Automakers take cautious approach to NFTs after Corvette failure

In June, Chevrolet was hoping to cash in on the cryptocurrency bonanza that saw a non-fungible token made with Steve Aoki and packaged with the last ever Lamborghini Aventador LP 780-4 Ultimae Coupe for $1.6 million. So he came up with his own car-themed NFT.

Chevy paired a digital image of a Corvette Z06 in a Blade Runner-style cityscape, with a real 2023 Vette custom painted to match the artwork. The Detroit automaker’s acid green duo received no offers, even after the sale was extended for a day. Trevor Thompkins, a Corvette spokesman, calls the effort “very educational.”

Chevy will eventually move back into digital assets, Thompkins said. For now, the fiasco remains a stark example of epic volatility in the NFT market.

On July 14, the average sale price of an Ethereum NFT had fallen to $391, down 84% from the May average of $2,436, according to data from Cryptoslam. According to Dune, sales volumes on the world’s largest NFT marketplace, OpenSea, have fallen by 75% since May.

Still, pumped brakes don’t mean the ride is over. Google any automaker’s name with the term “NFT,” and you’ll find yourself swimming in art. Porsche, Bentley, Rolls-Royce, BMW, Hyundai, Lotus and Nissan, among others, have announced plans.

Falling prices may cast doubts on the long-term usefulness of NFTs in businesses built on real, tangible assets, but the urge to mint cash, crypto or not, isn’t going away. Chevy’s neon cautionary tale shows automakers will have to do a lot more than churn out a few quick shots of a new artist and expect a bargain.

“You just have to think about the right ways to interact with your user base,” says Jonathan Victor, sales manager for NFT.Storage and head of NFTs at Protocol Labs, which builds internet tools.

“We’re undeniably in a crypto winter,” says Alex Micol, who founded online ad developer Scalers Agency and NFT-based community Divergents Key in 2021. stage ?”

Smart brands will use NFTs to build a community of fans and collectors, experts say. Acquiring a specific NFT should make sense.

“Automakers should focus on the value the user gets from their NFTs, not just a collectible,” says Micol. “Don’t just give a car to the highest bidder. Offer real value, like an invitation to an exclusive event or Formula 1 tickets. It should provide access to a community.

Small NFT keepsakes such as those given away at sporting events do this well. They’re called Proof of Attendance Protocols, or POAPs, and someone could use them to brag about having attended every Dallas Mavericks game, for example.

Limited editions and authenticators for merchandise (including cars) also apply. Fashion houses are already using NFTs as watermarks to secure luxury items such as bags and watches. And access to special events, VIP privileges, and other exclusive content accessible through NFT ownership generates a sense of camaraderie.

“It’s really about figuring out how can I, as a brand that knows what my consumers like, create the experience that will allow them to show that it’s part of who they are?” said Mr. Victor.

Mercedes-AMG’s Race Collection of NFT ticket stubs does just that for Formula 1 fans. The brand has created 2,500 numbered ticket stubs each for most races, with five races having 1,000 editions. rare in collaboration with different artists, for a total of 14,888 NFT. Fans signed up on the FTX platform for free to get a stub, which unlocked secure access to physical releases and prizes. The idea was to bring together the entire Mercedes F1 collection. The floor price was 0.04 SOL (about one penny) with average sales of $8,124 on Thursday.

Higher ambitions may need to be scaled back.

Porsche successfully sold its first full-scale NFT in August 2021 for around $90,000. (Ether tokens are now worth $60,000.) Then the automaker announced a full NFT program at its annual press conference in March.

“We intend to sell original Porsche NFTs on our platform,” said Lutz Meschke, deputy chairman of the Porsche board of directors at the time. “You can expect highly emotive Porsche quality products.”

Since then, the Porsche NFT site has been titled “launching soon”.

“There are currently no live NFT auctions or additional activities planned at Porsche,” a spokesperson said, adding that “as Meschke said, something is being created.”

Bentley, meanwhile, is approaching its 208-piece Genesis NFT drop in September with an open mind. This will be the brand’s first foray, which eventually plans to include other crypto applications such as games, blockchain operations and NFTs linked directly to each vehicle’s VIN, said Bentley spokesman Jeff Kuhlman. .

Updated: July 16, 2022, 04:00

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