Nothing in this article constitutes or should be taken as financial advice and should be treated as for illustrative and educational purposes only. Always do your own research. 

In the weird and wonderful world of NFTs, where price dynamics are hard to explain and many are still wondering why they should even consider owning a JPEG, a big part of the answer is the community that said JPEG gives you access to. 

Remember when we talked about what would make someone pay so much for a JPEG back in April? Since then, I have remained just as fascinated, if not more, with the concept of communities in NFTs and how they are different from web2. 

 The concept of building a community around a brand is nothing new, but what is different in web3 is that the strength of your community is not only correlated to, but also drives the price of your community token (i.e., your NFT). Here are a few defining characteristics of web3 communities that I find interesting.

Membership tokens 

Most NFT projects are essentially like membership clubs. They are not hugely different to any other club that you might join, except the subscription fee is not annual but (in most cases) a one-off and tradeable, meaning you can sell your membership token if you no longer want to be part of the community (or simply want to cash out). Retaining members, therefore, becomes about creating ongoing value to entice the members to stay, most projects achieve this by creating real life events for their members, access to other NFT collections via discounted prices or early access, loyalty rewards and other perks as far as the team’s imagination can take it. 

Peer-to-peer engagement 

What is interesting in an NFT community, however, is that the peer-to-peer engagement between members becomes increasingly important. Because most projects use Discord (like a group instant messenger platform for web3 projects) as their main platform for community engagement, the interactions are more instantaneous and are not necessarily structured around content produced by the brand, meaning they are not reactions to a blog post or an Instagram post. In Discord, members of that NFT community basically come to simply ‘hang out’ and interact with each other as much as with the team. 

It has been fascinating to observe the rise of the Discord Community Moderator role, whose job is to make the members feel welcome, answer questions and generally keep up the good vibes. When projects are built around community, the role of a moderator becomes imperative to a project’s success. Moderators are the people that the members interact with the most. Often, they are a member’s first point of contact with the project, and as we all know – first impressions count! Many Discords run on a 24-hour schedule with moderators based in multiple time-zones to cater for global memberships.

Ownership  

This one is a fundamental difference between web2 and web3 communities. By owning an NFT associated with a particular project and becoming part of the community, I potentially stand to financially benefit from the strength of the community – strong community means higher perceived value for those outside the community, which drives the price of the NFT up. This means that, in theory, members have a vested interest in the ‘health’ of their community and hence are incentivised to be more engaged and to contribute. This is very different to paying a flat fee for a product or an annual subscription, where community engagement is separate from a product, or a service being offered. 

There is, of course, always a flipside… It is that ownership element (or the greed often associated with it) that is responsible for the artificial hype created around certain projects, overinflating the price of their NFTs. This artificial hype will only carry the price for so long, unless the founders and the community are serious about continuously building the brand value.   

Relationships 

This is one of those strange and intangible points that I can’t quite put my finger on but here it goes… I have found these communities to be incredible for networking and making friendships in the space. I don’t know if this is because the space is still small, or whether this is a product of these projects attracting like-minded people, but being in multiple NFT communities, has led me to meet some incredible people and have some very interesting and uplifting conversations over many virtual coffees. 

I sometimes wonder if we are all just the same kind of “crazy” who somehow managed to stumble upon each other, or whether these are some life-long connections being formed in a space that is nascent and exciting. I have connected with people on the other side of the world who I have learned from, and with people right on my geographical doorstep who hopefully have learned from me. I have been inspired and challenged by these people; I have talked to them about everything from mental health to fundraising. Needless to say, making travel plans for the upcoming NFT NYC conference at the end of June feels much like getting ready for summer camp. 

I couldn’t tell you whether NFTs are a passing fad or are here to stay, but what I can tell you is that the people I have met through them are very much real. 

 Have a question about NFTs? Tweet us @liyadashkina and @WeAreAllbright