Written by Jonathan Ferland and Lisa Ferland (7-min read)
Big week last week! We launched our genesis report on “Web3Lit”, knowing that this space is still “really early” compared to other creative industries.
In that report, we highlighted several business models, technologies, and user engagement strategies that projects were using to set themselves apart in the space. If you haven’t read it yet, check it out here!
But Web3Lit moves fast, and literally the next day we found a project that touches on almost everything we were talking about.
That was too much to pass up on, so congrats, Bat Cowl Collection - you are our #DeepDiveofTheWeek!
And before we go on - we talked through this as well, “What can authors learn from a massive company in this space?”
We don’t want to focus on projects that aren’t relevant to the writer/reader communities we care about, so answering that question was important to us.
We know that what big companies do has a MASSIVE impact on ALL authors and readers.
Provide business model examples for authors to consider. In this case, DC has launched with a really robust series of benefits for their NFT holders. Almost all of these are benefits are readily accessible to most authors and builders. So even with big company budget and a massive pre-existing fan base, DC didn’t do too much that wouldn’t be available to a brand new, Web3-native project.
Attract new customers who will have their expectations set by these big companies. These big projects can easily attract a large number of people who have never entered into the Web3 space before. Now that they are, they might be interested in finding new Web3 projects (which is great!), but they will also have expectations on what type of utility they get from those projects. If they are expecting all the things that DC’s Bat Cowl collection gave them, but another project offers “just art”, it may become hard(er) to compete.
DC Comics worked with Palm NFT Studios to release a maximum of 200,000 "Bat Cowl" NFTs at $300 each. The NFTs were available to mint for approximately one week and were purchasable using credit cards only.
Those purchasing the NFTs would receive a "placeholder" NFT at the start (i.e., the packing box below) and would only see which actual mask they received one day after the public sale ended.
Having the NFT would provide significant utility. DC also highlighted areas for future planned developments in their public roadmap (we will detail both of these areas in the next section).
With 11 hours left during the Primary Sale, 190k of the 200k potential NFTs remained available to mint. At that point, approximately 5% of the NFTs were sold. (We don't know how many were ultimately sold by the deadline.)
As background, with a "traditional" NFT launch, a project would make 10k (or any number) NFTs available, and then they would remain open until the collection sells out.
At first glance, only minting ~5% of available NFTS might spell disaster for a big launch.
But we realized that at $300 each, 10k NFTs being sold is still pretty good ($3,000,000 worth of good, to be exact). Especially when estimates from a year ago were that DC Comics overall generated $300m in revenue per year, this "little" NFT drop was ~1% of total company revenue.
Also, while 10k NFTs seem small compared to the 200k available, it's comparable to the same amount of NFTs as "top tier" collections such as Bored Ape Yacht Club, Crypto Punks, Moonbirds, World of Women or Crypto Coven.
So if the revenue was on target, and the number of NFTs seemed right, why did DC make 200k NFTs available?
Unlike the NFT launches mentioned above, DC chose time scarcity over quantity scarcity.
They gave their hardcore fans one week to take action rather than deal with the frustration of a sold-out collection.
Now there was a limit to the number of NFTs, but it wasn't caused by a top-down decision by DC comics. Their scarcity is ORGANIC scarcity. Scarcity based on passion and innovation. Scarcity determined by their community. So web3….
Overall, this might only be interesting to "big projects," but the way they tackled this problem of generating scarcity without alienating core customers was really well thought out. It is a very different way of inviting an existing customer base into web3 while building organic scarcity. Impressive…
Most projects we look at will utilize crypto-native chains like Ethereum, Solana, Tezos, etc. Palm is less well known, but it is a layer 2 network built on Ethereum that promises sustainable, low fee transactions.
Using the Palm chain is definitely crypto...but the type of crypto that non-crypto people can easily get into.
People who have never set up a crypto wallet can still easily buy a Bat Cowl. You can look at it like "crypto with training wheels." Participating in the Bat Cowl NFT drop was likely many people's first step into Web3.
By only taking credit card payments (rather than crypto payments) and requiring email/password login rather than a crypto wallet connection, this transaction flow is a Web2 onramp into Web3.
This approach makes it SUPER easy for non-crypto experienced fans to participate in Web3 without too many extra, unfamiliar, and scary steps.
While we said Palm was like "crypto with training wheels," training wheels are HOW PEOPLE LEARN TO BIKE.
Providing easy-to-use cryptocurrency transactions is potentially how the "next billion people" can get into Web3.
(Note, there's no way for us to investigate this, but it would be interesting to know which percentage of Bat Cowl NFT holders were first-timers.)
One negative aspect of Palm is that it doesn't seem to be super connected to the rest of the crypto-universe yet. NFTs aren't listed on OpenSea, LooksRare, Rarible, objkt, or other more active NFT marketplace.
The NFTs aren't available for resale, and when they are, they will only be available for secondary sales on the DC/Palm NFT marketplace. Metamask wallet connectivity is on the roadmap, but not until 2022-2023.
This means that the overall activity in the space might not be as active or popular.
Their first priority is enabling accessibility and onboarding/educating non-crypto folks into the Web3 space in an easy to use and sustainable way.
That seems like a win and makes a ton of sense for the brand.
We found DCs utility to be most surprising.
While many other "big name" NFT launches rely very heavily on their brand recognition factor, DC has offered TONS of utility options that just kept coming.
DC has a full roadmap with updates scheduled to come in April, in May, and then stretching through 2023. With this project (and many in Web3), they are "building the plane as it's flying."
They decided it was better to move quickly and confidently than wait for everything to be perfect. This space moves too quickly for that.
It speaks volumes that a large company like DC is moving with the same agility as a young startup.
Kudos to DC.
Overall though, in addition to the actual NFT, holders will eventually get:
On top of these listed, they also hint at "new updates every 52 days" (weird calendar!) and "secrets and surprises along the way" that they "can't reveal now."
This is really interesting because of HOW MUCH utility they are providing. None of the utility features (outside of Snapchat filters) are groundbreaking or out of reach for most authors.
It's more that they just kept adding more and more features. That would have been fine if they just offered access to exclusive merchandise or early access to future DC NFT drops. By layering in every aspect and a well-thought-out roadmap, it raised the bar for other projects.
This is important because they promise what they WILL do, not what they can actually offer. With many Web3Lit projects, they feel that they need to have everything ready to go right from the beginning.
Obviously, the Batman universe is in a different situation than most authors/projects, and they can make a lot of choices due to their audience size that wouldn't make sense to typical projects.
That being said, there are several key takeaways that 1) make sense to do for all projects and 2) communities are beginning to expect from projects:
After looking at an NFT launch from a “Big, Established Company” company for a week, we want to look at some of the really amazing innovation happening within indie projects. One that has caught our eye is Tales of Elatora by Caroline (@littlefortunes) and we are super excited to dig into the details of this project next week.
If you have any thoughts on this analysis or have suggestions for future deep dives, say hi to Jon on Twitter @Jonny_Stockholm or give us permission to chat via email and get our future analyses of Web3 and literature in your inbox here.
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Lisa Ferland is a crowdfunding consultant, a children's book author, and is formerly known as an infectious disease epidemiologist. You can find her work at:
Jonathan Ferland works in an innovation hub and thinks about how emerging business models and technologies will affect legacy industries. He looks into Web3Lit in his spare time.