dynamic Content

In 2021, NBA star LaMelo Ball sold 10,000 digital collectibles in partnership with Chainlink, a company that specializes in bridging offchain and onchain data, with the premise that if Ball should win the Rookie of the Year award later that season, the collectibles would 'evolve in a more powerful version'. This means dynamically updating its visual appearance as well as its 'rarity', an important aspect of collectibles markets.

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  • Imagine fantasy sports, reality TV, or other 'live data' enhancements driving desirable outcomes in a consumer's chosen collectibles, say, during a prediction or even betting contest. What would be right for you?

Australian Open (tennis) - Dynamic Content & Rewards

In 2022, the Australian Open sold 6,776 digital collectibles called AO ArtBalls in partnership with Hawk-Eye, a company that linked each NFT to a specific area on the court and triggered dynamic updates to corresponding NFT for each match point.

AO Artball 'lucky winners' each earned 'upgraded' NFT artwork, but also free redeemable tickets to the next tournament.

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  • Upgrade the artwork when relevant, sure, but add loyalty points or access to free redeemables dynamically within the same NFT metadata, and the reward is suddenly that much more real and valuable.

gmoney & 9dcc (fashion) - Dynamic Rewards & Community

Crypto-native lifestyle brand 9dcc incentivizes weekend wear amongst its ambassadors through flash mini-games that generate loyalty points and is only playable if you have the NFC-chipped garment nearby (or preferably, on your person).

Founder and CEO gmoney designed these 'network points' to be a dynamic element within the 9dcc ecosystem, stored offchain but tied to each consumer's onchain identity.

"How do you find and incentivize those fervent brand people to become bigger ambassadors? That’s what I’m trying to mess around with." @gmoney

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  • The future of consumer engagement is onchain. But that doesn't mean that literally all the data is onchain, public, transparent and immutable. Here we see gmoney decide to store his network points offchain for privacy but with an onchain reference (i.e. wallet, NFT pass) to leverage within his own platforms or others where he shares permission.

  • This is indicative of a broader trend within web3 called web2.5 (coined by yours truly!). Rather than decentralizing everything, this term refers to applications that blend centralized and decentralized tech in order to achieve a necessary balance between desirable web3 features, a smooth and familiar user experience, and corporate risk management. This is our specialty at Mojito!

What are the brand benefits for Dynamic NFTs today?

You can’t sell consumers a better database. You need to sell applications and benefits instead. So what can brands and agencies offer with Dynamic NFTs today?

  • Onchain Loyalty Points – Distribute fan or membership passes, then increment/decrement their loyalty points ‘in the metadata’ every time they interact with your brand or redeem rewards. Omnichannel, omniplatform, cross-brand. No fungible tokens necessary. Lightest possible legal and operational lift for web3 rewards program.

  • Personalized Token-Gating – Deliver richer experiences and tailored rewards informed not just by token ownership alone, but all relevant engagement data including social, ecommerce, and IRL. Gate websites, apps, games, and events. Generate and distribute additional points at the point of ‘check-in’ for surprise and delight.

  • Memberships/Subscriptions – Sell time-access passes with expiration dates in the metadata. Consumers may keep their passes after expiration for limited access to certain community spaces or re-entry discounts, but to retain access to members-only spaces, they would need to pay a subscription fee or simply ‘buy more time’ on their expiration date. Token-gates would read not just the presence of the pass but the expiration date within its metadata to determine whether to let the user through.

  • Physical x Digital Enhancements – Pair NFC-enabled spaces, objects, and garments with digital rewards schemes to drive IRL engagement and a bridge from geo-constrained, time-limited physical experiences to boundless, timeless digital ecosystems. Making a bit of a comeback, the humble NFC chip delivers a more delightful user experience than QR codes, and is much more technically capable, too, meaning many clever ways to ‘read’ and ‘update’ a user’s NFT metadata through ‘proof of proximity’ engagement campaigns

"Web3 wallets are the new cookies but the difference is that, this time, it belongs to the customer," said Salesforce SVP Marc Mathieu.

"The big difference is that these people are no longer just consumers, they want to be co-creators co-innovators, collaborators, and co-beneficiaries.”

Here's how to get started with Dynamic NFTs for your brand:

  1. Identify 2-5 key engagements you want to track and reward digitally.
  2. Define 1-2 valuable rewards and thresholds for engagement.
  3. Contact Mojito to get it all done, on budget and on time.

As always, we love talking web3 consumer engagement with brand and agency leaders. Whether you're sourcing tech solutions with a clear scope, timeline and budget in mind, or you're just getting started, Mojito can help you every step of the way. Share your contact details and our team will reach out for an exploratory chat. Get in touch.

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Adopting the Avatar: the Core of Consumer Customization

November 22, 2023

A brief playbook for brands building for the digitally-native generation.

According to McKinsey, fashion companies are expected to double their investment in technology by 2023. This statistic was one of many released during 2021's digital assets boom, revealing an important truth: consumers — and especially Gen Z — care deeply about owning their digital identities. In the two years since "NFT Summer," we've learned a lot about the evolution of consumer habits in digitally-native spaces. These insights can help guide the future of how brands operate and consumers engage in virtual environments. 

As a short follow-up to our last blog post on how web3 is driving a return to the internet's golden age of customization, we're sharing some additional thoughts on how you can build for the next wave of consumer adoption. This evolution is already showing signs of incredible value for forward-thinking brands like Gucci, Valentino, L'Oréal, Adidas, Nike, and many more.

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Web3 Returns the Internet to the Golden Age of Customization

November 17, 2023

This is what it feels like when the future enables what so many users loved most about the past.

MySpace, StumbleUpon, GeoCities, LiveJournal, Tumblr — the early internet thrived on user-driven, customizable experiences that, while rudimentary in design, clunky in function, and altogether useless for major brands (i.e., not monetizable or targettable), offered humans some of the earliest opportunities for representing themselves online. 

Two decades later, across multiple transformational eras of the internet (more on this below), what can we learn from these now archaic — and predominantly extinct — platforms? To start, let's set the stage of the golden age of the web and the subsequent erosion of online customization that followed.

These early platforms referenced above were among the first to offer users a customizable digital sandbox that lacked the restrictions — and intrusive, expensive, increasingly ineffective advertising practices — that is now commonplace across tech. These were platforms on which people created, not platforms on which products were sold.

FAANG companies undoubtedly standardized the internet user experience. These companies built easier ways for people to create and disseminate information while creating the ability for the world's biggest brands to reach these new, content-craving audiences through new experiences and digitally-native business models. However, FAANG-style companies have also contributed to the flattening of the once-loved, now-nostalgic digital aesthetic, eliminating (or narrowing) users' ability to find customization online.

Example: go to StumbleUpon right now, and you'll just get dragged between identical Pinterest boards.

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Implementing Web3 CRM: Wallets Are the New Email Address

November 2, 2023

How to Implement Web3 CRM for Consumers

Your customer relationship management system is your business's beating heart. It’s how you nurture customers, track vital information, and make strategic decisions. 

Now that web3 has entered the fold, traditional CRMs can be augmented. So the question is this: Is your brand prepared for it? And what does the future look like?

Brands can expand upon their CRM data with wallets and token interactions to build loyalty in the changing digital economy. 

If your CRM is the heart, what happens if it can't support your entire customer base along with their actions and interests? Consumers are adopting web3, and you want to be there from the start. 

And with increasingly more limitations on what consumer data brands can collect, store, and use, along with apps and systems that don't talk to each other, brands miss out on data everywhere. 

You need web3 CRM capability to connect wallets and token usage to your web2 data to accurately paint a picture of your customers. 

Enhancing your CRM with web3, you can track and reward engagement across virtually any physical or digital touchpoint and connect it all in one place to analyze and manage.

Onboarding customers to create web3 wallets is the first step to getting started. The good news is that, with Mojito, the process is seamless for new users. They can set it up and manage it with an email address. In many ways, wallets have become the new email address, offering more benefits for customers and providing brands with the holistic data and CRM capabilities they need.

Mojito's web3 CRM collects and pulls all these moving pieces from different parts of the web together to create one remarkably effortless customer experience. 

In this article, we’ll compare the differences between a web2 and web3 CRM, the benefits of using a web3 CRM, and how Mojito might be the right fit.

What’s the difference between web2 and web3 CRM?

The CRMs most brands use do not facilitate the needs that web3 has—the biggest one being connecting offchain and onchain data and creating an integrated portrait of customers across all physical and online interactions. 

Web2 CRMs provide essential data and communication tools to manage emails, SMS lists, social media followers, eCommerce buyers, event attendees, and more. 

But it's difficult to connect every data source you'd like to trigger into your web2 CRM, let alone add new data sources in web3.

Brands can instead use a web3 solution to augment their CRM by connecting data sources in a different way that brings everything together. Companies can create the most connected, data-rich CRM they've ever had. 

Brands require CRM solutions to capture the entire customer data picture across both the internet and real-life experiences. In turn, they create a community-driven customer base, increase sales, and use their CRM for better connections, communication, and data.

Wallets are the new email addresses

It's no secret that brands are losing data through their traditional channels. Big Tech companies are reigning in how much data you have access to, like Apple limiting cookies, and how brands now get an incomplete picture of their customers.

Additionally, as customers interact with web3, your brand is in the dark until you establish web3 CRM capability. 

Web3 wallet addresses are unique identifiers for users on the blockchain. Their address is recorded when they purchase an asset or trigger activity on the chain. With Mojito, onchain and real-life interactions join together in one familiar experience.

As your customers interact with your brand and create or log in with their wallets, you can associate that with their customer profile. 

When a customer logs in on your profile manager, they can add their web3 address, resulting in a holistic view of your customer. 

This is a huge opportunity for first-party data. Your brand can get direct analytics from your activities through a verified, authentic process supported by onchain and offchain interactions. 

Wallet addresses offer a more reliable and extensive way to gather data on customer behavior, help drive engagement, and make better growth decisions. 

Cookies are the new NFTs

While traditional solutions suffer from increasingly limited access to cookies, web3 offers brands a bright and better future.

NFTs are non-fungible tokens. A non-fungible token is a digital asset recorded on a public decentralized ledger called a blockchain. It can be verifiably owned and impossible to forge. 

NFTs make it possible for someone to digitally own an asset, which has changed the future of technology. But it also provides a unique opportunity for web3 CRMs, engagement, and data. 

"NFTs: your ticket into a brand's action." — Michael Litman

Dynamic NFTs utilize live metadata to gather customer information and drive engagement. 

Before solutions like Mojito's Dynamic NFT, non-fungible tokens didn't change. And why should they? People wanted a unique digital asset that would last forever and retain or grow in long-term value. 

But as web3 matured, so did the perspective on NFTs. 

What if the value of an NFT was change?

For example, artists began to experiment as they created NFTs. They would explain that the NFT would change and evolve. This in itself made it valuable and rose in popularity. 

Brands would learn how to use it for data and supercharge engagement only a short time later. Traditionally, metadata remained static, but now Dynamic NFTs update metadata based on consumer behavior. 

Brands can leverage metadata in many use cases:

Loyalty programs: Customers can join membership communities when they purchase a digital pass with Mojito's traditional, familiar checkout experience. Every time they interact with your brand across any first-party or third-party platform, like redeeming rewards or visiting an event, their token metadata is updated and fed back into your CRM.

 

Exclusive access: Brands can implement token gating, limiting access to your brand's NFT or memberships. Gate websites, apps, events, games, and more. When customers check in, their activity becomes trackable.

Enhanced membership and subscriptions: Dynamic NFTs allow brands to sell time-access passes with expiration dates. While owners can always retain the NFT, their subscription must be maintained for full access to benefits. Brands use the metadata to identify subscription holders and analyze their activity (while adding a new revenue stream). 

Customer interactions: Brands use NFC-enabled spaces to connect customers with their Dynamic NFTs and events, physical checkout experiences, and more, intertwining digital and physical customer engagement. When someone redeems a reward by scanning a code or object, your brand can track that activity. 

Web3 solutions like Mojito use webhooks to send data from third parties back into your CRM. Every time a user takes an action, Mojito sends that data to your CRM and vital tools. Your data is collected, verified, and authenticated in one place, on or offchain. 

Mojito offers a cohesive relationship management infrastructure. You can leverage a complete picture of your customers through thousands of interactions involving physical triggers, third-party apps, web2 tools, and web3 activity. Customer actions across the web or in real life can be configured to work with your CRM. 

You’ll be able to understand your customers better than ever and reward them for their engagement at a level that was impossible before. 

Benefits of using a web3 CRM

You don’t have to worry about a bumpy or complex ride when you adopt a true web3 CRM. 

You’ll have all the tools, resources, and tech stack integrations needed to make an enterprise solution for your customers that meets the standards of your brand. 

Below are several benefits you can expect when you connect your web2 CRM to a web3 solution.

1. Bring web2 and web3 data together

Mojito facilitates web2.5, meaning instead of "switching" web experiences, brands and customers can use web2 and web3 with no learning curve or friction at all. All is encompassed in one familiar internet experience.

Users can pay with a credit card or crypto and interact with the online apps they've used all these years (as well as easily using web3 apps). 

Mojito enables brands to collect and pull necessary data to understand their customers through all web iterations and experiences—all in one CRM solution.

They can use the full power of this web2 and web3 data for events, NFT collections, token gating (exclusive access based on ownership), and other digital ownership experiences.

2. Actionable data for better customer relationships 

Every brand wants to improve its customer relationships. Still, as the internet becomes more fragmented, especially with the introduction of web3, improving service and keeping up with expectations will be much more difficult. 

Web2 CRMs are not capable of putting all these actions and platforms together.

However, web3 CRM platforms improve customer relationships by incorporating off and onchain activities through a centralized database.

If brands adopt an enterprise web3 CRM, they can meet changing consumer needs and stand out in the market with better and improved relationships thanks to the tools and possibilities web3 offers.

3. Improved sales and marketing strategies

Now, more than ever, your sales, marketing, and customer service teams will have access to the most accurate and transparent data within multiple channels and communities, all in one place. Your CRM can include customer history, preferences, community management details, and more data points within web3. 

You can use accurate and more abundant data to analyze customer behavior for improved decision-making. A suitable CRM can also help sales and marketing teams provide personalized messages based on their data, increasing conversions and other KPIs. 

4. Next-level customer service 

Not only does better, more current information help improve customer relationships but so does the level of service you can provide.

Your team can proactively resolve issues with real-time data collection (for example, tracking customer engagement and pinpointing areas of opportunity), which increases customer satisfaction. 

Brands can go beyond positive experiences and create the best problem-solving processes and community-building opportunities for your customers.

5. Greater ROI potential

Web3 CRMs connect your stack, improving overall sales, marketing, and customer service and building long-term loyalty. 

These critical benefits offer bigger ROI potential and future growth. By analyzing blockchain activity, brands can track the popularity of certain products, use blockchain-verified data to track inventory and invest in the areas customers are most interested in. 

Web3 CRMs also open new revenue streams, like selling digital assets with NFTs. Brands can even test the reception of new physical products by selling limited sample releases with “NFT digital twins” (when a physical good comes with an NFT representation at purchase). 

6. Strategic positioning 

You can better position your company for the economic shift to the decentralized web with a web3 CRM. 

For example, Mojito's web3 CRM also includes "web2.5" features for the transition. 

Some customers won’t know how to navigate web3—they’ll want simplicity. Others will want every tool available to them. Web2.5 serves everyone. New users can pay with a credit card and have a user-friendly experience. At the same time, web3 adopters can take full advantage of innovation and opportunities with cryptocurrency payments and more.

Brands will serve web2 and web3 users for the internet's evolution, and they'll have a robust CRM foundation for the new economy.