Web 3 lessons from two of the worlds biggest brands

Hi everyone,

Welcome to Issue #10 of Sports 3.0!

I hope everyone is doing well, thank you for being here as always!

We've had a little Sports 3.0 summer break with various work and family commitments (Tour de France, holidays, weddings, a teething 8 month year old 😵)but we're back!

🔥 Some exciting news we've been working on. By demand, there are plans to grow the Sports 3.0 ecosystem and community so we will soon be launching a Telegram group!

A separate email to come regarding that soon where you will be able to gain access!

If you're not yet signed up join a host of sports industry innovators across rights-holders, brands and athletes who are, by subscribing below 👇

And with that, onto today's newsletter....

What we can learn from luxury brands about entering Web3?

For sports teams, rights-holders and athletes, the world of Web3 can seem intimidating, and knowing where you as a team, brand or athlete can fit in is tricky.

Today I wanted to look at a couple of interesting lessons sports can learn from luxury brands who have done well to make their mark in the Web 3 space.

There are two lessons I want to unpack here:

1) How to craft entry into the space around current Web 3 culture 

2) How Tokenised approaches can benefit brands and rights-holders

Let's get into it 👇

Tiffany

Last week Tiffany announced they are making 250 of these luxury CryptoPunk pendants available to CryptoPunk holders only, full of different gemstones and available for an eye watering 30 eth each (approx $50k/£40k).

Spoiler, they all sold out raking Tiffany in a cool $12.5m. But this isn't what I want to talk about.

There are a couple of aspects to this that we should pay attention to.

Firstly, Tokengated Commerce.

What do we mean by 'Tokengated Commerce'?

This isn't a new concept, but it will be a phrase you will hear much more over the next couple of years, and will form the cornerstone of many sports digital asset and token collections.

The premise of Tokengated Commerce is that to access certain products, experiences, content or parts of a community, you need to have a certain token in your wallet.

Within the Web3 space over the last year we have seen many example of this as it's basically a nice way of adding utility to NFTs.

Examples can be as simple as NFT holders getting access to exclusive Discord channels based on being a holder, to more product based examples.

In the example of the Tiffany pendants, if you don't own a Punk, You can't buy the pendant.

Tokengated Commerce for me is one of the obvious trends we will continue to see when it comes to executions of Web3 commerce, particularly as Shopify enabled Tokengated Commerce through their platform earlier this year.

{For more on Tokengated Commerce checkout this brilliant article from Not Boring}

But why is Tokengating relevant as a commerce tool?

Well, this ties into the second important observation around this Tiffany project.

It can be permissionless.

What do I mean by this?

Neither CryptoPunks or Yuga Labs who own the brand, were actually not involved in this drop.

Because Punk owners have the right to use the IP of the Punk they own, they can buy/sell/commission any replication of that Punk as they please. However this isn't the most interesting part for me.

Tiffany, and other brands that have used Tokengating, simply write software that reads whether the customer has the particular NFT.

In this instance, Tiffany are able to instantly target CryptoPunk owners, who are high influence and high net worth individuals in the NFT space. They hack access to the community & people who are at the forefront of new aspects of culture!

And it's this aspect of the activity and Tokengating that in theory never needs permission from the NFT creators, and I think can be very interesting, and even concerning for some rights-holders! 

We have seen similar things happen with payment solutions recently too...

Gucci

Gucci are not new to the Web3 space, however this week they gained headlines for doing something rather significant. Accepting payments for product via Ape Coin, the governance token of Bored Ape Yacht Club.

But why would they do this?

Again, they recognise that holders of $APE are at the forefront of culture.

This is effectively a hack to align their brand and establish Gucci as a desirable and relevant brand amongst the community.

It's great for Ape Coin too! It provides some legitimacy to the token, and in the days after the announcement increased its value by approximately 10%.

Where sports rights-holders and brands come into this?

It's exciting when you get into the weeds of potentials around the principles of Tokengating and Web 3 Psychology.

In Web 3, your wallet plays a central role.

It's like your Passport. And it provides a unique suite of opportunties and experiences which you can unlock based on whats inside, where the smart contract does all the heavy lifting.

The tokens inside create feelings of community, identity & exclusivity.

This can be very powerful for fan engagement.

For example, we've previously spoken about the core utilities of Proof Of Attendance tokens in Issue #4, effectively free NFT's which can act as a bookmark of recognition of attending live events.

It would be very simple to tokengate reactive product to a specific event exclusively for holders of the relevant Proof of Attendance token.

You could even design specific tokengated accessed content or product for fans who have collected all attendance tokens over a season.

Really simple, but really effective.

The Permissionless aspect of tokenisaton creates two opportunities when it comes to sports brands launching in the Web 3 space.

1) Offering tokengated benefits to owners of well established NFT projects can be a shortcut to relevance within the space - as per Tiffany and Gucci 

2) Guerilla marketing and commerce can actually be taken to a whole new level. Non-affiliated brands with sports teams or athletes could easily programme in benefits to holders.

This may sound scary, but consider the flip side.

It could actually incentivise fans to hold your token, and even draw in new fans.

The most highly engaged fan bases would be targeted.

And if you have multiple brands offering benefits, official or not official, it could increase desirability and value for the NFT/token.

Food for thought. I think we could see some of these tactics playing out sooner rather than later!

🚀 Level Up

Hungry for more? Here are a few further things I've hand curated this week that I think you may be interested in:

👀 Look out for... This is a platform development, but the next upgrade to Ethereum has been announced to complete mid-September. Ethereum, as the leading blockchains where many NFT's have been brought to life has been help back by environmental concerns and held back by scaleability issues. Without going too technical, this will. help solves those problems! 

🎧 Listen... One of my favourite podcasts is Web3 Breakdowns. They cover an array of topics, platforms and developments in Web3. I recommend starting with this episode on Tokengated Commerce to expand your knowledge from todays newsletter. 

📖 Read... I've just started reading 'Navigating the Metaverse' by the excellent Cathy Hackl. If anyone else has read/wants to read maybe we can chew the fat in the future as a first round of the Sports 3.0 book club in the incoming Telegram group!

🎁 Donate... If you want to donate to a good cause Blockasset have collabed with Oleksandr Usyk to raise money for the Usyk Foundation and Ukraine.

That's all for this week!

If you enjoyed this insight please feel free to share with like minded friends and colleagues.

Thanks & see you next week,Richard Johnson

P.S I'd also love your feedback. Vote on your thoughts below to help shape the Sports 3.0 content that's helpful to you 👇