How digital collectibles create offline experiences
Nestled between the iconic Roosevelt Hotel and the Hollywood Walk of Fame, it’s a vibrant new Los Angeles venue that prides itself on exclusivity. Like other trendy social clubs, The Dancing Seahorse Club offers member benefits such as intimate concert experiences and exclusive access to the event space, which opened earlier this month. But instead of building its business on annual membership fees, the music-focused startup offers lifetime benefits to holders of its non-fungible tokens (NFTs).
“There are just hundreds of benefits of chain solutions that we feel bring this business into the Web3 world,” said Alex Nahai, CEO of Dancing Seahorse, who has worked across the music and entertainment space for several years before adopting blockchain technology. “Through our contacts and through what we are willing to invest to create the best possible fan experience, we are able to provide that.”
The brand offers two tiers of membership in the form of profile picture collections (PFP) with the namesake seahorse logo – 444 “legendary” NFTs that have a floor price of 88 ETH (approximately $111,860) on OpenSea as of press time and 8,888 “premium” NFTs are offered at 3 ETH (about $3,810) each.So far, holders have gained access to a live performance by rapper Polo G at the nightclub and VIP sessions at global shows with artists such as Bad Bunny, Jack Harlow and Post Malone.
Dancing Seahorse says its goal is to “change the music industry forever,” and it joins a growing number of NFT projects focused on utility NFTs, which connect real-world rewards and experiences to digital collectibles.
What are utility NFTs?
Although some people think of NFTs as either static JPEGs or expensive collectibles, many NFT creators have begun offering IRL benefits for collectors who own their NFTs. This method of incentivizing long-term ownership has helped stave off some of the uncertainty caused by a frosty crypto winter and a sharp decline in NFT trading.
NFTs that offer real-world benefits and experiences are called utility NFTs. While many are associated with colorful works of art or have collectibles that make them attractive to flippant investors, much of their value comes from a variety of practical uses. For example, some NFTs are used instead of event tickets to reduce instances of fraud or price gouging, while other NFTs provide holders with 1:1 digital and physical goods.
Many successful art-focused NFT projects, including Bored Ape Yacht Club and Doodles, have introduced benefits for holders, such as hosting exclusive parties or meetings. These types of events are often referred to as “token gated” and require proof of NFT ownership to participate.
To enforce token gating at events, users are often asked to connect their crypto wallets to verify ownership of a specific NFT and claim an invite. The event tickets can then be flown into a holder’s wallet, which was the approach series founder Gary Vaynerchuck took for its first VeeCon conference earlier this year. To attend the conference, attendees had to keep a VeeFriends NFT in their wallet and present an Airdropped VeeCon NFT ticket at the door.
No third parties, less ticket fraud
For Dancing Seahorse and other music-focused Web3 startups, NFTs can replace the need for physical tickets to enter events. Putting tickets on the blockchain reduces reliance on third-party ticketing platforms that often charge extra fees, and can help customers avoid the ticket scams that continue to litter the music space.
These pain points are what prompted ticketing platform Groovoo to launch NFT tickets last month. The service allows event hosts to sell tickets in the form of NFTs, which help them verify ticket ownership and keep track of all past transactions.
Arthur Sampaio, co-founder of Groovoo, told CoinDesk that blockchain technology offers built-in solutions to problems such as ticket fraud and theft.
“We’re focusing on how we can store tickets in a very secure way that can’t be tampered with,” he said. “More specifically, what kind of information can we store on the blockchain so that other institutions can trust us?”
“It’s a very inherent property of the blockchain,” he added.
Restaurant reservations and foodie fanfare
NFTs also help solve problems in the hospitality industry that can be frustrating for communities of self-proclaimed “foodies.”
While getting a reservation at some of New York City’s most popular restaurants has become a nearly impossible task over the years, one company is using NFTs to sell preferential booking options to NFT holders, along with other exclusive experiences.
Front of House, an NFT events company that serves up menu offerings to foodies, sells digital collectibles that offer 24-hour advance booking to high-end restaurants that would otherwise require months-long waits. Additional perks include members-only social events, menu previews and merchandise, among others.
Phil Toronto, co-founder of Front of House, told CoinDesk that using NFTs to offer reservations at high-end restaurants could help expand mainstream access to food culture and help curate communities of foodies with shared interests.
“We’re doing our best to kind of liven up the concept of ‘utility,'” Toronto said. “We are taking an active role in demonstrating what might be possible in the physical world and bridging that with the digital token world.”
On the Front of House site, users can purchase NFTs that offer privileged access to exclusive New York restaurants such as Dame, Emmett’s on Grove and Hanoi House. Other collectibles include Polygon-based Wildair’s Donut Club, which comes with special merch deals as well as collectibles by food photographer Evan Sung.
Another example is the Flyfish Club, a private dining experience in New York City created by Vaynerchuck’s VCR group. It is only open to holders of NFT, which at the time of publication has a floor price of 3.5 ETH (about $1,270) on OpenSea.
Token-gated experiences to empower the community
NFT projects that offer utility are often successful in building tight-knit communities. This shared sense of belonging and belonging among holders creates new opportunities for connection and encourages collaboration.
For Dancing Seahorse, hosting token-gated experiences gives music fans an opportunity to connect with each other and gain access to exclusive performances by their favorite artists.
“With Web3, people are finding that the experiences we offer also give people an opportunity to network,” Nahai said.
And while owning a coveted NFT may interest some short-term investors, Front of House believes that creating unique, shared experiences is the real selling point for many NFT holders.
“At the end of the day, this isn’t about making money. It’s about having a resource that gives you something you can actually do,” Toronto said.
