Introduction to NFT Gating

Welcome to the world of NFT gating! As you may already know, NFTs (non-fungible tokens) are unique digital assets that can be bought, sold, and collected online. But what sets them apart from other digital assets on the blockchain is their utility or benefits – the real world value they offer to their holders.

This guide describes what NFT gates are, what they may be useful for from a marketing perspective and how you can utilize them to increase customer retention, engagement and monetization. 

What is NFT Gating?

Let’s start with an analogy from the real world, shall we?! You and your friends would like to watch the latest Avatar film in the cinema, with lots of other people in the same theatre, a huge screen and a killer sound system, popcorn, etc. You meet outside of the theatre, purchase the tickets and walk into the main hall, not before you go through the person at the gate, who validates your tickets, right? An NFT gate can be compared to the person at the entrance, making sure you actually have the ticket in your hand before they let you in. 

While you are waiting for the film to start, you would like to pick up some popcorn and a drink. You approach the counter and the steward asks you for your loyalty card. This is the 11th time you’ve been to this cinema in the past year. You open your wallet, take out your loyalty card and display your previous 10 stamps to the steward. Because you are such an avid cinema visitor, they give you the popcorn and drink free of charge. You get a new card with a stamp on it. 

Analogous to the example above, an NFT loyalty program could provide you with an NFT badge for every purchase, and once you have 10 of them, you can go through an NFT gate to claim a free offer. We are going to see more and more of these use cases in the near future. 

NFT gating is a technique that allows a community manager, podcaster, influencer or brand manager to provide exclusive access to resources and experiences to members of various digital loyalty clubs by using non-fungible tokens (NFTs). It can be an effective way to increase engagement and monetization by offering incentives and rewards to members for demonstrating desired behaviours, such as ongoing attendance and a certain amount of spending per year. 

There are two main types of utilities that can be offered through NFT gating: physical and digital. Physical utilities include things like merchandise and in-real-life (IRL) events, while digital utilities can range from access to closed online channels and downloadables to metaverse swag such as avatars or in-game assets. 

Providing Exclusive Access To Online and offline Resources With NFT Gates

The specific utilities offered will depend on the community’s goals and the target audience, as well as the level of investment the community is willing to make in its strategy.

Some benefits are easy and inexpensive to offer, like one-on-one sessions with creators or voting rights on new tokens or the future of your community. Others, like merchandise or events, require a bigger investment. But the payoff can be worth it – holders feel like they’re getting something special in return for buying and holding on to your NFT.

How NFT Gating Works

“So how does it work?”, you ask. Well, the gating mechanism is based on a few phases:

  1. Someone defines an NFT gate around a resource. For example, you could have a Zoom meeting URL hidden behind a gate. This secret URL is not shared with anyone publicly – only the person who has defined the gate and the gating service know the secret Zoom meeting URL.
  2. During the gate definition phase, the person gating the resource defines the terms under which someone is allowed to access the resource. For example, only members of the CryptoKitties NFT collection can access the resource. 
  3. A gate URL is generated and shared with the public on social media. 
  4. People try to access the Zoom meeting via the gate URL. They are being asked to login with MetaMask or a similar Web3 Ethereum-compatible wallet. 
  5. After the login process, the NFT gate reads the list of NFTs owned by that wallet. Only the ones who own a CryptoKitties NFT are allowed to access the Zoom meeting. Others are asked to get the required NFT in order to access. 

Technically, this is a URL shortener on steroids. It shortens URLs and adds a layer of access control on top of it, thanks to the power of NFTs. 

In the example above, the Gate URL will be something like gate.badgetr.ee/123456 and the Zoom access URL hidden behind it will be zoom.us/meeting/somethinguniqe.

Benefits of NFT gating

Now that you have a better understanding of what NFT gating is and why it’s important, let’s dive in and explore the various ways you can use it to engage and monetize your community.

Who is NFT Gating For?

Community managers

communities can use gating and incentivization to control access to community activities and benefits, and to design incentives for members to exhibit desired behaviour and contribute to the community’s larger purpose. Gating refers to the process of deciding who gets access to different parts of the community, from initial joining to member-only experiences and privileges.

Influencers

NFT gating allows influencers to create unique, exclusive content or experiences for their fans by requiring them to hold a specific NFT in order to access the content. This creates value for the NFT holders and can help the influencer monetize their content. NFT gating can also be used by influencers to build and engage with their community by offering special perks or benefits to NFT holders.

Podcasters

NFT gating can be used by podcasters to offer exclusive content or experiences to their most dedicated listeners. For example, a podcast could release limited edition episodes or offer special Q&A sessions to holders of a specific NFT. This can create value for both the podcast and its listeners, as the NFTs can serve as a way for the podcast to show appreciation for its most loyal fans and for listeners to feel more connected to the content they enjoy.

Brands

Brands can benefit from NFT gating by creating exclusive rewards or experiences for NFT holders. These NFTs can be used to grant access to limited edition products, VIP events, or other special perks. Brands can also use NFT gating to create loyalty programs, where customers can earn NFTs by making purchases or engaging with the brand in other ways that give consumers a sense of exclusivity and prestige for being part of an exclusive VIP club.