Non-fungible tokens have become a huge topic in a very short space of time. The NFT space has courted much attention and money but as a technology built for a Web 3 world while we are still living in a Web 2 world, they have lacked the intrinsic value that would justify mass adoption. That is not meant to take away from the promise they possess. Token gating, a practice that allows NFT owners to derive additional befits from their ownership of tokens will help to spur forward the growth of NFTs. But whaty is tokjen gating.
We’ve held a few discussions on NFTs on this platform and there is much written and said about them in the wider world. Non Fungible Tokens are unique identifiers of ownership of assets, in this case, digital assets. We can liken NFTs to title deeds on land. No two pieces of land in the world are the same, even when they are right next to each other. Title deeds for land are non-fungible, one cannot be substituted for the other. A title deed for plot 445 certifies that I am the owner of plot 445 and I cannot use it to claim ownership of plot 444 or plot 446. NFTs are applying this same architecture to digital creations namely art and media.
Token gating allows the creators of NFT assets to offer additional benefits to the purchasers of NFTs. This can bring additional utility to owners, and more value for their money. For example, an NFT art collection creator can offer merchandise for verified owners of NFTs in their collection. The creator adds a protocol on their website or store that verifies ownership of NFTs in the collection before allowing access to the merchandise, hence the name token gating. To use our land example, a country club that is close to plot 445 may offer me free membership as an owner of a plot near the country club.
The practice has already found some popularity. The Stoner Cats collection of NFTs allows people who own at least one NFT in the collection access to the animated streaming show the Stoner Cats. A private community, Friends with benefits was built on a discord server and is open only to members who possess at least 75 Friends With Benefits ($FWB) tokens. Other examples go as far as offering music, event tickets, physical merchandise and more to owners of tokens. We are only scratching the surface with this and a lot more is sure to come. Projects including access to physical infrastructure such as gyms are in the works.
Shopify joins the party
Shopify one of the world’s leading eCommerce providers by any measure has joined the party to lend its credibility to the token gating practice. Shopify allows users to connect their wallets to the platform to verify ownership of tokens in a collection and then proceed to access merchandise and other offers made available through Shopify by the token creator. While NFT art has boomed around the world the results have been slower to show on the African continent. The value proposition of NFTs has been identified as one of the major reasons for this. Applying token gating to African NFTs will certainly sweeten the deal for buyers in the market.
Token gating will certainly do its bit to move the NFT conversation forward.