By CNBCTV18.com IST (Published)
CNBC-TV18 explains what POAP NFTs are and how they work.
NFTs have grown massively in popularity in recent years. They have quickly moved from a relatively unheard-of asset class to a fast-moving and lucrative space that almost every artist, celebrity, and brand want to tap into.
The exploding sales figures of the NFT industry are proof of this rapid growth. NFT sales hit a whopping $40 billion in 2021. This year, NFT sales touched $42 billion in the first six months alone. The rising popularity of NFTs has also led to several new offshoots of the technology, one of which is POAP NFTs.
This novel addition to the digital asset class has its own story of evolution. POAP NFTs have only been around for the last couple of years. However, they have quickly transitioned from a simple form of memorabilia to being used by some of the biggest brands as a means to appreciate loyal customers. Tag along as we explain what POAP NFTs are and how they work.
What are POAP NFTs
In the past, concert-goers or event attendees would safeguard ticket stubs or posters as memorabilia or proof of attendance. However, with the rise of metaverse and Web3, things are bound to change and POAP NFTs are here to lead the way.
The POAP website describes these digital assets as the “bookmarks of your life” that are “minted in celebration of life’s remarkable moments.”
Short for Proof of Attendance Protocol, POAP NFTs serve as digital memorabilia or mementos. The POAP platform allows event organisers to better engage their audiences by offering them customised digital souvenirs in the form of NFTs.
Those who receive the POAP NFT have bragging rights to the places and events they have been to. On the other hand, the organisations issuing these NFTs now have an accurate means to track and engage their most loyal audiences, and this is where brands come into the picture.
How can brands use POAPs?
Brands like to reward loyal customers for their interaction with the organisation. They could provide exclusive offers, additional discounts, or first dibs on a product range to customers that regularly attend their events, participate in their online contests, and actively engage in other such activities.
However, brands rarely have an accurate means of tracking who attended and participated in such events. Thus, with no way to prove attendance, rewarding the right customers is extremely difficult. This is where the POAP NFTs enter the picture.
Brands can collaborate with POAP to distribute customised NFTs at their events. These NFTs help track the brand’s most loyal customers. Customers who rack up more of these NFTs are those who actively participate in brand-related activities.
Therefore, these innovative NFTs help brands track and reward the right customers. They also allow brands to create a collection of unique NFTs for specific events. While these NFTs are distributed for free, their exclusivity could create rarity over time, translating into monetary value on the open market. Therefore, POAP NFTs can also act as a means of incentivizing customer participation.
Brands that are using POAP
As of April 2022, more than 4.5 million POAP NFTs were issued to hundreds of thousands of collectors and customers. The POAP platform has also tied up with some of the leading brands in the world, including Adidas, Budweiser, Coach, Lollapalooza, the US Open, TIME Magazine, FOX, and more. With such rapid growth, POAP NFTs seem like they are here to stay.