Leveraging NFTs for Community Engagement

As the digital landscape evolves and Web3 technology continues to disrupt traditional business models, startups in this arena face a unique set of challenges. One of the most pressing of these challenges is fostering meaningful and sustained community engagement.

Look let's be honest, the traditional web2 playbook doesn't apply and is going to be as relevant as the yellow pages is to Google. Welcome to the decentralised world, welcome to the world of web3. Where the engagement strategies must be as innovative as the technology behind it.

At Altcoin Edge, we understand that the key to thriving in the Web3 world lies in leveraging the very elements that make it unique. As a founder of a Web3 startup, you might wonder how NFTs fit into your marketing and engagement strategy.

But first, what are some challenges associated with building an active engaged community

1. Technical Learning Curve: The Web3 world is built upon advanced technologies like blockchain and smart contracts. The technical complexity associated with these can be a barrier to user engagement. It's not just about creating a groundbreaking decentralised application; it's equally crucial to ensure that your community can comfortably navigate and utilise it.
2. Sustained Engagement: Unlike traditional communities, engagement in the Web3 world is often tied to the volatile market dynamics of cryptocurrency. This can make it challenging to maintain consistent, long-term engagement, especially during bear markets. We've seen it across our socials with some of our channels dropping up to 40 %
3. Trust and Security: Given the pseudonymous nature of Web3, establishing trust can be challenging but is crucial for community engagement. This is why it is crucial for the founders to be part of their community chat! Get involved founders nothing builds trust more than your presence!

The crypto and Web3 sectors thrive on network effects and collective endeavour. A silent or disinterested user base would feel as eerie and noticeably wrong as a football stadium during lockdown – desolate and vacant.

A community becoming inactive triggers a domino effect: diminished transaction volumes, lower liquidity, and ultimately, a gradual decline, culminating in the project's demise. A case in point would be the so-called Ethereum killers of the 2017 cycle, such as NEO, IOTA, EOS, and TRON.

For fledgeling projects that haven't undergone their Token Generation Event (TGE) yet, their communities are absolutely pivotal. These early supporters champion the project to secure listings on the right launchpads, amplify its presence across crypto Twitter, and act as its strongest advocates for listings on top-tier exchanges.

NFTS offer a unique opportunity

If done properly, you're not just giving your community another token - you're offering them unique value, a sense of ownership, and an entirely new level of engagement possibilities. You can crucially give them some skin in the game for the overall success of your project.

Our advice would be to avoid launching a colossal collection of, say, 10,000 NFTs. The objective should be to sell out your NFTs and imbue them with value.

A case in point is Artzero, an NFT marketplace built on Aleph Zero. When they couldn't sell out their collection, they quickly pivoted and opted to burn all unsold NFTs. This strategic move served to preserve the value of the sold tokens, demonstrate adaptability and most importantly kept the community onside and engaged.

This tactic resulted in an uptick in the value of the NFTs that had been purchased, simply due to the decreased supply. However, we would suggest an alternative approach: begin with a smaller number of NFTs, perhaps just a few hundred, and ensure they're all sold. Additionally, make it a point to reward key community members with these NFTs as a gift - it costs nothing but can yield great dividends in terms of loyalty and engagement.

Another innovative move from Artzero involved their Praying Mantis Predators (PMP) NFTs. They established a validator node on the Aleph Zero network and opted to share half of the profits generated from running the node with those who staked their NFTs. Moreover, they also decided to distribute 30% of the platform's profits amongst these NFT holders. In essence, they created real utility for their NFTs - shocked Pikachu face.

Artzero then added another layer of utility to their NFTs. They started offering significant discounts on trading fees within their platform, proportionate to the number of NFTs a user had staked. This, though a fantastic incentive, could be seen as favouring the "whales" - those who own large quantities of these NFTs.

However, there's a catch to this system: rewards must be claimed within the last three days of each month. This requirement ingeniously ensures that NFT holders engage with the community at least once a month while they collect their benefits.

In contrast to the Artzero PMP strategy, Porsche, the luxury automobile manufacturer, embarked on a bold project. Their plan was to release 7,500 Ethereum NFTs centered around their iconic 911 sports car. Unfortunately, their decision to set the price of each NFT at 0.911 ETH (~$1,475 at that time) was a miscalculation given the prevailing bearish market.

After the public mint was initiated, sales diminished substantially, and the NFTs were swiftly being resold for less than the minting price. In the end, only about 1,500 NFTs were minted before Porsche decided to reduce their supply and halt the minting process ( halting the minting process is distinctly different to burning excess NFTs)

Essentially, Porsche's foray into the web3 space was a misstep, demonstrating a lack of understanding of the web3 community. The experience of Artzero PMP is a prime example they could have learned from to avoid such pitfalls.

Experience is key in web3 and we have quite a bit of it. So if you've any questions or ideas book and meeting and get in touch.

We offer expertise in:

?-Web3 marketing

-Content

-Strategy

-Social media

-Community management

-Growth

-PR

-Exposure channels

-Biz dev

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