Non-fungible tokens, or NFTs, as they are more popularly known, have been something of a rage in recent years. These tokens represent the ownership of a completely unique, one-of-a-kind asset. Now, these assets can be anything from images, videos, and memes to clothing and even virtual land! NFTs have been applied in a number of industries and have been nothing short of revolutionary in all of them. Artists, content creators, and even brands have been enjoying the manifold benefits of NFTs.
So what makes these NFTs so lucrative to the buyers and owners? The answer is pretty straightforward – ownership. You can always screenshot an image or save it some other way, but with an NFT, you actually own the asset and the rights to it. And nobody else does. This kind of exclusivity is what makes NFTs so sought after. What’s more, due to the decentralized nature of the blockchain technology they are built on, the authenticity of the asset can be verified with no difficulty.
It is, therefore, abundantly clear that NFTs are driven largely due to their exclusivity. And to take it to the next level, several popular NFT collections have introduced the concept of token gating to reward their NFT holders. What is token gating you ask? Read on to find out.
What is Token Gating?
The beating heart of any NFT collection or project is its community. Token gating is a strategy used by these projects to provide their users with additional perks. This creates a higher value since these privileges are only open to those who hold an NFT from the collection. For instance, take Discord, one of the most popular platforms for NFT users. A project may introduce a separate channel that is available only to those who have purchased NFTs. Similarly, perks like exclusive access to events, content, or even physical products may be given as an incentive to those who buy the NFT, adding another level of exclusivity to the whole deal.
So how can holders access these benefits? The process is surprisingly simple. All you need to do is connect your digital wallet. Once the details are verified, voila, you are part of an extra exclusive club of the project.
What does Token Gating bring to the table?
It’s pretty obvious now that token gating has a lot to offer. And as we move progressively toward the world of Web3, the potential advantages of token gating can only increase. Here are a few of them.
The top advantage is, of course, exclusivity. The most popular NFT collections are all centered around creating the element of exclusivity. In fact, NFTs in general get their hype from the exclusivity that comes from FOMO. And that’s also why the rarest NFTs are always worth more. By creating a very exclusive club for NFT holders, the perceived worth of the NFTs themselves is taken up several notches.
True, token gating is primarily to provide gains for NFT holders, but they have benefits for the creators as well. Through this method, the creators get to control the distribution of their NFTs.
The blockchain is touted to be extremely secure and transparent. As a result, you can verify the ownership and the authenticity of an asset with absolute certainty. While they can be easily accessed by the owner, the loss of tokens from digital wallets is highly improbable.
What makes NFTs so lucrative for artists is that they stand to benefit from royalties. With every secondary sale on a marketplace, the creators earn royalties for their work, and rightly so! Token gating can also eliminate the need for middlemen which means that creators are the ones who solely profit from their work.
Some things to keep in mind
The best part of blockchain technology is the security they offer. However, scammers still exist and can masquerade themselves as legitimate projects. Therefore, it is imperative to be vigilant about the links you click while considering NFT projects. Since token gating, especially, requires you to connect your wallet, the best practice would be to verify the source and the authenticity of a link before clicking on it. Make sure you check their social media platforms, community spaces, and of course, the whitepaper or roadmap of the project. You could gain valuable insight regarding the project from those closes to it. Once you’re sure about your safety, feel free to access the benefits conferred by token gating.
With several brands embracing Web3, NFTs have risen to popularity as a much sought-after marketing strategy. From brand-themed collectibles to loyalty programs, NFTs are helping companies build themselves up and reach out to a wider audience. The consumers, too, find the tokens and the utilities they offer extremely beneficial. Token gating, therefore, definitely takes it up to a whole new level and can be a huge reward for creators and consumers alike.