Explained: NFT social clubs and how they work

The world of NFTs is showing signs of decline with shrinking sales figures. The first quarter of 2022 saw USD 12.5 billion in NFT sales, this number dipped to USD 8.4 billion the next quarter and nosedived to USD 3.4 billion in Q3 of 2022.

It seems hard to believe, especially after the surreal hype that had driven prices of NFT artworks, and anything related to NFTs to ridiculous heights.

However, today, NFTs that were once valued at hundreds of thousands of dollars have cliff-dived in value. The NFT of Jack Dorsey's first tweet and Paul Logan's Azuki are good examples of this.

However, there is also a silver lining to this narrative. Suddenly, the industry is moving from the hype of NFTs to the utility of NFTs. Newer projects have a utility-driven threshold for success today. Experts always knew that only a small percentage of NFT projects would hold water in the long term, and we see that prophecy coming true today.

Among a handful of utility driven NFT projects that exist today, this article will discuss NFT social clubs, what they are, how they work, their advantages and some of the most popular NFT social clubs in the world today.

Have you ever seen Hollywood movies that show exclusive underground clubs that require a particular phrase for entry? That's pretty much how NFT social clubs work.

They're essentially a community of people with similar interests, and access to this community, their meetups and spaces are restricted to those holding a particular NFT. The NFT acts as the key to the club that can be bought, sold or exchanged.

NFT social clubs can have a variety of forms ranging from co-working spaces to restaurants to billiard tournaments, house parties, networking events, etc. Such clubs are almost the perfect use of NFTs: the non-fungible aspect ensures there are no duplicates, and no one can cheat their way into such events and spaces with "fake tickets".

Whether the event is online or offline, a simple QR code or wallet integration will suffice to get you into the gathering. You do not have to struggle with remembering login details or securing a physical access pass or badge. All it takes is a smartphone, and you are good to go. Not to mention, it also comes with the pride of being tech-first.

Following rules is convenient when they are imprinted via the smart contract of the NFT. For instance, if a member needs to be taken out of the community for whatever reason, you can have a clause of voting and get the necessary things done. You could also have trial memberships issued that can expire once the trial period is over, without the need for the physical revoking of badges.

Owners can sell, auction or trade their NFTs; it makes much more monetary sense to have an NFT-based membership that also works as a store of value. For the organisers and creators, NFT smart contracts can be made royalty-based so that the creators get a cut every time an NFT changes hands. And because these NFTs are a combination of utility and rarity, it makes them all the more valuable.

Among the known NFT clubs today, three stand out - Friends With Benefits, Maxwell Tribeca & Flyfish Club - let's learn a bit more about each of them.

This is one of the world's most popular NFT social clubs with a 3,000-strong membership base of web3 enthusiasts, including creators, ideators, builders and more. It holds online and offline meetups, both domestically and internationally, where the web3 fraternity convenes to shape the future of the nascent space.

Entry to local events is restricted to individuals with at least 5 FWB tokens, whereas global events require 75 FWB tokens. Friends With Benefits is an example of exclusivity driving the popularity of a club.

David Litwak came up with organising the best house parties in his 8,000 square feet luxurious house but restricting entry to only the Maxwell Tribeca NFT social club. The membership of this club costs USD 1,000 and renews monthly at USD 250, all driven by smart contracts. The organisers also get a 2.5 percent cut when an NFT is sold from one person to another.

Gary Vaynerchuk is one of the most outspoken NFT evangelists. His new, yet-to-open restaurant doubles up as an NFT social club (in addition to an excellent marketing strategy).

There will be two types of memberships available - one that gets you entry into the high-end Japanese restaurant and the other more exclusive one that gets you a table with your private chef. The price of the NFT was 2.5 ETH but rose to 3.5 ETH in no time.

The NFT bubble seems to have burst. Fortunately, the utility of NFT social clubs bring to the table will ensure they have long-term growth prospects. They are much more than a temporary fad – unlike their digital profile picture counterparts - and could find more use cases in the future.