Preview of NFT.NYC: Driving Ownership of NFTs
Nasdaq’s interest in new technologies is instrumental to reimagining the capital markets of tomorrow. As we explore these new avenues, we recently hosted the C-Suite preview for NFT.NYC conference at MarketSite, connecting Web2 companies to Web3 strategies.
In recent years, interest in non-fungible tokens, or NFTs, has swelled. NFTs are digital assets that utilize blockchain technology to show authenticity or ownership of a piece of media or physical item. While there was a drop in NFT sales last year as geopolitical uncertainty, rising interest rates and high inflation roiled the markets, conference Co-Founders Jodee Rich and Cameron Bale highlighted the evolution of NFT.NYC, as the attendance has grown from 460 people at its inception to 16,000 people last year. During the preview session, NFTs were explored as a fiscal expression of self-identity, with the goal of answering how we use NFTs to bring people together.
Ownership of Intellectual Property
David Pakman, VC and Managing Partner of CoinFund, gave a history of NFTs through his presentation, “NFTs: The Past Present and Future.” According to Pakman, “NFTs are property rights for intellectual property,” with this ownership, digital goods can also be scarce.
“Web2 created an access economy, where the music went from being hard goods you collected or owned, like cassettes and LPs and CDs, to streams,” said Pakman. “The same thing happened with movies; we don’t own VHS tapes or DVDs anymore, we just stream them over Netflix or wherever.”
In the current streaming access model of intellectual property, Pakman believes that NFTs become a general-purpose technology that adds a new dimension where we can own it again. Investors seem to support this concept, as Pakman noted that more than 10 million people spent $50 billion in the last two years buying NFTs.
Because NFTs utilize Web3, which runs on a decentralized blockchain, the content is in various locations simultaneously, and investors can access their data at any time from anywhere. As a result, NFTs can transcend the virtual world and provide a unique connection to the brand beyond ownership of a digital token, according to Pakman.
Essem Harris, Senior Lead Product Manager for Platform R&D at the NBA, elaborated on this notion, focusing on intellectual ownership through the lens of owning unique moments in sports. Harris believes the ownership of a sports moment is not only an NFT investment in a monetary sense but also can be used to communicate and connect with other fans who share the same fandom. He attributed the recent rise in sport-focused NFTs to the popularity of this individual expression to generational culture.
“The way that Gen Z and Gen Alpha people are socializing is completely different than the generations that precede them,” said Harris, who added that these generations do not apply a one-to-everybody approach on social media but rather focus on communicating to their niche.
Building Your Brand with NFTs
As time on digital platforms increases, consumers see the heightening of social identity defined by digital life. Blockchain offers total control over individual data, the infrastructure to manage that data, and revoke access to services. Harris advised if you invest in NFTs, to create a Web3 strategy that is natural to your brand.
U.S. Web3 & Digital Assets Leader at PwC, Matthew Blumenfeld, reiterated the importance of staying true to branding.
“The biggest misstep you can do in this space is to not be authentic and follow your brand,” said Blumenfeld. “It’s a lot cheaper to bring in consumers you already have than to find new consumers.”
He believes that brands should introduce their present consumers into the Web3 space. For instance, when the Metaverse became the next shiny object, Blumenfeld suggested that brands build a cohesive story throughout, just as Nike did with their NFT release by launching a product and then getting into the Metaverse. He advises brands to let consumers drive the strategy as they can help brands tell a consumer story. Brands should find the middle ground of driving revenue through monetizing intellectual property, deepening customer engagement through engaging the creator economy, and improving business processes.
Driving Adoption of Corporate NFTs
The preview event also included an unmoderated panel discussion on “NFTs and the Future of 5th Avenue” with Jeremy Cohen, Head of Web3 Investment at Publicis Media, Dave Torres, VP of Digital Experience at Macy’s, Lisa Mayer, Founder and CEO of Boss Beauties, and Marc Beckman, Founding Partner and CEO of DMA United. During the session, Torres emphasized the importance of simplifying the user experience of NFTs to increase their popularity. Mayer demonstrated this through her company’s collaboration with the cosmetics company NARS. She told the story of a sixteen-year-old girl who was once uninterested in the world of blockchain, but “when she heard of the NARS and Boss Beauties partnership, she set up her very first wallet.” To drive mainstream adoption, brands need to connect with the humanity behind it by simplifying the means of owning one.
However, Cohen acknowledged that one of the barriers brands face is regulatory uncertainty, noting that “without a regulatory framework to operate off of, there is a lot of hesitancy for brands to take exposure to crypto.”
At Nasdaq, we are continuously tracking the evolving regulatory environment as it pertains to digital assets. To stay ahead of the curve, Nasdaq expanded its anti-financial crime (AFC) technology to monitor digital assets to prevent money laundering, fraud, and market abuse. According to Valarie Bannert-Thurner, senior vice president of AFC technology at Nasdaq, “The advantage Nasdaq has is that the company has the capabilities to analyze potentially fraudulent behavior in both traditional markets and digital assets as well.” As the NFT space evolves, Nasdaq is well-equipped to address help institutions overcome challenges and drive adoption.
These concepts, among others, will be discussed in greater detail at NFT.NYC, taking place at the Javits Center on April 12- 14.
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