Fintech

Shopify is betting on NFTs to unlock a new take on shopping

Shopify is letting merchants use NFTs for their customers to unlock special products, perks and experiences.

Shopify on a smartphone

The idea is that NFTs are a kind of loyalty card that a brand’s top fans can use to access exclusive items.

Photo: Shopify

Despite the crypto crash, Shopify is betting that NFTs will change the way people shop online and in person. The ecommerce giant has a new service to enable customers to use NFTs to unlock special perks, products and real-world experiences with merchants.

Last year Shopify added the ability for merchants to sell NFTs using Shopify so customers don’t have to go to another site to buy them. With this new product, Shopify is taking that a step further through what’s known as “token-gated commerce.” The NFTs can come from anywhere the merchants want.

The idea is that NFTs are a kind of loyalty card — in the form of a cryptographic key — that a brand’s top fans can use to access exclusive items.

The current crash in the crypto markets has hit NFTs as well. But Alex Danco, head of blockchain at Shopify, says he is excited about the current market because it removes distraction and is good for focusing on actual ways NFTs can be used to help merchants and decreases the interest in pure speculation.

As a result, merchants aren’t shying away from NFTs, Danco said. “If anything, it's the opposite, right? The fact that this is very clearly not about ‘double your money in the next week or whatever by NFTs.’ The fact that it's not that anymore is actually a great sign for real businesses and real brands.”

Some retailers are dubious, but Danco believes crypto wallets and NFTs will be a big benefit for merchants, once he persuades them to “wander into something that is so drowned out by noise of all of the speculative mania.”

The biggest benefit of crypto and NFTs is crypto wallets, he said. “Everybody sort of jokes about ‘This is a big bubble and it left behind no infrastructure.’ It left one very, very important piece of infrastructure: Everybody has a wallet now.”

The NFT can also be used in person. Shopify tried out the product with Doodles, a popular NFT project, at this year’s South by Southwest. Doodles NFT holders could buy exclusive merchandise or access a Doodles experience at the show. At the NFT.NYC conference this week, NFT project Cool Cats is using Shopify to offer access to special products for token holders.

One other use of NFTs is collaborations between brands, especially between Web3 and non-Web3 companies, Danco said. Superplastic, a toy company, partnered with Bored Ape Yacht Club to create toys for ape holders. Gucci also recently collaborated with Superplastic.

Danco sees this as akin to an old, famous band and a new, popular band playing a show together and sharing fans. NFTs enable that kind of experience, he argues. ”The funny thing is, it's very hard to authentically do these kinds of exclusive collabs online where people invite each other in. But what people are seeing as token gating is actually just perfect for this.”

He believes companies will move beyond simply using an NFT to buy a product, but that is the easiest way for companies to get started. Danco also sees app developers that build on Shopify adding many more uses for NFTs. “I have an inside view of what some of these app developers are doing in the pipeline, and it's gonna be nuts,” he said.

Fintech

What the fate of 9 small tokens means for the crypto industry

The SEC says nine tokens in the Coinbase insider trading case are securities, but they are similar to many other tokens that are already trading on exchanges.

While a number of pieces of crypto legislation have been introduced in Congress, the SEC’s moves in court could become precedent until any legislation is passed or broader executive actions are made.

Illustration: Christopher T. Fong/Protocol

When the SEC accused a former Coinbase employee of insider trading last month, it specifically named nine cryptocurrencies as securities, potentially opening the door to regulation for the rest of the industry.

If a judge agrees with the SEC’s argument, many other similar tokens could be deemed securities — and the companies that trade them could be forced to be regulated as securities exchanges. When Ripple was sued by the SEC last year, for example, Coinbase chose to suspend trading the token rather than risk drawing scrutiny from federal regulators. In this case, however, Coinbase says the nine tokens – seven of which trade on Coinbase — aren’t securities.

Keep Reading Show less
Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

Sponsored Content

They created Digital People. Now, they’ve made celebrities available as Digital Twins

Protocol talks to Soul Machines’ CEO about the power of AI in the metaverse


Keep Reading Show less
David Silverberg
David Silverberg is a Toronto-based freelance journalist, editor and writing coach. He writes for The Washington Post, BBC News, Business Insider, The Toronto Star, New Scientist, Fodor's, and several alumni magazines. He also writes for brands such as 23andme, Shopify and Bold Commerce. He has served as editor of B2B News Network, Canada's only B2B news magazine, and Digital Journal, a leading pioneer in citizen journalism. Find more about him at www.davidsilverberg.ca
Enterprise

Werner Vogels: Enterprises are more daring than you might think

The longtime chief technology officer talked with Protocol about the AWS customers that first flocked to serverless, how AI and ML are making life easier for developers and his “primitives, not frameworks” stance.

"We knew that if cloud would really be effective, development would change radically."

Photo: Amazon

When AWS unveiled Lambda in 2014, Werner Vogels thought the serverless compute service would be the domain of young, more tech-savvy businesses.

But it was enterprises that flocked to serverless first, Amazon’s longtime chief technology officer told Protocol in an interview last week.

Keep Reading Show less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Climate

Dark money is trying to kill the Inflation Reduction Act from the left

A new campaign is using social media to target voters in progressive districts to ask their representatives to vote against the Inflation Reduction Act. But it appears to be linked to GOP operatives.

United for Clean Power's campaign is a symptom of how quickly and easily social media allows interest groups to reach a targeted audience.

Photo: Anna Moneymaker/Getty Images

The social media feeds of progressive voters have been bombarded by a series of ads this past week telling them to urge their Democratic representatives to vote against the Inflation Reduction Act.

The ads aren’t from the Sunrise Movement or other progressive climate stalwarts, though. Instead, they’re being pushed by United for Clean Power, a murky dark money operation that appears to have connections with Republican operatives.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Entertainment

A game that lets you battle Arya Stark and LeBron James? OK!

Don’t know what to do this weekend? We’ve got you covered.

Image: Toho; Warner Bros. Games; Bloomberg

This week we’re jumping into an overnight, free-to-play brawler; one of the best Japanese dubs we’ve heard in a while; and a look inside a fringe subculture of anarchists.

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Latest Stories
Bulletins