Since the dawn of the internet era, eCommerce has flourished and become part of everyday business. The rise of online stores and service providers has had a significant influence on how we shop, consume entertainment, and work. In tandem, we have also witnessed massive social impact through technology, as many startups and not-for-profit organisations have changed how we work as a society and how we interact.
With the evolution of 5G, blockchain, cryptocurrencies, and Web3, new digital assets and technologies that can potentially change the funding and support ecosystems for communities and charity projects are also becoming a reality. With much talk and investment in the Metaverse and the development of Web3, the potential for non-fungible tokens, or NFTs in Southeast Asia to impact economic growth and the development of social-enhancing projects could be a game-changer.
The rise of NFTs in Southeast Asia
Blockchain and cryptocurrencies have slowly moved into the mainstream consciousness, with distributed ledgers becoming a staple in many sectors. Traditional funding and financing have already been disrupted by increased reliance on and adoption of decentralised finance (DeFi) and financial technology (FinTech) products. This shift away from the stranglehold of more conventional banking has also created opportunities for new methods of financing projects and trading currencies.
We take a closer look at NFT adoption in Southeast Asia
The non-fungible token (NFT) is one such product. An NFT is a digital asset, often a piece of artwork or music, that is verified on a blockchain ledger and purchased using a cryptocurrency. This blockchain registration ensures that the NFT is unique and, therefore, collectable. It is tradeable but is not considered a currency in the same way that crypto is.
Predictions for Southeast Asia indicate that NFT adoption will be close to 41%, with ASEAN currently having the highest global interest in technology. With such potential growth for this type of product on the horizon, it is only natural that opportunities for positive social usage abound.
Using NFTs for fundraising
It may seem slightly infeasible that a digital product like an NFT could create an impression in the physical world, but it is possible when it comes to raising funds. While accepting their use in the Metaverse is easy, visualising how they can be useful in the real world is slightly more challenging.
Traditionally, the generation of funding for startups or social projects occurs through government grants, incubator funds, or financing through venture capitalists (VCs) and angel investors. Economic and social entrepreneurs can both raise funds using this new aspect of blockchain technology, by minting and selling NFTs.
An example is when Andrew Wang, an NFT community builder, joined forces with artists and social entrepreneurs to create the RELI3F project for humanitarian aid to Ukraine. Within a minute of their auction of NFT artwork going live, the group had raised over $1 million USD.
Another recent adopter of the trend of raising funds through tokens is the anti-racism non-profit project NFT4Good. It raised $80,000 USD for the Asian American and Pacific Islander #HateIsAVirus campaign by selling Asian celebrity portraits on NFT trading cards.
With the possibility of direct funding, startups and social enterprises can access capital more democratically, without having to pitch to a traditional source of finance, such as VCs and angel investors. When compared to the return on investment, the cost of minting the NFTs becomes almost negligible, making them a more accessible source of financing.
Project development and networking opportunities
Using NFTs in social enterprise offers more than just quick funding. It also alleviates the burden of having a fully developed business model ready for pitching to investors while an idea is still works.
There is an opportunity to connect with like-minded thinkers and network with those interested in creating social change by targeting the right community of collectors, . Using technology also empowers the entrepreneur to gain access to the hive mind for project development. The buyer now owns a piece of the entrepreneur’s furniture and can help steer its direction as well as contribute to its growth and impact by purchasing the NFT..
As the use of non-fungible tokens grows in the business world, there is an chance that their prospects will expand in the social entrepreneurship sector as well. Those involved in the not-for-profit, environmental, social, and governance (ESG) or socially responsible investing (SRI) projects can use NFTs to raise funds and bring attention to the issues they strive to eradicate.
NFTs, blockchain, cryptocurrency, and Web3 are all popular business topics.. Entrepreneurs can have a real social impact through technology by using these innovations to focus on good causes, charities, and social issues. With the tremendous interest in NFTs in Southeast Asia already, it is only a matter of time before they become a mainstay in the operations of those startups working to solve issues and make the world a better place.