Shopify and NFTs
A non-fungible token (NFT) is a unique digital identifier recorded on the blockchain that is used to demonstrate proof of ownership of digital or physical goods. NFTs can store publicly verifiable data related to ownership, transaction history, and provenance.
Blockchains are distributed databases or ledger systems, which are managed by multiple computers, or nodes, on a network. Transactions are stored in blocks of data, which are then confirmed by the entire network. These blocks of data are chained together to form a shared, trusted, and irreversible timeline of events.
Learn more about NFTs, and how you can use them for your commerce strategy.
Key characteristics of NFTs include the following:
|Unlike a US dollar, which is fungible because you could replace that dollar with another dollar with no issue, each NFT is a unique digital token that cannot be directly replaced with another digital token.
|NFTs are minted through smart contracts, or programs with a set of rules that are created and deployed to a blockchain. Smart contract rules are pre-determined and can be executed without the need for a centralized entity, which reduces the risk of human error or ill intent.
|After an NFT is minted on a blockchain, it generally cannot be altered unless explicitly allowed in the smart contract.
|All records are immutable on a blockchain, which means that the provenance of each NFT is recorded on a blockchain permanently.
|NFT and blockchain technology is generally new for many, including many of your customers. You should make sure to educate your customers about NFTs and set clear expectations regarding NFT purchases. Learn more about the NFT customer experience.
Creating an NFT is called
minting. During the minting process, an NFT is published to a blockchain through a smart contract, after which it is available to be interacted with by customers. NFTs can be minted, distributed, and verified across many blockchains, such as Ethereum, Polygon, Solana, Tezos, and Flow.
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Use cases for NFTs on your Shopify store
NFTs and blockchain technology are continually evolving, and the full impact and use cases are still being explored. Currently, NFTs are most popularly being used to demonstrate ownership of media such as digital art, but they have many other uses for both merchants and customers. You might consider using NFTs on your Shopify store in the following ways:
- Sell NFTs through your Shopify store.
- Offer free NFTs to reward your customers for purchases, engagement, and loyalty.
- Offer exclusive products, discounts, or early access to product launches based on ownership of certain NFTs through tokengated commerce.
- Increase potential audience through tokengated collaborations with other brands through your online stores, or in person events.
- Create customer segments based on NFT ownership for marketing acquisition and retention campaigns.
Learn more about building an NFT strategy for your Shopify store.
Distribute NFTs through Shopify Payments
Being an approved seller of NFTs enables first-party, primary sales of NFTs using Shopify Payments through your Shopify storefront, or the Storefront API. A primary sale is the first sale of the NFT, when the NFT is sold by you, and then minted and delivered directly into the customer's wallet.
With Shopify Payments enabled, your customers can pay for NFTs using payment methods such as credit cards, Shop Pay, and other accelerated checkout methods. If you're interested in applying for approval to sell NFTs, then you should review the risks and requirements associated with selling NFTs using Shopify Payments.
If you don’t plan to accept payments for NFTs on your Shopify store, then you can offer free NFTs to your customers instead.
NFT sales through Shopify Payments is currently supported in the following regions: Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy, Japan, Netherlands, Spain, Sweden, United Kingdom, and the United States.
Apply for approval to distribute NFTs
To apply for approval to sell NFTs through Shopify Payments, you can add one of Shopify’s NFT distribution app partners to your store. After you add an NFT distribution app partner, you’re prompted to answer some eligibility questions, and you'll receive a message in the app letting you know if you're approved.
Certain NFT types and distribution methods are not supported though Shopify Payments, including the following:
- NFT marketplaces and/or reselling NFTs for which you are not the creator or owner.
- NFTs that have secondary royalties, such as selling or gifting an NFT where the customer can earn royalties from secondary sales.
- NFTs that have staking rewards, such as selling or gifting an NFT where the customer can passively earn tokens.
- NFTs that are utilized and/or gamified in any way that violates the Shopify Payments Terms of Service.
Selling and minting NFTs
As an approved seller of NFTs through Shopify, you can enable first-party, primary sales of NFTs through Shopify Payments on your store. You can also add a cryptocurrency payment processor to your store to accept supported cryptocurrencies as payment for NFTs.
Selling and minting NFTs through your Shopify store is similar to selling any other product on Shopify. Since NFTs are digital goods, they can be made available to your customers almost immediately after purchase.
With the help of Shopify's NFT distribution app partners, you can define the smart contracts and the assets represented by your NFTs for the blockchain of your choice. You aren't required to own any cryptocurrency or to have a cryptocurrency wallet to sell NFTs through your Shopify store.
If you’re seeking help with building your blockchain strategy, then you can visit Shopify's Plus Services Partner page.
Offer free NFTs to your customers
While selling NFTs can be a new revenue source for your store, you can also gift NFTs to your customers for free. The following are examples of ways that you can use free NFTs as an incentive on your store:
- Reward customers for purchases and loyalty with an NFT based on their total purchase amount.
- Provide a certificate of authenticity or an NFT receipt included with a customer’s purchase.
- Provide access to tokengated benefits on your store to customers who engage with a marketing campaign for free NFTs.
- Offer free NFTs on a marketing sign up page to reach a new audience of customers who might not have previously engaged with your brand.
You can gift a free NFT to a customer by collecting their wallet address, and then minting and delivering an NFT through an NFT distribution app, or by directing a customer to a free NFT claim page.
Create a free NFT claim page
Using a claim page, you can distribute an NFT as a gift with purchase of other products, or with no purchase requirement. The free NFT can be communicated to your customers through email or other marketing channels. You can work with an NFT distribution app partner to create and design an NFT claim page for your store.
After a customer provides their cryptocurrency wallet information on the NFT claim page, the NFT is minted and delivered directly to their wallet through an NFT distribution or airdropping app partner. If the customer doesn’t have a cryptocurrency wallet, then they’re prompted to create a wallet from the NFT claim page before minting and delivery. Learn more about the NFT customer experience.
Tokengated commerce allows you to offer exclusive access to access to products, discounts, or collections on your store to customers who own a specific NFT. In addition, brands are using tokengating to form partnerships through collaborative products and collections based on NFTs distributed by other brands. These types of partnerships allow brands to grow their potential audience beyond their own typical customer bases.
With the help of Shopify's tokengating app partners, you can choose specific NFTs that can receive benefits such as:
- Exclusive access to collections, products, and discounts on your online store.
- Access to collaborative products and collections through partnerships with other stores.
- Access to community engagement channels, including Discord channels and communities, in-person events, airdrops, and retail store activations.
Tokengated commerce can be an integral part of your blockchain strategy, especially when it comes to community building, customer retention, and revenue growth. Shopify's app partners are continually building integrations that allow you to provide additional value to all of your NFT holders, across supported blockchains.
The tokengated commerce experience
NFTs are owned and stored in a customer's cryptocurrency wallet, and tokengating apps are used to validate that a potential customer owns any required NFTs. After the tokengating app confirms that the customer has the required NFTs, the customer can add the exclusive collection, product, or discount to their cart and complete their order.
To enable tokengated commerce for your store, contact Shopify's tokengating app partners.
Third-party NFT marketplaces
NFT marketplaces offer ways to mint and sell NFTs. These marketplaces are where your customers can go to buy or sell NFTs on the secondary market. However, there are fewer ways to have your business stand out within the marketplace, and you have limited control over your branding, analytics, or customer management.
Some common marketplaces where you can mint and sell NFTs are the following:
Sustainability and environmental concerns
Shopify seeks to be blockchain agnostic, meaning that Shopify works with you and app partners to develop integrations on any blockchain.
While NFTs represent a new way for you to do commerce, there are lingering concerns regarding the environmental impact that the underlying blockchain technologies might have. Some popular blockchains, such as Ethereum, have worked to reduce their energy consumption as blockchain technology evolves.
For questions about energy consumption and your NFTs, contact the blockchain app partner that you're working with.