Thoughts on Introducing the Concept of Coupons into the NFT Field

1. The Essence of Coupons

Currently, major e-commerce platforms widely use coupons for two main purposes: first, to stimulate consumption and increase transaction volume; second, to encourage users to complete specific tasks through a reward mechanism, thereby improving daily active users, retention rates, and usage duration.

Coupons have three main advantages compared to direct cash distribution:

1. Limited Scope of Use: Coupons often come with various restrictions, such as specified platforms, categories, or minimum spending requirements, which makes them more effective in promoting the sales of specific products.

2. Low liquidity: Coupons are generally non-transferable, and due to the differences in consumer demand among users, their liquidity is much lower than that of currency, with value primarily reflected when purchasing goods.

3. Cost Delay: The cost of the coupon occurs when the user actually uses it, rather than when it is issued.

When introducing coupons in the NFT environment, it is also necessary to consider whether the NFT itself is a consumer good or an investment. As an investment, NFTs have a high liquidity, whereas coupons lack this characteristic; however, liquidity can be indirectly obtained after purchasing the NFT.

Coupons can be divided into two types: those issued by the platform and those issued by sellers. Coupons issued by the platform have no impact on sellers, as the discount portion is subsidized by the platform; coupons issued by sellers are borne by them.

2. Application of Coupons in the NFT Field

In the NFT space, coupons can be applied to two main stages:

1. NFT Issuance Stage (Mint Stage) At this stage, users interact directly with the NFT contract, paying on-chain currency to obtain NFTs. Project parties can promote the project or attract more users to participate in minting by issuing coupons. This method can reduce project income but will not incur additional expenses.

2. Trading Market Stage At this stage, NFT holders interact with the trading market contract, temporarily authorizing the market contract to transfer the NFT, while buyers acquire the NFT through the market contract. At this time, coupons can be issued by three parties:

• NFT project parties: A dedicated wallet needs to be established to pay the discount difference, which will incur additional expenses.
• NFT holders: Need the trading market to support the setting of coupon contract information, but currently there are relatively few professional NFT sellers, this method will not be discussed for now.
• NFT trading market: A dedicated wallet is required to pay the discount difference, which can cover all NFTs in the market, but will incur additional expenses.

In the trading market phase, whether it is the project party or the trading platform issuing coupons, there is a need for extra expenditure, so it is necessary to carefully weigh the costs and benefits.

The cost of issuing coupons by the project party during the trading phase is the total amount of coupons multiplied by the usage rate. The benefits include user activities that earn coupons by completing tasks and the increase in NFT liquidity.

The cost of issuing coupons by the trading platform is also the total amount of coupons multiplied by the usage rate, and the revenue includes the completion of tasks by users and the increase in the platform's trading volume. However, unlike traditional e-commerce, NFT trading platforms currently find it difficult to generate advertising revenue by increasing user traffic, as users usually make direct purchases rather than browsing.

3. Conclusion

In summary, during the minting phase of the NFT, it is a relatively appropriate strategy for the project team to issue coupons. This can serve as another promotional method aside from social platform lotteries and whitelists. In the trading market phase, the project team needs to carefully assess the costs and benefits of issuing coupons. For NFT holders and trading platforms, issuing coupons does not seem to be the best choice.

In the future, if this product concept is proven to be feasible, we will further explore how to implement coupon contracts and how to modify existing NFT contracts to support coupon functionality.