Billion Dollar Brands
Breaking down the importance of billion dollar brands entering Web3
It’s been a historic week in the Web3 World with the ethereum blockchain completing its transition from a proof of work to a proof of stake protocol.
This is a much needed improvement to ethereum at a time whereby we are witnessing billion dollar brands adopt both layer 1 and layer 2 ethereum solutions — most notably Starbucks choosing Polygon to issue its new NFT collection.
Billion Dollar Brands
Breaking down the importance of billion dollar brands entering Web3...
The Web3 World is in its infancy.
The key characteristic of Web3 in 2021 was the creation of NFTs projects by startups trying to build new brands, however, in 2022, we are witnessing established brands with decades of success entering the Web3 world to capitalize on this new commerce network.
This is a very positive development for this new category of consumer goods, and the adoption of this new technology by these billion dollar brands shows no signs of slowing down anytime soon.
Starbucks Enters Web3
Starbucks, a $100+ billion company shared significantly more details this week on their plans to leverage NFTs to improve its wildly successful rewards program that currently boosts 25+ million users, and accounts for 53% of the purchases made in store.
As part of this announcement, Starbucks answered the all important question: What blockchain will they be building on?
The company has confirmed they will be leveraging Polygon, an ethereum scaling solution, a move that should come as no surprise given the exponentially lower transaction fees users will incur to purchase & sell NFTs issued on Polygon vs Ethereum.
This move by Starbucks is part of a much bigger trend we are witnessing whereby billion dollar brands are creating true utility centric digital goods, that just so happen to be NFTs.
This statement sets a very important standard as it makes it crystal clear that consumers won't need to understand NFT's to adopt them.
Why is this such an important standard to set?
The overwhelming majority of consumers don’t care what coding language was used to develop their favorite apps, and we shouldn't expect consumers to care what database their rewards points are being hosted on.
The decade of success Starbucks has had with their royalty program certainty suggests that they understand this better than anyone else, and yet they have committed to using a blockchain to create these new digital goods – a very bullish sign for the adoption of NFTs.
Starting Small (Today)
Starbucks entrance into Web3 isn’t going to impact every consumer using the Starbucks app tomorrow, in fact it will take many months to roll out this.
That said, as Starbucks expands this program, there’s easily a world in which Starbucks will single handedly 10x the number of consumers who regularly interact with NFTs.
This is the power of 100+ billion dollar brands.
Companies Copy What Works
If Starbucks can successfully demonstrate that leveraging blockchains to build customer reward programs is an improvement vs using the existing infrastructure – we would wager many more companies, both small & large will in time copy Starbucks approach.
While it’s still very early days for Starbucks building digital goods on blockchains, we are personally very bullish on their ability to make a significant positive contribution in the adoption of Web3.
The company has an incredible track record with digital products, and with the same person (Adam Brotman) who built this reward system now helping to develop Starbucks Odyssey – it’s crystal clear that the company is fully committed to using NFTs.
While we don’t expect Starbucks NFTs to appreciate in price by 1,000,000% – it’s undeniable that having Starbucks help spread the adoption of NFTs will be one of the most significant catalysts the Web3 World has ever experienced.
Additionally, we are very excited to see NFTs transition away from being broadly viewed by the general public as speculative assets, to digital goods that unlock utility.
While companies such as Floor have already demonstrated the viability of this utility centric model; Starbucks have an opportunity to redefine the public perception of NFTs in ways that no existing NFT project possess the power to do.
3 Things You Need to Know
1) Epic Games Works With NFTs
Epic Games, the creators of Fortnite, have listed the first NFT-based game on their store, Blankos Block Party. The web3 game has amassed over one million players to date.
2) NFTs Don't Damage The Environment
Whereas once people could claim NFTs were doing damage to the environment, and such criticisms had merit, following Ethereum's merge from a proof of work to a proof of stake protocol, such claims no longer hold a single ounce of validity.
If anyone talks about NFTs wasting energy, send them this image from now on.
— Loopify 🧙♂️ (@Loopifyyy)
Sep 15, 2022
3) Forging Their Way To $10,000,000
RTKFT's first season of physical redeemable merch went exceptionally well.
The company that was acquired by Nike continues to push the boundaries of what can be done with NFTs, whilst making millions!
Food For Thought 💭
The Metaverse is already here, however, it's not what we might think.
While companies such as Meta (formerly Facebook), Microsoft & Apple continue to invest billions of dollars to improve the hardware consumers will need to experience AR & VR, companies such as Roblox & Epic Games have already created Metaverse experiences.
These Metaverse experiences are primarily being experienced by children today, however, the continued adoption of these games by this demographic suggests the adoption of immersive digital experiences has already passed the point of no return.
Slide from my revamped Metaverse presentation.
In August, Roblox hit all-time-high of 59.9MM DAUs and 4.7B hours of on-platform engagement (Roblox also ranks 4th on YouTube, the largest video platform... ever)
— Matthew Ball (@ballmatthew)
Sep 16, 2022
Floor hosted another town hall last week.
Several announcements were made, including new product features & new programs Floor is creating to continue to support our community.
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