Why Clubs Are Creating NFT Membership Passes
By
Hellfire Jack,
Aug 1, 2023
Say you are a member of a tennis club, but you just got injured doing your best (or worst) Nadal impression.
It would be nice if someone else could lease your membership for court access while you’re rehabbing wouldn’t it? Perhaps you could make some pocket money.
Heck, if you leased out your pass out enough times you might make back the cost of your membership.
Golly, if you had multiple membership passes and this was a popular club, you may actually have a passive income play.
Sounds cool, but why on earth would the club issuing the pass allow this?
Well historically they would never. But NFTs seem to be giving them a reason to change their mind.
By being a shared open ledger of data, the blockchain allows for more open financial transactions and tracking. Which then lets smart contracts exist.
NFTs can be designed to interact with these smart contracts, and the ways in which they can are just getting started.
Perhaps this tennis club knows they won’t get as much traffic on weekdays around noon, so they design NFT passes to incentivize their members to get those slots filled.
Members get to lease out their passes on certain periods, the tennis club gets to share a cut of whatever the leaser charges.
Not a bad way to get more financial throughput.
And if this club is clever in their design, they could receive a lot more.
Whether it’s a physical social club or a live trading club, NFT membership passes are here to stay. The example gives a taste as to why.
These passes are of limited supply and cryptographically tracked by the blockchain.
As mentioned, leveraging smart contracts with these passes can give members unique access to a physical or virtual club and its benefits. But that’s not all.
But, unlike most memberships, they are also re-sellable on a secondary market, such as Opensea.
With this, the pass issuer gets paid on the sale of initial passes but can also get a percentage cut of every secondary market transaction.
This is nice for members because they don’t have to commit as hard as subscriptions. Which is great, cause most of us are on recurring payment plans that we don’t even know exist. I imagine this must be how Nick Cannon feels paying child support.
Through creative design, clubs can generate passes optimized for their business needs and their members economic incentives.
This, has the power to transform members into both brand champions and investors.
Anything digital can be an NFT, and we’ve just scratched the surface on what truly is going to be done with these smart contracts. — Mark Cuban
Let’s take VCR Group’s Flyfish Club as an example: Flyfish Club aims to be a high tier seafood dining experience and social club. They also happen to be accessible only through NFT membership passes.
Their initial pass sale (3,000 passes for around 2.5 eth or 8k at the time– leading to $24 million before secondary sales) is actually funding the development of their first restaurant.
The passes have fluctuated heavily in value and are sitting at 3.6 ($6.2k) eth at the time of writing.
This is a higher ETH price than the initial purchase but a lower dollar value since the price of ether has dropped significantly from January, when the sale took place.
They also did around 8800k eth in secondary transactions at a 10% creator fee, which means they likely made another 2–4 million on these sales.
$26–28 million for an un-launched restaurant is a pretty sweet deal for them, especially since membership owners still have to pay for food once they attend.
Now Flyfish’s sizable raise was possible due to the celebrity reputation and marketing abilities of frontman, Gary Vaynerchuk in the NFT market.
It also doesn’t hurt that the NFT market was overly excited and speculative at the time of sale. Most launching a pass should not expect such earth shattering numbers.
The justification for the cost of the passes just to be able to eat there (while still paying full price) seems a bit of a stretch.
But, when we incorporate the concept of pass leasing, the price can be better digested (pun intended).
To get a table at a good club in NYC is expensive. Like, a couple grand expensive.
If Flyfish Club is able to set itself up to be a premium socialite location, then leasing a pass for access for even a couple hundred dollars to a grand every weekend, would actually be able to justify the initial cost.
Done correctly, Flyfish club can cultivate a launch in which the pass holders are not only going to be eager to attend, but will propagate its brand for them in a market efficient manner.
After all, that’s what financial incentives do.
Say you are a member of a tennis club, but you just got injured doing your best (or worst) Nadal impression.
It would be nice if someone else could lease your membership for court access while you’re rehabbing wouldn’t it? Perhaps you could make some pocket money.
Heck, if you leased out your pass out enough times you might make back the cost of your membership.
Golly, if you had multiple membership passes and this was a popular club, you may actually have a passive income play.
Sounds cool, but why on earth would the club issuing the pass allow this?
Well historically they would never. But NFTs seem to be giving them a reason to change their mind.
By being a shared open ledger of data, the blockchain allows for more open financial transactions and tracking. Which then lets smart contracts exist.
NFTs can be designed to interact with these smart contracts, and the ways in which they can are just getting started.
Perhaps this tennis club knows they won’t get as much traffic on weekdays around noon, so they design NFT passes to incentivize their members to get those slots filled.
Members get to lease out their passes on certain periods, the tennis club gets to share a cut of whatever the leaser charges.
Not a bad way to get more financial throughput.
And if this club is clever in their design, they could receive a lot more.
Whether it’s a physical social club or a live trading club, NFT membership passes are here to stay. The example gives a taste as to why.
These passes are of limited supply and cryptographically tracked by the blockchain.
As mentioned, leveraging smart contracts with these passes can give members unique access to a physical or virtual club and its benefits. But that’s not all.
But, unlike most memberships, they are also re-sellable on a secondary market, such as Opensea.
With this, the pass issuer gets paid on the sale of initial passes but can also get a percentage cut of every secondary market transaction.
This is nice for members because they don’t have to commit as hard as subscriptions. Which is great, cause most of us are on recurring payment plans that we don’t even know exist. I imagine this must be how Nick Cannon feels paying child support.
Through creative design, clubs can generate passes optimized for their business needs and their members economic incentives.
This, has the power to transform members into both brand champions and investors.
Anything digital can be an NFT, and we’ve just scratched the surface on what truly is going to be done with these smart contracts. — Mark Cuban
Let’s take VCR Group’s Flyfish Club as an example: Flyfish Club aims to be a high tier seafood dining experience and social club. They also happen to be accessible only through NFT membership passes.
Their initial pass sale (3,000 passes for around 2.5 eth or 8k at the time– leading to $24 million before secondary sales) is actually funding the development of their first restaurant.
The passes have fluctuated heavily in value and are sitting at 3.6 ($6.2k) eth at the time of writing.
This is a higher ETH price than the initial purchase but a lower dollar value since the price of ether has dropped significantly from January, when the sale took place.
They also did around 8800k eth in secondary transactions at a 10% creator fee, which means they likely made another 2–4 million on these sales.
$26–28 million for an un-launched restaurant is a pretty sweet deal for them, especially since membership owners still have to pay for food once they attend.
Now Flyfish’s sizable raise was possible due to the celebrity reputation and marketing abilities of frontman, Gary Vaynerchuk in the NFT market.
It also doesn’t hurt that the NFT market was overly excited and speculative at the time of sale. Most launching a pass should not expect such earth shattering numbers.
The justification for the cost of the passes just to be able to eat there (while still paying full price) seems a bit of a stretch.
But, when we incorporate the concept of pass leasing, the price can be better digested (pun intended).
To get a table at a good club in NYC is expensive. Like, a couple grand expensive.
If Flyfish Club is able to set itself up to be a premium socialite location, then leasing a pass for access for even a couple hundred dollars to a grand every weekend, would actually be able to justify the initial cost.
Done correctly, Flyfish club can cultivate a launch in which the pass holders are not only going to be eager to attend, but will propagate its brand for them in a market efficient manner.
After all, that’s what financial incentives do.