Building a next-gen creative powerhouse - L'Oréal

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It’s time for a break and your weekly dose of blockchain-powered ideas.

Brands have been at it, and we have selected an especially innovative project.

?? In this week’s case study, we’ll focus on 欧莱雅 .

When an institutional brand takes a giant leap of faith into web3, it’s worth at least looking into it and reflecting on what it means.

Let us first give a bit of context.

DAO stands for Decentralized Autonomous Organization. Simply put, it is a tool that any entity or group of people can use to make decisions on the blockchain.

In essence, no one controls the DAO - which is self-governed.

Few traditional players have dared to get in bed with DAOs so far.

Although they may be one of the most promising web3 tools, DAOs are often overlooked by companies.

They hold tremendous disruptive potential for organizations in terms of governance and stakeholders’ involvement.

Building a next-gen creative powerhouse

WHAT

NYX Professional Makeup , a L’Oréal-owned brand, announced at the end of January 2023 the launch of GORJS, a DAO meant to create the future of digital beauty.

The DAO will serve as an online beauty incubator for crypto-savvy makeup artists and web3 creators. The move comes after a previous metaverse activation in June 2022 when NYX hosted a pride campaign in The Sandbox with POC - People of Crypto, a hub to foster diversity, participation, and representation in web3.

The DAO aligns with this strategy and reinforces the brand’s vision towards increased inclusivity and participation.

NYX also aligns with parent company L’Oréal which has started investing in web3 company Digital Village and web3 patenting activities.

WHO

The program targets “rising makeup creators and young creators in the beauty industry” - specifically web3 natives.

Regarding demographics and online behavior, one could expect their target to be young and who spend most of their time online.

HOW

DAO members can propose ideas, discuss and voice their opinions casting votes using a special kind of tokens - soulbound tokens - that can’t be transferable.

Each member can influence the decision, but the more tokens held, the higher the voting power.

Tokens will primarily be allocated to the community, which includes NFT holders and creators.

As for now, NYX has granted early access to those purchasing a digital pass (FKWME NFT), which came with 400 governance tokens at a price of ETH0.19 (~ USD270) per pass.

WHY

By implementing a DAO, L’Oréal bets that it will create an ever-more inclusive platform for customers and creators - where everyone’s voice is heard and matters.

At DVRS, we see DAOs as the next level of community building.

Not only do people have a say in crucial project decisions, but they are also financially invested and thus want the project to succeed.

By involving creators, they leverage their clout and network effect to incentivize and push them to submit their ideas.

L’Oréal is building a virtuous economy model for everyone to have skin in the game and thus maximize the quality of outputs they receive.

Closing thoughts

L’Oréal is an umbrella brand, and innovation is part of its DNA - it has been the first company to implement an AR function within its app to try out makeup before making a purchase at a global scale.

Let us also remember that L’Oréal is a behemoth of the cosmetic industry.

Since they have many brands under their belt and (almost) unlimited resources, they can run tests on different segmented audiences and brands without hurting (too much) their mother brand if things do not go as expected.

The fact they chose NYX to implement a DAO of its own is no surprise.

NYX resonates already with a tech-savvy young audience which will maximize chances of adoption and success.

In addition, makeup does fit very well with the new virtual worlds’ aesthetics, and there are a lot of possibilities to play around with AR filters, avatars, and skins - all of which GenZers and young Millennials are very accustomed to.

We must acknowledge that this web3 entrance is quite remarkable for a strong web2 brand as the DAOs’ intricacies and concepts are often difficult to embrace and deploy for an established player fully.

However, the hardest part is yet to come for NYX.

It has to roll out seamlessly its DAO roadmap - convincing web3 enthusiasts and tech-savvy people to follow along.

This entails securing key partnerships with prominent web3 players and key opinion leaders, building sustainable and fair tokenomics, and maintaining the interest and engagement of fans, creators, and curious minds over time.

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