Want to build a strong community around a product or brand? Wondering how to use NFTs to manage access to your community?
In this article, you’ll discover how NFTs and other tokens can help you develop and gate active, loyal, and engaged communities.
What Is Token-Gating?
People appreciate being able to gather with others who value the same things.
The easier you make it for people to get together and the more secure or exclusive you make that gathering, the more likely that group will congregate and unite to achieve your intended purpose, like brand evangelism.
Token-gating is the next evolution of gating a community, virtual experience, or physical experience. Whether the community is gathered online or in person, access beyond the gate is granted based on the number and/or type of tokens a person is holding in their connected crypto wallet.
Nearly any experience, membership, or content that can be gated behind a Web2 account, subscription, or key can be gated using a fungible or non-fungible token.
Today, most brands and businesses creating Web3 communities are building a central core space on Discord or Telegram, and then adding gated rooms for various parts of their team or for the community at large to access certain exclusive content.
As technology continues to evolve, we may see a time when these communities aren’t confined to a single platform. Instead, members will be able to engage with their communities through any platform that makes sense for them.
For example, while Discord will act as the central community hub, the developers or engineers will use GitHub and the PR or marketing people will use Notion. Every one of the community's NFT holders will be able to gain access any of these community portals as long as they possess the tokens.
Businesses that add gating functionality into the tokens they release will mobilize and empower the people who support them the most to build communities around the brand, spread its message, and build awareness, all without the direct involvement of the brand itself.
How Does Token-Gating Work?
Token-gating runs on the public blockchain. It works by using the access key of your digital wallet to read the data in your wallet. If you’re holding the right fungible or non-fungible token in your wallet, you’re granted access. If you aren’t holding the right token, access is denied.
Collab.Land makes this verification process seamless for communities on Discord or Telegram.
When you request to join a gated Discord or Telegram community, a Collab.Land-powered pop-up will prompt you to connect your wallet with read-only access. Read-only access doesn’t allow Collab.Land to see everything in your crypto wallet, it can only see whether the specific token or tokens required are in the wallet.
Collab.Land then reads the contents of your wallet and compares it to the criteria established by the project’s or community’s founder. Based on that comparison, Collab.Land will automatically grant access or restrict access to all or some parts of the community.
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#1: How Token-Gating Streamlines the Consumer Login Experience
The number of usernames and passwords the average human being is asked to create and remember for Web2-based accounts is staggering.
Using a single public blockchain address (i.e., a crypto wallet that works across multiple sites) is easier and more secure for you, the user.
As long as your wallet remains connected to the community or site, you won’t have to go through the login or verification process again. Instead, every time you visit that site, the read-only access you granted will check to see if you’re still holding the required number and type of tokens you need to access the content. Provided that the tokens are still there, your access will be granted.
There’s no username or password to remember and you don’t have to worry about logging in over and over again. All of that friction becomes a thing of the past.
#2: How Token-Gating Verifies Identities and Credentials
Right now, when it comes to communications online, we rely on others to be truthful about who they are and their level of experience or knowledge. This applies to being an early adopter of a specific community or holding a diploma from a specific institution. Résumés can be padded, certificates can be faked, and so on.
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When these and other types of credentials are tied to on-chain or off-chain tokens, transparency is built in and credentials are verifiable.
Every member of the community can trust that every other member is who they say they are.
Another side to this verification is the ability to confirm authenticity in a transaction. This is especially applicable in the purchase of luxury goods.
For example, today, before you purchase a designer bag or a limited edition collectible item, you look for a certificate of authenticity. In Web3, the next evolution of the internet, that certificate of authenticity can be released as an NFT.
Because the transaction involves an NFT, it’s added to the blockchain, which makes the origin and provenance of the goods transparent. It effectively removes the concerns about purchasing counterfeit or stolen goods for businesses, primary consumers, and secondhand purchasers.
#3: How Token-Gating Simplifies Community Management While Ensuring Equity
We’re all aware of trolls—the people who pop up in online communities with the sole purpose of disrupting the conversation or forward momentum of a project.
In many cases, tokens aren’t easily acquired. Typically, you need to either actively engage within a community to receive specific tokens or you need to purchase tokens. Either way, an investment on the part of the holder is required. Therefore, the chances of someone spending enough time or money to earn a set number of tokens before turning to trolling behavior are slim.
Should someone join a community and behave in a way that forces moderators to execute a ban, access to the community can be revoked without reclaiming that person’s token. This means the ousted party can still access the other utility and benefits tied to the token or they could choose to sell their token.
With this functionality in place, moderators can spend less time policing their communities and more time developing and carrying out the experiences they want their community to have.
Tips for Growing a Token-Gated Community
If you’re interested in building a token-gated community, there are a few things you can do to set yourself up for success.
Connect With Web3- or Crypto-Native Community Moderators or Administrators
The Web3 community, by and large, maintains an open and collaborative culture, which makes it much easier for new brands and businesses to jump in and start building their own communities. By aligning yourself with crypto-native administrators or moderators, you’ll have added guidance through the process of developing your community and building it out.
Look for Your Superfans
You’ll need more moderators to help you build and guide the culture within your community.
The best place to find such moderators is within your established group of superfans; the people who are already connected to and emotionally invested in growing your community.
Look for people who are already talking about your brand in Web2 and add them to the leadership team in your Web3 community.
Anjali Young is a Web3 pioneer and cofounder of Collab.Land, a tool that helps project founders token-gate experiences and build trusted relationships with their communities. She’s also the chief community officer of Abridged, a no-code tooling solution. Connect with Anjali on Twitter.
Other Notes From This Episode
- Connect with Michael Stelzner @Stelzner on Instagram and @Mike_Stelzner on Twitter.
- Watch the interview and other exclusive content on the Crypto Business YouTube channel.
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