What’s an NFT social club? NFTs are thought of by some as being little more than art-based crypto but there are many other applications for NFTs. Some are no more than digital art, it’s true. But NFT utility goes up to (and beyond) using the NFT as a form of identification used to access members-only functions, features, and perks.
If you buy a Pudgy Penguins or Mutant Ape NFT, you are buying more than the artwork, you may also be offered voting rights for the NFT project, access to in-real-life gatherings, special access to private Discord channels, and more.
All you have to do is to prove your membership via your NFT. In essence, depending on the NFT project, buying into one could make you a member of a social club.
When you buy an NFT, you own a token that represents the NFT artwork or other materials that are stored on the project’s blockchain. One example; Bored Apes Yacht Club is an NFT project on the Ethereum blockchain.
But there are plenty of other blockchains out there including Bitcoin, Cardano, Solana, and many more.
The artwork is said to be “tokenized”, which facilitates buying, selling, and trading NFTs without needing a third party unless one is preferred (such as an NFT marketplace). If you buy a Cool Cats NFT, for example, at press time purchasing them allows the owner to participate in the Cool Cats virtual world, Cooltopia.
Once you own a Cool Cats NFT you can use it to earn rewards in Cooltopia payable in the Cool Cats cryptocurrency, $MILK. You may be invited to exclusive Cool Cats events and you can spend $MILK in the Cool Cats marketplace.
NFT clubs are popular for a variety of reasons but one of the big draws for the organizers may be the ease of verifying identity–your NFT is stored on the blockchain, after all.
It’s much harder to present a fake ID or counterfeit NFT for entry into an NFT social club, and some in the space are already speculating that an NFT could replace traditional passwords above and beyond their utility on the blockchain or when taking advantage of an NFT social club’s perks.
The Cool Cats example is fairly basic, since most NFT projects worth the investment allow some form of community and encourage interactions between members. But there are also NFT social clubs that are designed to be closer to the spirit of a traditional, in-real-life social club complete with tiered membership, the ability to cast votes, and more.
One example is Friends With Benefits, which some sources describe as a Web 3 community for creators, makers, and advocates. This social club features a Discord channel as its main gathering place rather than a virtual world or metaverse.
In spite of that difference from NFT projects Like CryptoPunks, Friends With Benefits (FWB) is a Decentralized Autonomous Organization (DAO) and features tiers of FWB membership. You may, for example, be awarded the ability to have a vote when it comes to decision making within the DAO depending on which tier you buy into.
There are tiers of membership depending on how many FWB tokens you acquire. Holding as few as five FWB tokens earns you local event access. But owning 75 FWB tokens means you are recognized as a global member with full voting rights.
For this particular social club you will be vetted by existing members with a committee approval required for you to join.
The entire NFT phenomenon is still too young to have “legacy” best practices, features, or organization. There hasn’t been enough time to establish what kind of approaches make for a reliable club compared to a shady one.
And that may be one reason why “proposed” NFT social clubs are getting big headlines without having much to show for their efforts…at least at press time.
A proposed NFT project (social clubs included) has a lot to prove before a serious investor will consider laying out cash. Is this aspect of the cryptocurrency craze more subject to fraud than others? That may depend greatly on the project.
For example, an NFT social club open only to the holders of specified NFTs could make a fortune in pre-sales. Imagine being treated to a high-end gourmet sushi meal curated by the chef because you are part of an NFT social club.
This is what could happen with a project called Flyfish Club. This club announced its opening would be in 2023, but the presales of Flyfish NFTs sold out and they are now only available on the secondary market.
What would happen if the Flyfish NFT people simply took the money and walked away? That is the kind of danger you might expect from this sort of trend, and if you did your research on a project like this and didn’t like the pedigrees of the team involved you would be right to walk away from an “opportunity” like this.
But with Flyfish NFT in particular, the mind behind the project is a serial entrepreneur named Gary Vaynerchuk. Also known as Gary Vee, he is a well-known player in wines and digital marketing. The likelihood of this particular NFT social club being a scam? Research Gary Vee and it becomes clear this is a businessperson who has every reason NOT to rip off his buyers.
But if you do the same research on a different NFT social club and turn up far fewer results, do you want to take the risk? If you can’t learn anything meaningful about a project or its creators, there may be a good reason for that. One that means “stay away”.
Doing your own research is key. As with many other crypto projects, online reputations of the investors and developers is important but just as critical? Knowing the terms of service, the fine print, your rights, and responsibilities in the club. If a project is “under construction” or is in fundraising mode only, use caution.
It is a good idea to compare any option with others like it. What are the benefits of the club you are thinking of joining? Are they real benefits you will actually enjoy or do they seem better in a list of perks than they actually are when used?
Don’t invest in something you know little about and cannot learn more about. Avoid high-pressure sales situations and don’t be talked into investing money in a club or NFT you don’t feel right about.
The same way you would research a builder if you want to build a house from the ground up instead of buying someone else’s house? That’s how you should approach NFT social clubs, especially those selling memberships in a club not yet open for business.
Do the backers and developers of the club have any past experience doing so? If so, you may feel a bit safer about buying in than you would if the team is very new to the experience.
Expertise, experience, and context matter. If a team looks like it’s out of its depth that may be an indication to keep looking. If the team has a track record of other successful ventures relevant to the project, it may be worth investigating further.
Joe Wallace has covered real estate and financial topics, including crypto and NFTs since 1995. His work has appeared on Veteran.com, The Pentagon Channel, ABC and many print and online publications. Joe is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.