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What is a Web3 Community?

What is a Web3 Community?
Explore the exciting world of Web3 and NFT communities in our latest article and discover how they differ from Web2.

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What is community? Relationships, friendship, a shared mission, common values, respect, alignment, empathy.

These characteristics are key in cultivating a sense of brand identification and loyalty, which are absolutely essential in the growth and development of your brand. Think about someone that raves about Apple products, or, for example, is a super fan of a sports franchise.

Does Apple’s marketing department carefully selecting the perfect copy and product positioning in a TV ad really change whether a long-time champion of their products will pre-order this year's new iPhone?

Does dropping the price of tickets for tonight’s Yankees game in an email promotion really impact whether a dedicated, die-hard fan will attend?

Just think about it - when you build a strong brand relationship with a customer, you are able to move past the awfully-transactional sales and marketing strategies we are conventionally used to. This “a-ha” realization has become increasingly clear in recent years. We can even see the transition in real-time: corporate marketing departments are aggressively hiring for community-building roles, interacting much more frequently with customers on social media, and providing greater access and transparency to decision-making processes.

There’s a catch - NFT Community Building Isn't easy.

Building a web3 community isn’t easy, in fact, creating community relationships similar to that of a legacy brand is almost impossible. It takes years upon years to forge the level of trust, loyalty, and recognition that prolific and historied brands are able to leverage.

Why is that?

The reason it’s so difficult to replicate this sense of community in Web2 stems from the fundamental marketing principles and strategies common to most conventional companies.

We’re so used to looking at and treating our customers purely as consumers rather than as contributors and stakeholders. The goal for most, in creating community dynamics, is to maybe boost conversion among core customers or even generate a network effect of customer brand champions.

The problem is that this is highly transactional and extractive. In Web2, communities center around a product, with engagement focused on driving conversion towards that product. Web3 differs completely - community in the space takes the form of driving an organic network of members toward a common mission or goal.

Member contributions are absolutely essential to the success of a community, and members pay to participate in the form of their effort and time. So why is the brand or individual behind a community the only one reaping the benefits of community? Solving this problem requires a new perspective on what ‘community’ should mean and an understanding of how it impacts the traditional role of a consumer.

How do we involve community members in the brand? How can community member feedback directly inform business decisions? How do we reward early contributors?

Most importantly - why should members stick around, and continue to dedicate their time and effort to our community?

These are the key questions every community leader should ask themselves, and are naturally what most Web2 communities fail to consider.

Enter the next generation of community: Web3.

The dynamic we’re seeing with NFT collections is equally puzzling as it is compelling. Members are coughing up hundreds if not thousands of dollars on an NFT and spending hours upon hours contributing just to be part of a... community?

The reason behind all of this is that in Web3 people become stakeholders in a community, and naturally, its respective brand. This utility is brand new in the digital world, and ultimately is the reason for such unheard-of levels of brand dedication and participation from community members in Web3.

NFTs are game-changing in the sense that they rapidly accelerate the process of brand identification and they also provide a direct mechanism for sharing the benefits of community contribution. This is really important to understand so let’s dive in:

NFTs & Brand Identification

Just as a wallet acts as a perfect ledger of monetary transactions and balances, it can similarly visualize a record of social belonging, contribution, and standing through NFTs. Most importantly, this visualization is entirely public and immutable.

That means that, now, the definition of community membership is completely arbitrary. You are either a holder (member, contributor, etc.), or you aren’t. Community membership is also exclusive since it’s both limited at the top level by the original supply of the token, and also at the individual/micro level since membership is dependent on a current member selling their membership to you. This democratizes community dynamics since the barrier to entry for a community is equal for all. It’s no longer a matter of how long you’ve been involved, who you know or are friends with, or what your background is. Community membership and belonging simply come down to ownership.

In addition, since this display of belonging is publicly accessible, a wallet directly impacts how the world understands personal interests, values, and involvements. It’s intuitive to see how social psychology plays a heavy role here.

We as humans love to show off what we own and value. The clearest example of this is social media; think about the last time you posted on Instagram or Facebook - what was the messaging you wanted to convey to your friends and followers?

In an increasingly digital and public world, we’re so conscious about what we choose to display since these choices effectively summarize and determine how others understand us. That’s why NFTs are so powerful in developing brand identification. When a member purchases an NFT, they are making a conscious, ideological decision to publicly identify with that brand, which I’d argue is the most powerful tool in marketing.

NFT Utility & Shared Benefits

NFTs, being publicly viewable and non-fungible, naturally facilitate a contribution economy where members are individually incentivized to create value. Contribution, in terms of internal community activity and outward promotion, impacts both community and individual success.

This is most directly seen through the value of an NFT - the stronger the community dynamics, the more value one receives from being a member, and that is naturally reflected in the price of an NFT. That means that members who play the ‘long-game’ and bet on your brand early on stand the most to gain but also have to work to realize that gain.

This is just the tip of the iceberg, however. In a world where membership and community values are clearly defined, and publicly accessible - NFT brands are forced to compete in terms of benefits to the holder.

To put this in perspective, let’s think about how this would apply to two rival brands. Take Uber and Lyft for example.

Imagine that instead of offering a subscription for their respective premium memberships, Uber One and Lyft Pink, they offer an NFT. Let’s say Uber’s NFT utility is fairly static, but with Lyft’s NFT, you get an additional 10% each year off all your rides.

Would you pay a ton to get access to the benefits of the Lyft NFT? Duhhh.

Would you ever take another Uber ride again? Probably not.

Would contributing to the success of Lyft also benefit you…I would definitely say so.

When the value a member receives needs to be clearly articulated and publicly recorded, brands need to compete to offer the most value, consequently giving consumers significant leverage and exposure to the benefits of their participation.

Wrapping it up.

NFTs uniquely empower brands to build strong community dynamics. With Web3, individuals are empowered to contribute to and represent the communities they are a part of. This article just scratches the surface of the power Web3 has to positively impact how we interact and connect with others, and I’m so excited to see it all unfold as adoption grows in the coming years.

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