The current application of NFTs is setting the stage for universal adoption and the transformation of e-commerce protocols. Examples of collectible NFTs, like art, music, and games are only the beginning. eNFTs updated functionality goes far beyond digital goods. This potential could decentralize e-commerce in the future. The first section explains how eNFTs provide markets with a globally updating inventory on the blockchain, preventing double sales. The second section explains the streamlined affiliate marketing pipeline. eNFTs carry bounties that incentivize affiliates to list the eNFT on their personal market without the need to negotiate with the brand. Section three outlines fraud prevention; an eNFT is a certificate of authenticity and an embedded resale fee disincentivizes scalping. Fourth, its history and ratings remain attached throughout its lifetime in the system. Fifth, de-commerce reduces the power of centralized markets, empowers small brands, and bolsters underserved communities. Affiliates can choose from a wider selection of products and cater to their communities. The last section lists up-and-coming de-commerce dApps and quick details on each.
Setting the Stage for eNFTs
Art has been a great first use case for NFTs. The new collectible NFT industry has huge implications for art, music, games, and more. Jack Dorsey sold an NFT of his first tweet for 2.9 million dollars, Kings of Leon will be the first musical band to mint an NFT of their next album, and the first NFT trading card game, Gods Unchained, is picking up steam.
But the next big use case for NFTs is a huge upgrade of functionality and scope that will transform the e-commerce industry as a whole. It’s called the e-commerce NFT, or eNFT for short. This simple method for cataloging and storing inventory data comes with a long list of capabilities built-in. It also has the potential to introduce truly decentralized commerce to the world for the first time.
Globally Updating Blockchain Inventory System
Here are the basics of an eNFT: instead of an SKU number, each product will be assigned an eNFT. This token will store relevant sales data and product information. Any market that lists that product is referencing the same eNFT stored on the blockchain. When one market sells the eNFT, it is immediately removed from the other markets that are listing it. An eNFT cannot be sold twice. This solves the double-sale, or out-of-stock sale, problem in e-commerce. It also removes the need to communicate inventory status across multiple markets. Each market will always reflect the same amount of inventory.
Affiliate Marketing Overhaul
An exciting benefit of eNFTs is the complete overhaul of the affiliate marketing pipeline. Embedded in the eNFT will be an automated affiliate commission that negates the need for negotiations and eliminates counterparty risk. If an affiliate marketer wants to sell a publicly listed item, all they have to do is list the eNFT on their website. Nothing else. After a successful transaction, the escrowed funds are dispersed through a smart contract.
The affiliate gets paid when the brand gets paid. No more waiting until the end of the month. There’s no risk of unbeing fairly compensated because they don’t get paid per code entered or per click, they get paid upon sale, reducing risk to zero. No risk to the brand from click-through bots either. What was once a tricky and exhausting process will now be as simple as a click.
Fraud Prevention: Counterfeits and Scalping
Let’s say, for example, you buy a Gucci bag. It will come with an eNFT that verifies its authenticity. So the next time you sell that bag, you will be able to show the eNFT as indisputable proof that it’s real (and maybe you flash the eNFT at brunch as a novelty… but also as a subtle flex). And if you’re the one buying a used Gucci bag and it doesn’t come with a Gucci eNFT, then that’s not authentic Gucci. It’s a knock-off. Shop somewhere else. Sure, people will still make knockoffs for fun, but even the best imitations won’t have the impact they had before.
An eNFT can be embedded with an optional resale fee. Brands may set this fee very low so as not to deter purchases. Products may be equipped with a very high resale fee, products that are often scalped, like concert tickets or limited edition clothing items. The resale fee might sound like a concern to buyers who want to potentially resell their product at its full value, but having that fee will allow brands to set lower prices, to begin with, knowing royalties are on their way.
Reputation and History
Because the eNFT is always connected to the product, it carries with it any reviews and relevant history accumulated over time. This is beneficial for brands because reviews are often spread out over multiple markets. An item in 5 markets with 5 reviews per isn’t as impressive as an item with 25 reviews. Sellers can also buy with more confidence, knowing they are getting as much information as possible.
Used items will carry their full (recorded) history as well. A damage report might deter a purchase, but a signed item or item owned by a famous person might drive up the price.
E-Commerce and the Community
Decentralizing e-commerce will have a huge impact on small brands and underserved communities. Affiliates will be able to sell inventory from small businesses without worrying about overloading them. When they run out, they run out. When they restock the product, it reappears in the affiliate’s store right away. No pressure on the brand, and allows the affiliate to curate a wider selection of products they enjoy.
Nor do new brands need to worry about being kicked off huge platforms like Amazon and replaced by a knockoff. Because of the simplicity, their product will be listed across more markets by more affiliates. They may even avoid Amazon altogether.
The highly customizable selection of goods gives well-situated affiliates the power to market products that they know their communities need. They can also list local products and products from companies that have their best interests at heart.
Up and Coming De-Commerce Dapps
- Splyt: the only dapp that incorporates an eNFT inventory system. Comes equipped with the automated dispute and arbitration protocols, de-fi options, and consensus-based governance. Will be fully decentralized after launch.
- Origin: takes an extremely broad approach to NFT’s and attempts to capture all markets, from retail to the gig economy. Uses a third-party for dispute resolution, has de-fi options, and consensus governance. Mostly decentralized, but depends on a few centralized entities.
- Boson: instead of products, Boson tokenizes the future commitments to transact, using the stateful NFT vouchers. Fully decentralized.
Open Bazaar: allows transactions to occur directly in a peer-to-peer network without a middleman. Decentralized.