📱👨👩👧👦💰 The "TikTok/Pinduoduo" of NFTs?
Note: This is not financial advice, and the views expressed in this blog do not represent the views of my firm Sfermion.
For those of you not familiar with TikTok or Pinduoduo:
TikTok is a short-form video-sharing social networking app. What makes TikTok so powerful is its algorithm. After a few hours on the app, it can tell what type of videos you like based on factors like watch time and engagement.
TikTok is worth $180 billion.
Pinduoduo is an interactive e-commerce platform. Pinduoduo is exciting because of its cheap prices, playful design, and social nature. This playful design encourages fun browsing instead of deliberately searching for products. It also includes the ability for users to purchase products as a “team.” If you can get everyone on the same team to purchase products, then everyone will receive a discount.
Pinduoduo is worth $114 billion.
What can we learn from TikTok and Pinduoduo, and how can we apply these learnings to building products for the NFT markets?
F1 Deltatime is an officially licensed Formula 1 blockchain-based game that utilizes Ethereum blockchain to bring you a full Formula 1 racing experience. Alongside a gaming evolution in a form of true digital ownership and a play-to-earn model, F1 Delta Time consists of two main components;
1. Collecting scarce digital items to fill your garage
2. Leveraging these items to go head-to-head in multiplayer racing.
Visit https://f1deltatime.com/ to participate in various events running throughout December.
TikTok of NFTs = The Personalization of NFTs
What would the TikTok of NFTs look like? The app would show you one single NFT at a time and measure your watch time and engagement. Engagement would include activities such as liking, commenting, sharing, and, of course, hitting the “buy” button. However, unlike a video-sharing app, the TikTok of NFTs would need to display asset properties and a description, deviating from a purely visual medium. There is also another problem: NFTs are an incredibly diverse asset class, spanning across categories like:
Video game assets
This wide-ranging diversity is actually no problem for an algorithmic app that can learn from user behavior. If you are a huge fan of collectible-related NFTs, the algorithm should learn and adapt to show you more collectibles. If you love art NFTs, then the algorithm should learn and adapt to show you more art. These vastly different categories would be narrowed down to focus on whatever type of assets you are most engaged with.
As mentioned, I think one of the main challenges with an NFT TikTok is how to best display the NFT’s background information alongside the visual NFT image. On OpenSea, for example, we can clearly see the properties of an asset.
This is a list of properties belonging to an Axie from the game Axie Infinity. These properties play a huge role in the Axie’s value and gameplay. But if a person were to only see an image of the Axie, they could not accurately determine how powerful it is. The key for an effective NFT TikTok would be to distill this information in an extremely concise manner so that people would only need a few seconds to determine whether to swipe on to the next asset or dive deeper into the details (and potentially purchase).
Pinduoduo of NFTs = Creating an NFT Social Experience
Pinduoduo is a completely different application from TikTok, but I think it has some powerful features that would be very applicable to NFTs. The single most powerful part of Pinduoduo is the “team buying” feature. Team buying allows users to form teams, and if everyone in your team buys a good, the whole team receives a discount on that good.
Team buying would be perfect for the NFT ecosystem. Users/players could connect with friends to form teams, and if everyone decides to buy an NFT, then a discount is provided. This would also help make NFTs more sticky because it connects a group of people and becomes a social activity. From an NFT project’s perspective, they just want more users to try out their platform/game and purchase their assets. Since it essentially costs nothing to produce this type of team discount for NFTs, it kills two birds with one stone: onboard multiple users at once to the platform/game while simultaneously increasing the number of token holders. By having more token holders, you incentive a wider group of people to use the product - and more users could mean the NFTs have greater value.
The teams could also be incentivized to take specific actions, like beta testing, taking surveys, or suggesting new product features to the platform/game developers. Their reward could be discounted NFTs, but would only be given if everyone completed the specific task.
These ideas are not directly related to Pinduoduo, but it would be great to rank teams against each other based on factors like number of tasks completed or number of NFTs owned. It would also be interesting if a platform, like OpenSea, offered users the ability to subscribe to specific teams’ activity feeds so you could constantly see what others are buying.
These types of team-based activities could encourage all types of healthy user behaviors and increase engagement. Team-based e-commerce on Pinduoduo has proven to be a massive success, as the company was founded in 2015 and is already valued at roughly $114 billion dollars.
If we combine the idea of a TikTok and Pinduoduo to create an NFT feed that shows users the exact types of NFTs they like, paired with the ability to form teams to purchase NFTs at a discount, then I think it could make for a very powerful app. Although there’s an argument that each product is unique enough to be kept separate, if a company can combine them in an elegant way, then I think that project would become a unicorn.