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3 ways to supercharge your community with Web3
Part 2: How to leverage Web3 to fuel your community and vision
Last week, I explained What is Web3 and why you should care. This was Part 1 of a 2-part series with the purpose of sharing how you can fuel your community and vision with Web3.
In summary, I discussed why Web3 — which is creeping up on the horizon — is inevitable and how it aims to give power back to the users of the internet.
Web3’s decentralized community-driven approach is moving beyond the web. This ethos is already radically changing businesses’ relationship to their customers, and turning communities into secret weapons.
Because there’s nothing more community-centered than a coliving, I’ve been researching since late 2021 how to actually leverage Web3 to supercharge your community and business.
Today is your lucky day because I’m about to share 3 practical (and potential) use cases Karisma might use so you can as well.
NFT vs. Tokens for dummies
Before we jump in, I’d like to quickly clarify the difference between an NFT (Non Fungible Token) and a (fungible) token with examples from the physical world.
The Mona Lisa is non-fungible; it’s one-of-a-kind and can’t be replaced. Money (including crypto) or airline miles, on the other hand, are fungible. If Juan and Antonia both give me a $5 bill and I return to each the $5 bill that the other person gave me, would they care? Of course not. You can’t do that with artwork or real estate, which are items that NFTs can represent.
Use case #1: Crowdfunding & Co-Ownership
Let’s start with the easiest example. While Karisma’s first properties will be rented through a loan from FFF (Family, Friends and Fools), we’d eventually like to acquire our own spaces through NFT crowdfunding. You can crowdfund pretty much anything, not just real estate.
If the space (or the project of your choice) costs $200 (I wish), you could create 20 NFTs of $10 each that people could then purchase. If you were to buy 1 of these NFTs, you’d own 10% of the property.
Why would I do this with NFTs, instead of using Kickstarter or other proven ways of crowdfunding?
For 2 main reasons that you’ll see play out in the next use cases as well:
Remember in Part 1 how I talked about how users turning into owners? Well, when you buy 1 share of the property in form of an NFT, you’re owning an asset that belongs to you and only you. This is where blockchain technology comes in handy, verifying that you’re the owner of the thing you bought.
You can immediately resell the NFT whenever you’d like without having to do any paperwork or going through any daunting legal procedures. The transaction costs are minimal. This is pretty much impossible with Kickstarter.
But wait, there’s more!
The most exciting thing is the utility you can program into the NFT. Here are some examples:
The NFT can be the ticket that gives you access to the space. Only the owner can enter the property and no one else.
You can program the NFT so that those who crowdfunded the space, get a revenue share (aka royalties) from all future earnings, rewarding early adopters.
Only those holding the NFT will have voting rights over certain decisions that pertain to the actual space.
Are you seeing how this is a very powerful tool to involve and empower your community? Let me show you another NFT example.
Use case #2: Memberships & Segmentation
Karisma’s spaces will only be available to the selected members of the community. In the not so distant future, all memberships will be represented by an NFT that you can add to your phone wallet. Just like in the previous example, this membership NFT can grant you access to spaces worldwide and the online community.
What excites me most about these membership NFTs, however, is that you can very easily segment your community based on loyalty and target each segment accordingly. Let me show you what I mean.
Karisma may one day have 1000 active members each paying $150/month for their memberships, which give them access to the spaces, experiences and community. Juan may just join on special occasions whereas Antonia — a die hard fan — joins and contributes whenever she cans. Both are paying exactly the same and getting the same benefits, however.
What if you create an exclusive 50 NFT collection costing $10K each? Each NFT gives you free lifetime membership, priority access to all coliving spaces around the world, 20% off to all experiences, 1 coaching session per month and 1 dinner with the founder. (These numbers are totally made up)
Juan may not be interested. Antonia, on the other hand, may think it’s a steal. What if there’s 200 members like Antonia? Things can get pretty crazy. If Antonia manages to buy one of them and one day no longer wants it, she can resell it at a huge profit if the demand is still there.
It’s an asset, remember?
In terms of utility, Karisma can also program the NFT so that it receives 10% royalties for every sale. Imagine Antonia sells it for $15K after 2 years. She not only got a lot of value from it while owning it and even made a profit, but Karisma gets $1.5K from that transaction on top of the $500K from the primary sale.
Right there, you’ve built another source of income. Not bad, right?
Use case #3: Tokens & Gamification
Now that you understand how NFTs work, let’s move to tokens, which are more complex but extremely powerful.
Tokens are like Monopoly money or theme park tokens. They are only valuable because of the things you can do with them (buy a red hotel, use the roller coaster…). On top of that, you need to carefully decide how many of these tokens you’d like to issue/create… that’s the shit Jerome Powell (from The Federal Reserve) does for a living.
By attaching benefits to your tokens and gamifying the experience, you can incentivize certain behaviors within your community. For example, the longer you stay in our spaces, the more experiences you join or the more you contribute to the community by doing x, y or z, the more tokens you earn, just like you would with airline miles.
You can add value to your tokens by making them exchangeable against perks like:
Any utility you can think of…
With tokens, you have the possibility of creating your own internal economy. The tokens are only valuable if people perceive value in them. That is exactly why Monopoly can sometimes become so intense. If you manage to create enough demand around these tokens, eventually you can give them financial value by making them exchangeable against other cryptocurrencies. Money is a very powerful incentive.
I’m not sure about the token implementation within Karisma yet. What I’m sure about is that with the right incentives, you can get people to do pretty much anything and make your community run independently. This is the case with DAOs (Decentralized Autonomous Organizations), which are community-driven, Web3-native organizations, but that’s a conversation for another day.
How to supercharge your community
These are just some of the many use cases for NFTs and tokens. However, there’s one last thing I’ve saved for the end that will blow your mind, especially if you’re a community builder. Ready?
Remember the importance of ownership in Web3? NFTs and tokens are assets, which you can own.
That means that community members owning these assets now own a stake in the business or community they’re part of. We’re talking about an easily interchangeable asset that can increase or decrease in value.
In other words, if you own 1 NFT representing a share in one of the properties, you know that the more successful Karisma becomes, the more valuable your NFT will become. By having skin in the game, you’re involved in Karisma’s success and will very likely be incentivized to promote it, share Karisma’s stories and become an even more loyal member.
If Karisma succeeds, you succeed as well. We’re all on the same boat and the incentives are more aligned than ever. This totally changes the relationship that businesses and creators have with their audiences and customers.
Do you see what I’m seeing? This right here is an extremely powerful tool that can take your community to the next level.
These are some of the many use cases that have been brewing in my head for over half a year and I cannot wait for the day they finally get implemented.
Why haven’t I done it yet?
I think we’re still a tiny bit early and I’d rather wait on the sidelines for a little longer while learning from other people’s mistakes. More education and time are required until this gets fully adopted.
Web3 is coming soon; it’s inevitable. The question is when.
One of the milestones I’m really looking forward to is the moment people shift their attention from the stupid picture of an Ape or JPEG to the real utility behind each NFT or token. Instead of throwing fancy buzzwords that nobody understands, organizations should emphasize the true value that they’re providing.
If you’ve visited our brand new website, you’ll see how I’ve started hinting towards our move to Web3 while only focusing on the real utility and not mentioning any of these scammy-sounding buzzwords:
I really hope I’ve been able to provide some clarity around this complicated topic and get you interested in potentially becoming a member or co-owner. We may yet be small but just wait. Big things are coming.