Tokenization has enabled brands and businesses to unlock a myriad of benefits such as increased liquidity, fractional ownership, and enhanced security. At its core, it involves converting tangible or intangible assets into digital tokens. But what powers this transformative process?

Traditional advertising methods today are losing their effectiveness as consumers are ignoring ads consciously or subconsciously due to “ad fatigue”.

Navigating the world of NFTs often means encountering a plethora of jargons and terminologies. Among these terms, businesses and customers are often presented with the concept of redeemable and claimable NFTs. 

Redeemable NFTs are digital collectibles that can be exchanged for real-world assets, experiences or benefits. They have garnered significant interest from customers as they provide tangible value and create a sense of exclusivity due to their uniqueness.

The NFT market is gradually regaining its footing following the recent crypto winter. But recovery has a long way to go given the consistent decline in daily average trading volume. Yet, major web2 businesses are entering the web3 space and using NFTs to improve customer engagement. 

But why are Web2 brands so interested in utilizing NFTs amidst such challenging market conditions?

This article answers the question, explains the potential roadblocks brands may face when transitioning into the web3 space, and lists examples of web2 brands that are making it big in web3 with NFTs and the right business partnerships.

The NFT ecosystem looks promising as more web2 brands enter the web3 space with collectibles and digital wearables. Recently, it was Dior and 7-Eleven that caught the attention of the masses with their phygital and digital collection respectively. But why are brands invested in NFTs? 

NFTs create scarcity and exclusivity, and it’s easy to verify their authenticity and ownership. Also, it’s possible for NFTs to have special traits depending on their rarity. So, they have numerous applications in the real and digital worlds. That means brands can give away digital collectibles instead of freebies and discounts and create unique customer experiences along the way to improve retention and revenue. 

In the rapidly evolving digital landscape, tokenization is emerging as a powerful tool for businesses to unlock new revenue streams. 

Non-fungible tokens (NFTs) first made headlines when Beeple’s crypto art piece “Everydays: The First 5000 Days” sold for $69 million in 2021. The same year, Sky Mavis, a game studio, released Axie Infinity — a monster-battling game with NFT characters and in-game items — further skyrocketing the popularity of NFTs. 

A large portion of the world’s wealth is locked up in illiquid assets like real estate and commodities. While these provide long-term value and stability they also come with some glaring disadvantages. For starters, the illiquid asset class remains largely inaccessible to the average investor. 

Creators and brands may have relied on web2 and social media for almost two decades, but today, web3 represents the new frontier in community engagement. That’s because blockchain adoption and crypto use are growing exponentially — cryptocurrency markets will reach 994 million users by 2027 with a collective value of $64.87 billion in revenue.