Why TikTok Has Strong Potential With NFTs
Last week, TikTok took out a full New York Times ad to announce its upcoming NFT collection led by Lil' Nas X, Grimes, Gary Vaynerchuk, and more. The social network—which just crossed 1 billion monthly active users— will let fans "own the moments that broke the internet."
The diamonds in the rough. TikTok's entrance into NFTs makes sense. There's so much content created and consumed on its app, and fans remember the most memorable ones.
For instance, last week many folks celebrated the one-year anniversary posts of TikToker Nathan Apodaca's viral post of him vibing to Fleetwood Mac "Dreams" on his skateboard. If those creators can sell those NFTs and capture most of the proceeds (as TikTok has claimed), that's a win.
To be clear, most TikTok videos aren't good. Most will never go viral. But there's so much content created that TikTok has a high likelihood of creating moments that are perfect for NFTs.
The longevity of TikTok content. The most memorable TikToks aren't necessarily created by active creators. Some people may have just gotten lucky, then moved on to something else. Plus, the app is so focused on constant creation. TikTok's value prop isn't a single piece of content. Its value prop is an endless stream of entertaining content that holds your attention.
This may be a challenge for some creators. NFTs are often seen as an alternative asset class that can appreciate in value over time. That value prop is clear for a product like NBA Top Shot. If I buy a Ja Morant highlight, it's a bet on his career upside. But my NBA Top Shot opportunities are limited to the Memphis Grizzlies star and 449 other NBA players. The market is concentrated.
Meanwhile, TikTok NFTs is a much wilder marketplace. Folks like Lil' Nas X, Gary Vee, or Grimes have already crossed a proven and consistent threshold. It's more of a gamble for less-proven creators. But for better or worse, that uncertainty may yield the biggest upside opportunities.
Read more in TikTok's press release.
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