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Token Gating Guide Introduction
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Token Gating Guide: How Businesses Can Increase Customer Loyalty Through NFTs

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All businesses rely on their clients to purchase their products, be loyal and spread the word to others. The easiest way all this can be achieved is by creating a community. By building a network for and of your customers, you can create social bonds which will overall build a sense of belonging. At this point, you know that your customers are loyal, and will find it very, very hard to look away.

There are numerous businesses in the world which know that creating communities is important for their success. We have seen excellent examples like members’ clubs, the likes of Soho House, where entry is only allowed with a purchased membership. This specific gated experience is set in place to create a community of creative thinkers by providing them exclusive bars and dining and hotel rooms.  

Moving on to the digital world, where there are even more ways to create communities. With the revolutionized Web3, community building is more powerful than ever, especially with the help of NFTs. Non-Fungible Tokens, or NFTs, are tokens which represent unique assets. They can be documentation, property or media like pictures, videos and music.  

NFTs have become a sensation in the digital world because of their capability to provide a way for decentralized and secure proof of authenticity over various assets. They gathered the most recognition when NFT profile pictures created a boom in the digital world. And one of the main reasons why this happened is because behind those profile pictures, there are organizations, which created communities through token gating. This token gating guide will walk you through the benefits your business can take on by exploring token gating.

The Token Gating Technology Explained

Token gated access is a great way to limit exclusive benefits for NFT holders only. This will not only boost the incentive to purchase your NFTs, but also the desire to belong to your community. Loyal fans of good businesses want to be recognized, and if you want to give back to your loyal customers, then token gating would be a great way to do so. You can create an elevated value around your business and community of fans through the simple technology behind NFTs and token gating combined.

The first step of creating a loyal customer base for your business through token gating is by having customers in the first place. Then, you should provide them with the opportunity to acquire your NFTs. There are numerous ways in which you can successfully do this. First of all, you can have free NFT airdrops, where a certain amount of NFTs are gifted to customers on a first come first served basis. But if you want to create an additional revenue stream, then you can certainly monetize your NFT drops and sell them to your customers. 

How Businesses Can Create a Community Through Token Gating

This will also work in your favor because you can then confirm that your NFT holders are serious fans, willing to pay for a membership, and not just anyone who’s simply willing to have an NFT. Once your customers have one of your NFTs, they hold the key to unlock the gate you have set in place to limit exclusive perks. Next, let’s look into what type of exclusive perks are worth limiting to only the most loyal of customers your business has.

What Is Token Gating Used For?

Whichever industry your business fits in, token gating is a very versatile tool to use to engage with your customers and thus help to achieve your business goals. Because it is mainly used with NFTs, the are little to no limits in terms of what industries can dive into the NFT and token gating pool. Years ago, we wouldn’t have dreamed of concepts like NFT restaurants or NFT music, but nowadays, we know that these are already accomplished and quite successful. 

What these industries have in common is that even though people think they know them by heart, these industries can always surprise the world with innovations. And so can any business. That is exactly what token gating can bring to your business to make it stand out from competitors. Let’s say that this wouldn’t be the perfect token gating guide without an example of exclusive perks your business can offer to your customers through token gating.

Exclusive Token Gated Benefits
Exclusive Benefits a Business Can Offer to Their Customers Through Token Gating
Exclusive Token Gated Benefits (mobile version)
Exclusive Benefits a Business Can Offer to Their Customers Through Token Gating

You’ve decided to introduce token gating into your NFT business strategy, but what exactly is there to offer? Well, first and foremost, one of the easiest marketing materials to use is merch. Merch is perfect for the loyal fans of your brand because they’ll have a piece of clothing that showcases their loyalty. And having thousands of people walk around the world with your name on their clothes is just free and easy promoting of your brand.  

Then, you can also include exclusive events in the list of perks for token holders only. Whether you are a restauranteur or a musician, your fans will be looking forward to meeting you. And if you’re a business launching products, why not host an exclusive launch party for NFT holders only? 

If your business is focused on releasing music, videos and/or movies, then your idea of exclusive benefits for token holders could be exclusive media. There are successful examples of artists like 3LAU who launched the first tokenized full-length album and generated $11.7M in the NFT auction. Regarding movies, there are examples like the Zero Contact NFT movie, starring Anthony Hopkins, on the Vuele.io platform. Additionally, as an exclusive benefit for your loyal fans, you could enhance some of the products you are already offering by making them one-of-a-kind. 

All these things are beneficial for both your business and your customers. Your business creates hype around what you are offering, it receives more funds and a loyal customer base. Simultaneously with that, your fans are receiving the recognition they deserve and receive exclusive products. At the end, you’ll have created a community, which is the best outcome for your business.

NFTs and Token Gating Side by Side

As already mentioned, token gating is perfect along with NFTs. The thing is, once your customers find out about your NFTs and decide to purchase them, then what? Do you want those NFTs to gather dust in their wallets, making them forgettable? Or would you rather keep your customers engaged through your NFTs so that they are reassured that there was a point in making that purchase, and even to give them the incentive to make another purchase of the same kind?  

If you chose the latter, and good for you for doing so, then you show that you want to evolve your business as much as you can. There are records of NFTs being sold for as much as nearly 70 million dollars. Now consider that type of investment, along with the above-mentioned benefits of token gating. With that much money being invested in NFTs, it goes without saying that NFT token gating is the way forward to flourishing business opportunities. 

Regardless of the industry your business is in, you can reach out to your community of fans/customers and give back to them through a token gated NFT collection. Should you be ready to do this, you should expect great results and profits. There are a lot of examples with NFT communities that show that when the brand creates a collective, the members of it always respond positively. For example, most NFT collections have their own token gated Discord servers.  

Discord is an important platform within the web community. It used to be tailored to gamers online, to create a social platform for them to connect by hosting text, video and voice chat functions, but quickly turned into a universal and beloved platform to many other communities. And another practical function that Discord has is the sub-channels function. Each server can have various channels, be it news around community, memes, geo-specific channels or whatever else the admin wants to create.  

This function lets sub-communities within the specific community have their own space to interact with each other. Alone this social platform is enough on the surface level to create a token gated community. Let’s see what successful NFT collections have done to provide their token holders with token gated content on a deeper level.

BAYC

The Bored Ape Yacht Club NFT collection was launched in April 2021, releasing 10,000 NFTs of bored apes. Each ape is different than the rest, be it through background colors, accessories, or other attributes, making them unique. It is recorded that at launch, each BAYC NFT costed around $200, generating Yuga Labs, the company behind the NFT collection, two million dollars.  

Celebrities like Justin Bieber, Snoop Dogg, Eminem and Paris Hilton amongst many others own BAYC NFTs. However, these celebrities did not pay the original price, quite the opposite, Justin Bieber paid 1.3 million dollars for his NFT, much more expensive than Eminem’s at $400,000. But why would these celebrities pay that much money for NFT profile pictures?

The answer lies within the community they are entering through these NFTs and their benefits for them. Yuga Labs, through the Bored Ape Yacht Club NFT collection, have pulled off a great token gating strategy. A Discord channel is barely scratching the surface of what BAYC can offer its token holders. They are also given limited edition merch and at times, additional NFTs of future NFT collections like the Mutant Ape Yacht Club.  

One of the best perks for BAYC holders is the in-person events. ApeFest is the annual Yuga Labs token holders’ festival, which is famous for epic parties and guests like Timbaland and performing community members Eminem and Snoop Dogg. The 2022 event was held in New York, but the November 2023 ApeFest is going beyond American borders and is hosted in Hong Kong, across three days.  

The perks don’t stop there and BAYC NFT buyers not only own the NFT, but they are also given the full commercial rights to it and the chance to monetize it however they wish to. This resulted in the creation of BAYC wine-labeling companies, restaurants, beverage companies, merch brands and even skateboard decks.

VeeFriends

The VeeFriends NFT collection is another great example of how NFT businesses can incorporate token gating. The collection was founded by Gary Vaynerchuk, also known online as Gary Vee, who is a well-known American businessman and Web3 entrepreneur. VeeFriends Series 1 launched on May 11th, 2021, and was made up of 10,255 NFTs. The NFTs represent 268 unique characters hand-drawn by Gary Vee. What they also represent are values that Gary himself believes his collection and himself have as positive attributes, the likes of “Courageous Cockatoo” and Adventurous Astronaut”.

The collection is also made up of 9,400 Admission tokens, 555 Gift tokens and 300 Access tokens. All tokens received 3-year access to the annual VeeCon, a super-conference hosted by Gary Vaynerchuk on business, marketing, innovation, technology and popular culture. Depending on the rarity of the NFTs, holders also received token gated admission to in-person or virtual events with Gary Vee himself, which vary from wine shopping to one-on-one chats. Additionally, token holders received physical merch and VeeFriends brand collaborations, like VeeFriends x Crocs merch. The collection was a success and apparently generated over $500 million in all-time sales, leading to the creation of a second VeeFriends NFT series.

Benefits of Token Gated Content for Businesses

Your business can do so much with the opportunity for token gated content, that as the saying goes, the sky is the limit. Here are the best benefits of using token gating for your business. 

  • Secure Verification Method – Because NFTs are based on blockchains, the verification for token holders is the most secure and advanced system you can put in place when it comes to token gating. You are assured of the authenticity of your NFT holders, and don’t need to fear counterfeiting with your exclusive content. 
  • Community & Customer Loyalty – You might already have a loyal customer base, but you can never go wrong by going the extra mile for them. Your brand can create a community for your customers to engage and spread their love for your business and cement them as your loyal investors. 
  • Control Over Content – The power within NFT collections lies within its artistic possibilities. Your NFT collection can represent whatever you want it to. Combined with token gating, you can control what type of exclusive benefits your customers have access to. Additionally, by creating different tiers of NFTs, you can create different types of benefits for your customers and control who has access to what. 
  • Access to Collaborations – Collaborations in the digital world are important for brands to support each other and to promote each other to their followers. Especially with NFTs, your business can collaborate with various artists for an enhanced creative set of NFTs. Surprise your customers and your competitors with the one-of-a-kind NFT collection and you’ll stand out from the crowd easily. 
  • Extra Revenue Streams – Like any other big brand behind NFT collections, you might be known for selling physical products like cosmetics, clothing or even food. By launching a digital version of your products in the form of NFTs, you can promote your line of products whilst generating an additional revenue stream by selling NFTs. 
  • Chance to Expand Worldwide – Is your business based in the USA and has a limited geo-specific audience? Well, you can certainly attract new customers from around the world through NFTs given that they are based online and are therefore an international product. 

Knowing what the benefits of token gating are, let’s look at the industries which can profit from those.

Industries Which Can Profit From Token Gated Access

Businesses have the same idea in common of generating profits, creating values and offering people their services/products. Token gated access has many benefits for all sorts of businesses, so it’s best to look at the different industries which can currently mostly profit from it. 

Industries Which Can Profit From Token Gating
Five Industries Which Can Profit From Token Gating
Industries Which Can Profit From Token Gating (mobile version)
Five Industries Which Can Profit From Token Gating

The music industry is a very fortunate industry because of the fan circles it can easily create. A musician turned into a sensation through their star qualities is an obvious money-making asset to any music label. We’ve seen merch created around stars, tv-shows and documentaries, posters sold everywhere and with the digital world stepping in, music has never been as accessible to profit from than now.  

For this reason, introducing NFTs and token gating in the music industry is a clever choice. You could release exclusive music and albums to a selected number of NFT buyers, and even organize online or in-person token gated experiences with your stars and fans. People pay big money for concerts and merch, imagine what they would pay to meet their idols.  

Gaming is another thing that the NFT world and the internet have in common. Currently, in-game add-ons and downloadable content (DLC) are sold either through digital codes, in-game platforms or as separate disks. Some games struggle to introduce different clothing options for characters or side quests due to how much time it takes to design and release those. People then buy those, but online accounts can sometimes be easy to hack and steal from. 

To prevent that from happening for your gaming community, you can release gaming products through NFTs and have a secure way to verify the owners through the blockchain secure system. These NFTs can also be the key to a gated bunch of exclusive content specific to your business, which is another incentive for your fans to invest in your NFTs. 

The fashion industry is notably one of the biggest participants in the NFT and token gating worlds, with brands like Gucci, Louis Vuitton, Adidas and Nike having exclusive benefits for NFT holders. They can ship unique products to their token holders, host parties and fashion shows for them and for luxury brands, this is a great way to select their premium customers and give them the recognition they deserve.  

This industry could be tied-in with the media industry, which can offer exclusive content, be it written informative articles, videos or movies to token holders. Another connection can be made with the E-Commerce industry, which is known for releasing exclusive portals to token holders with unique content and products for their eyes only. 

Every industry can benefit from token gating and NFTs, and if your business is in an industry which doesn’t have any use cases for that, then this should ring a bell for potential opportunities. You can be the first business to innovate this model of community engagement and extra revenue streams, and you will secure your position within the top success-determined businesses in your industry. There are many use cases for the major industries, however, and they are a great example of what’s possible through token gating.

Use Cases of Businesses With Token Gating

Businesses can learn a lot from other businesses. History has shown great examples of what to do and what not to do, and every new business endeavor needs to be properly thought out before launching off. The following five examples show some of the best use cases of businesses succeeding through token gating, one way or another. They are from different industries, having achieved different accomplishments, but overall aiming for the same goal. To create a community, to earn money and to grow as a business.

Spotify

Spotify is one of the top music streaming giants in the whole world. With all the benefits we mentioned above for the music industry, it comes as no surprise that Spotify too would try to launch some sort of token gating platform within their streaming app. Since February 2023, the giant has launched token-gated pilot playlists in the US, UK, Germany, Denmark, Australia and New Zealand, for Android users only. The participants in this pilot project are Overlord, a multi-media Web3 entertainment company, and KINGSHIP, a music supergroup of Bored Аpe NFT holders.

The Overlord playlist is built with over 100 songs around the company’s internal theme of “invasion”. There is a mega-mutant lizard called Overlord, invading different planets, integrated within their story-driven gaming ecosystem, and the playlist is curated to accompany the idea of that character. The KINGSHIP playlist is curated with unique songs from the band and only accessible by purchasing one of their NFTs. The process of verification is quite simple, starting by selecting the playlist on the Spotify platform, then connecting the wallet with the specific NFT in it to the Spotify platform, and then receiving access to the playlist itself. 

This project is a great advertisement for Overlord, KINGSHIP and Spotify, as each can promote the new pilot idea to their communities and thus introduce each other to their followers. They have also generated a great interest in the project by giving people the chance to invest in their NFT collections and by encouraging them to uncover what lies behind those token gated playlists.

Doodles x Shopify

Shopify is another giant within their industry, and provides an all-in-one commerce platform for online, retail and on-the-go businesses, from the first steps to managing and running the business. Doodles is completely different than Shopify and is the collection with 10,000 NFTs representing hand-drawn doodles of mascots, aliens, cats and many other colorful designs by Scott Martin, a.k.a Burnt Toast. Thanks to Spotify’s point of sale (POS), DoodlePutt was able to provide token gated events in the form of mini golfing, merch sales and NFT prizes for Doodle NFT holders.

DoodlePutt was an event in December 2022, part of the Art Basel Miami Beach art fair. The DoodlePutt section was expecting a lot of visitors, both NFT holders and regular visitors. They needed seamless technology to verify and check-in NFT holders, to register and charge regular visitors for access, and to have point-of-sale technology for checkout at merch store. All of that was possible through the Shopify technology integrated within the immersive token gated event. This experience is a revolutionary way to host events for NFT holders without fearing long queues, slow payments and troubling verification methods on door.

Food Fighters Universe

The Food Fighters Universe collective identify themselves as the first Web3 restaurant group. Their mission is to save the restaurant industry by providing token holders with access to new dishes around the world, free monthly meals. The ultimate goal is to make NFT holders go out there and visit new places, try new food. The collection itself represents 10,000 NFTs of food fighters, in the form of different foods, with different facial expressions and weapons, like forks and chopsticks. 

The Food Fighters Universe is an exclusive dining club community, and their members get access to events, free monthly meals, food & music festivals, secret dining experiences, merch, NFT airdrops and more upcoming token gated perks. Talk about embracing the full potential of token gating for your business!

The whole project started as a 90-day pop-up in Long Beach, California. With over 1,500 people showing up on opening day, and it is becoming so popular, co-founder Andy Nguyen decided to turn the Bored & Hungry pop-up into a permanent restaurant. He thought the place could be the perfect meeting point for their Web3 followers to gather and connect, creating a real-life community. The idea expanded so much, that there is another location opening for Bored & Hungry Korea in the Seoul Gangnam District.  

The Food Fighters Universe has several other locations to add to their list. Snoop Dogg’s Dr. Bombay’s Sweet Exploration, an LA-based immersive retail dessert experience, and his son Cordell Broadus’ Bored Taco food truck, also in LA, the restaurant group is vastly creating a token gated restaurant culture.

Yves Saint Laurent

Yves Saint Laurent is a worldwide famous fashion and luxury brand. The French fashion luxury house, also known as YSL, released their YSL Beauty Web3 community, which has NFTs on offer, called the YSL Beauty Blocks. They also have their own YSL Beauty Wallet and token gated website to offer to their customers, creating a whole Yves Saint Laurent ecosystem of Web3 possibilities. But being such a fashion giant, the creators behind YSL NFTs have come up with multiple NFT token gated campaigns.

One of YSL’s NFT collections was designed with the purpose of fundraising for charity through NFTs in collaboration with P00LS, a web3 platform enabling brands and artists to create their own social tokens. The artists who worked together with YSL and P00LS are Kittens, DJ, producer and podcast host, and Agathe Mougin, DJ, model and designer. The raised funds went to two charities, It’s On Us and En Avant Toute(s), which was organized through YSL’s platform Abuse Is Not Love, a platform fighting against intimate partner violence.   

Another NFT collection that YSL successfully launched was the perfume-inspired The Night Blocks collection. The NFT collection was inspired by the YSL classic perfume Black Opium and featured it in the visuals of the NFTs. Coming in two rarity variants, the NFTs brought token holders many exclusive benefits. The lower tier NFTs brought their owners access to a private YSL NFT sale, gift voucher for their online store and exclusive behind the scenes content with Black Opium expert perfumer. The higher rank NFTs brought those benefits and additional new 90ml Black Opium Le Parfum, along with a curated makeup kit to recreate an iconic black opium look.

Lyrical Lemonade

Lyrical Lemonade is a multimedia company with experience in music videos creation, merchandising, beverage and live event production. Their logo represents the carton package of a lemonade, with their branding on it. To enter the Web3 world, they entered through a Web3 project called L3MON and a unique 500 NFT collection of various cartons, called The Carton.

The Carton NFT holders have access to branded merch, a Discord channel to connect to other NFT holders and 3-year access to the Summer Smash Festival, catered to the millennial culture. The Summer Smash Festival has been running since 2018, when it was focused on introducing lesser-known internet rappers. Fast forward to 2023, and the festival has gathered a lot of attendees, interest and experience to invite artists like Kid Cudi, Ice Spice, Future and Central Cee, which are better known than their previous lineups.  

The L3MON Web3 project by Lyrical Lemonade is still in its early stages, compared to more successful Web3 projects, but what they are doing through token gating is exactly what any business should do. They are catering interest around their brand and business and are forming communities through their NFT collection and experiences, enough to grow as a business and create more opportunities for the future.

Conclusion

The token gating technology is no longer just a concept, but a strategy that businesses use to their advantage. Whether it’s for fundraising, brand awareness or community building, token gating can be the solution for your business development at any time. This token gating guide aims to help you to understand how much of an empowering tool token gating is for any business. If you are ready to take your business for the ride to success and need to discuss opportunities and strategies, then don’t hesitate to contact DigitalArtists.  

With an experienced and knowledgeable NFT agency like DA, you can not only unlock the power of Web3 through NFTs for your business, but also start working on creating a loyal customer base and building a community. There are no complicated technologies for you to deal with, the experts behind DigitalArtists will answer all your questions and handle your project with utmost care. And through a fully integrated suite, you have full control over the entire process from beginning to end, which is fully transparent to ensure flawless collaboration between you and the DA agency.

Frequently Asked Questions

We want you to have full access to our knowledge on NFTs and their benefits for your business, so we won’t token gate the FAQ section. Read on to find out the answers to the most asked questions on the token gating topic.

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