Citing the uptick in retail brands seeking to leverage NFTs for “digitally-enabled, experiential tie-ins,” the investment bank Jefferies recently raised its NFT market cap forecast to over $80 billion for 2025. This number is more than twice the estimate for year-end 2022.
Retail brand adoption of NFTs signals rapidly growing awareness of how blockchain and Metaverse technologies are shaping the evolving internet. With a well-designed NFT collection potentially tied to real-life events, brands can effectively leverage IP to engage communities and gain recognition far beyond what social media and traditional advertising offer.
Equally important, for cryptocurrency projects, working with brands opens incredible avenues for brand exposure and onboarding users ready to adopt NFTs authentic to the brands they support.
But as the Jefferies report suggests, we are relatively early in the adoption curve: to many, NFTs represent new and relatively unfamiliar technology. Similarly, crypto companies frequently don’t have the consumer-facing experience needed to fully address particular retail market requirements. This is where Kairon Labs adds value, with the technical expertise, industry experience, and relationship network that combine to maximize synergies between traditional brands and crypto.
Why Kairon Labs?
Kairon Labs partners with retail, sports, and entertainment brands seeking to monetize their IP as NFTs. We offer support from initial conception to design, marketing, and distribution to help companies navigate the numerous and frequently complex considerations that make or break a successful NFT venture.
For instance, in a context where Metaverse spaces are quickly evolving, brands need to be able to evaluate the technology infrastructure and ecosystem adoption of a potential blockchain partner. Choosing the right blockchain platform involves assessing what a crypto project might immediately offer, and how that project will evolve and expand its services as Metaverse adoption continues apace.
As much as loyal fans might cherish an NFT issued by a brand or sports team, an NFT can be much more than a simple collectible. By linking experiences, events, and merchandise to NFTs, brands incentivize fans to own, trade, and build their collections. Crypto platforms frequently turn to third parties offering NFT design services to enable this kind of audience engagement.
It goes without saying that to maximize the types of audience retention mentioned above, brands need to be intimately involved in a process that involves careful screening of design firms. Kairon boasts an extensive network of industry contacts coupled with the broad industry experience required to successfully lead an NFT launch from the ground up.
Case study: Redbull Racing
In late 2021, Kairon brokered a series of partnerships for Redbull Racing. For its first-ever NFT offering, Redbull Racing sought to engage a broad fanbase that had been unable to attend live events due to pandemic restrictions. An essential requirement was that partners be able to support immersive experiences with sophisticated NFTs. Another consideration was sustainability. Like F1 more broadly, Redbull Racing has been moving quickly to integrate clean energy technologies into its practices.
Kairon assisted in selecting Tezos blockchain for Redbull. As a Proof-of-Stake blockchain platform, Tezos’ speed and energy efficiency are well suited to the values that Redbull promotes. Sweet, an environmentally conscious NFT platform with a track record of working with top brands, including the New York Knicks, was brought in to support NFT design.
The sale to date has met with extraordinary success, with bids for the rarer 3D-model NFTs of Redbull cars surpassing $15000. To pave the way for future NFT projects, Kairon continues to serve Redbull as both technical and networking advisor, supplying expertise on emerging trends and offering relevant industry contacts.
Case study: Tomorrowland
Kairon has also worked more broadly in the entertainment industry, for example, with Tomorrowland, the organizers of world-renowned electronic music festivals. As live events opened up, the Tomorrowland team began exploring how NFTs can be used to incite audience engagement across a globally distributed fanbase.
Tomorrowland partnered with Kairon Labs to plan and execute the release. To support seamless NFT transactions, Kairon selected the Solana blockchain to build on. As a next-generation smart contract platform, Solana is fast, inexpensive, and eco-friendly. The exchange FTX US, which already features a thriving NFT marketplace, was enlisted to host the sale.
The Winter 2022 Tomorrowland drop comprises 6500 NFTs, each representing one of 18 different variations of a single artwork. The different variations each have a different rarity level, but buyers are unaware of what they will receive before purchase.
The NFTs themselves are tied to perks, entry to special events, contests, and giveaway promotions that will be offered over time. Rather than being locked into one event or item, the value of these NFTs extends and grows over time.Owners can resell their NFTs on FTX, with a minimum commission off of each secondary sale returning to Tomorrowland.
The NFT “mint” opened on March 26. As of mid-April, the combined volume of initial and secondary sales is just under $600,000 and rising. Tomorrowland immediately began offering perks to NFT holders, such as entry into private concerts, that drive increased demand and galvanize its community.
Bringing value to crypto
The success of NFT collections that have become household names like “Bored Apes Yacht Club” underscores the value of engaged communities. Both brands and blockchain platforms bring to partnerships their loyal groups of followers for whom NFTs can be a catalyst for growth.
Blockchain platforms that partner with brands frequently enjoy on-chain exclusivity. Consider the Tezos-Redbull example. As Redbull brought its popular NFT collection to market, Tezos secured a prime spot for their logo on the Redbull car. More importantly, Tezos has the right to build any subsequent Redbull blockchain-based offering.
The deal brings value to Redbull and Tezos, setting the stage for long-term shared growth.