Despite recent downturns in the non-fungible assets market with NFTs being caught up in crypto winter and tightening monetary policy, the mass adoption of NFTs is still strong. This is evidenced as the number of digital wallets owning NFTs has more than doubled this year from 3.36 million to 6.14 million (NexChangeNow as of 9/2022) and with a slew of large companies in a variety of industries announcing more collaborations to further develop their NFT assets and strategies. Firms ranging from Tiffany, VISA, Christie’s auction house, Warner Music Group, Coca-Cola, Budweiser, and Adidas have announced that they are intent on exploring this creative toolbox. Continuing large dollar investments remain a bullish indicator on the long-term prospects of NFTs mixing well with business strategy.
A recent article by four Bain & Company partners looked through the current market weakness to focus on the more relevant and promising benefits of the underlying technologies for business clients. “NFTs provide an ideal set of capabilities to reimagine how companies engage their customers”. The real value is on the creative ways that NFTs can make any brand in any industry more memorable and inviting.
The article goes on to remind us that we are still very early in this space with the first NFT created in 2014 which was embraced by the artist and design communities. The opportunities and creative applications are just beginning to be explored by the business community. Also, to expedite more mainstream adoption, it is suggested that three components are needed for a robust NFT system to take hold: the user experience is still clunky, nascent regulations have not standardized, and high transaction fees and a large carbon footprint plague NFTs.
To get a better understanding of where we are and what is the potential for businesses with NFTs, we reached out to our newest Institute member Divya Prashanth, CEO of London-based HQNFTs.xyz – a revolutionary world first No-code advanced NFT creation platform which also provides rarity ranking and sentiment analysis. This essentially makes their platform to NFTs what Wix is to websites. We asked her questions to learn from her active experiences and innovative perspective on the NFT landscape.
Hortz: What was your motivation for starting HQNFTs.xyz? What NFT industry challenges are you addressing with your platform?
Prashanth: I am an artist and a developer. While talking to my artist friends, it became very evident that blockchain and the skillsets required were the biggest blockers to adoption. In some cases, artists were unwittingly putting their NFTs on shared smart contracts on the marketplaces and in some cases losing their IP. So, there was a need for a No-Code platform where creatives could design their NFT collections without a singe line of code and own their own smart contract on their creations.
Hortz: What were your first steps in figuring out how to go about building solutions to those problems and how did you design your technology to address those industry challenges?
Prashanth: Firstly, I spent some time looking at the tech that was available and the points of friction for the artist. I looked closely, examined the process steps of creating an NFT collection, and identified the challenges faced from the perspective of the artist to make it frictionless. Then I realized that even for a developer to create an NFT collection on their own, an NFT smart contract was quite manual and cumbersome at times.
This led me to design a user experience like WIX. Where artists or creators who wanted to create NFTs collections on their own smart contracts could do it without a single line of code. Making the experience like building a website on WIX or Godaddy.
Hortz: Can really anyone, even me who can’t draw stick figures well, be able to create NFTs on your platform?
Prashanth: In this version you will need some photoshop skills to put together the layers for the PFP NFT collections.
In the next release, we will be introducing text to Image AI. This will create the NFT from scratch based on the text description and put it on the blockchain.
Hortz: What tools or guidance do have on your platform that can help people create NFTs that have value or utility?
Prashanth: Besides users receiving a step-by-step guide on how to create an NFT collection on our platform on registration, we built a number of strategic tools to provide further guidance.
NFTS have a value determined by the economics of supply and demand. For NFTs, understanding the rarity and the underlying value is key. Creators of NFT can deliberately create rarity within their collections, via the attributes of each NFT within the collection. These attributes could be elements within the artwork, in addition to this, holders of these rare attributes could also have access to unique and exclusive utilities.
NFTs and their value are nothing without community, Pudge Penguins is an example of this. It is a collection of 8,888 NFTs which were created by a community who wanted to be seen as a beacon of positivity through empathy and compassion. In addition to the art, utilities have also been added to these NFTs which offer exclusive experiences, events and much more for the community.
Our rarity ranking tools on our platform rank the attributes of each NFT within the whole collection by its attributes and their rarity. As each NFT has numerous traits, there has to be a way in which the rarity score can be calculated as a single number. There are several ways in which the rarity score can be calculated. They include trait ranking, average trait rarity and statistical rarity.
However, the rarity of the traits is only one part of the valuation. As I said earlier, NFTs are nothing without community, what the community considers rare is also a key element, which is often missing for the calculation. Through HQNFTs platform, we solve this problem by also tapping into the sentiment and emotion of the community, which uncovers hidden gems which could be under-valued.
Hortz: Besides the artist and creator community, what kind of business applications are you seeing? Can you give us a few examples.
Prashanth: While solving this problem for the artist and creator community has been a passion project of mine, the applications are far and wide ranging. We are both enablers for brands and other businesses to move to the Web 3 space and get metaverse ready!
Some examples include creating digital twins for brands; Adidas did this. Obtaining new revenue streams by repurposing and digitizing old catalogues for magazines or sports clubs. Creating limited edition merchandise using NFTs for special events for organizations. Firms, for marketing campaigns, bringing to life much loved fictional characters, e.g., Top Cat, Spiderman etc. by putting them on the blockchain, which would otherwise be gathering dust in the storerooms & archives of broadcasters.
Hortz: From your perspective on the evolving NFT landscape, what advice or recommendations can you share with business marketing, PR, and strategy executives on how to use NFTs as a competitive positioning and engagement strategy?
Prashanth: When I am asked this question, I always reference Bill Gates being interviewed by David Letterman when the Internet was kicking off. Fast forward 27 years, and the biggest companies such as Google are all web based. My advice to marketing, PR and strategy executives would be to ensure that they are not left behind by starting to build now, so that they will be well positioned to be web3 & Metaverse ready to enable them to thrive.
Brands like Adidas are leading the way in engaging with their audience in the Web3 space. They sold out a collection of 30,000 NFTs at a profit of $23,000,000 in a matter of minutes. Adidas’s NFT drop promises access to real-world and metaverse goods for holders of their NFTs. The trend is now slowing down; however, Adidas is in a good place due to starting early and positioning themselves for competitive advantage.
Established companies took years to make their mark in the Web1 internet space. Web3 with NFTs will not be any easier. There will be a steep learning curve, but firms need to start somewhere and start small. The path of least resistance is to start with a small NFT PFP/Collectable collection that you develop with your audience in mind. Other approaches include tying the NFT to a physical product or service, access to an event, or gamifying a brand ethos. Being experimental with NFTs as a way to more deeply engage with different client/prospecting groups like GenZ audiences is an energizing way to build awareness & loyalty.