Tokengated Commerce and Crypto Wallets

Crypto wallets are the digital spaces that contain the different elements of a composable identity.

In plain English:

Your wallet might contain a variety of “things” that serve to identify who you are:

  • your Starbucks’ loyalty card,
  • a collectible you’re proud of,
  • an achievement you share, and
  • your work ID.

We’re going to compose the things in our Web3 wallets to reflect our personalities. And, brands that recognize this, will help their customers identify with them through innovative Web3 loyalty expressions that manifest in these wallets.

Many of the things in the list above can be stored in the wallets that exist today (like Apple Wallet).

But these wallets are “dumb” containers. They’re functional and not expressive.

What gets interesting about crypto wallets is two bits:

  1. What’s in Web3 wallets doesn’t need an intermediary to the technology that stores the “thing” you’re putting in the wallet. It’s not just about money, but if I complete a class on Swift UI Programming, and that course certificate is minted on-chain, my wallet can display it. What’s gained over an Apple Wallet like solution? Provenance. Proof that what’s in your wallet is yours. This may not matter for a collectible (one that you’re not trying to sell) but may matter for a credential.
  2. The other interesting thing is that Crypto Wallets are ‘smart-contract’ enabled, which is like having little apps in the wallet that enables capabilities on top of the composable item.

Connecting on-chain innovations to off-chain infrastructure

I’m going to share two articles on what’s driving the current interest in wallets, but before I do, I want you to consider one thing.

Let’s say Starbucks allows me to mint an NFT that represents my loyalty card, to store in a crypto wallet.

Do you think that even Starbucks will be able to tell customers what wallet and chain they need to download to access the NFT?

Or, will Starbucks need to find their community of users on the chains that these users have chosen for themselves with the wallets that their members are familiar with?

Do you think Starbucks wants to put every loyalty transaction on-chain, starting from scratch to build a new loyalty system based on a Web3 technology stack… or, do you think Starbucks will need to connect their existing loyalty Web2 systems into this new Web3 stack, to combine the best of on-chain and off-chain capabilities in order to deliver innovative solutions?

(Hint, it’s the second choice.)

Just to be clear, I’m using Starbucks as an example that we can all relate to, not because I have any inside information into what they’re doing. I only know that they’re exploring a “digital third place” based on public information they’ve shared.

Learn More

If you’re curious, and want to start from the User Experience to understand the benefits of Web3, Identity in Web3, and how wallets play a part, please read these two articles:

  1. Simon Taylor’s “Why is everyone doing a Web3 wallet?
  2. The Crypto Wallet, Unlocking Digital Identity

In last week’s Tokengated Commerce announcement, Shopify talked about C2C as an expansion of B2C. B2C is “business to consumer”, while C2C is “connect to consumer”.

The wallet is the container in which businesses will connect to their consumers, and that’s why, as Simon asks, “everyone is building a Web3 wallet”.

5 Things to Consider When Creating a Tokengated Commerce Strategy

There’s a ton of interesting experimentation going on in the tokengated commerce space. If you’re new to Web3, or skeptical of NFTs, it’s useful to consider Tokengated Commerce as simply an extension of e-commerce into Web3 technologies.

Even the language around this is developing. For the sake of this post, I’ll use NFT and token somewhat interchangeably.

What kinds of extensions?

Strategy extensions. Token (NFT) holders can be considered superfans, not just customers. If the token has utility, it encourages superfans to be participants in your community, rather than just buyers. This may change go-to-market strategies, product launches, and more.

Technology extensions. E-commerce sites will need to integrate with crypto wallets, blockchains, and have to deal with the complexities of gas fees and ESG.

Product extensions. Digital and physical products will need to be combined and brought to market in innovative ways, involving both new technologies and new community practices driven by new values. Agami is a great example.


On one hand I’d like to say, “it’s unclear why”… and yet, I don’t believe that. Though I do believe Tokengated Commerce has yet to have it’s “Uber moment” (I think of Uber as one of the first mobile-first apps — meaning apps that didn’t make sense on a fixed computer without geolocation information tied to an individual).

That said, there are a few trends that are important that make Tokengated Commerce important for retail to begin experimenting:

  1. Whatever happens with “the metaverse” is happening, and digital products (or digital-physical pairs) are part of any digital world that manifests.
  2. Company values are shifting from purely financial metric oriented to something else. Again we see this with Agami, but it’s more like a company can be successful “enough” financially AND have an impact beyond that success on their community and be considered very successful (or at least, I hope this is the trend).
  3. Community is becoming more important than customers. This is both a long term trend (my opinion) and the flip side of #2 above. An example is the shift from buying things to subscriptions. It’s easy to understand why companies shift from revenue per transaction to lifetime value of the customer when that happens. Companies are going to look more at the lifetime value of their NFT holders, and that’s not a technology shift but a cultural one.

5 Considerations for Creating Your Tokengated Commerce Strategy

1. Think multichain, not individual chain

This is a complicated topic, but not really. Take a note of many of the largest tokengated commerce launches and you’ll realize that almost all are caveated — announcing an NFT launch on a particular chain.

On Shopify, only BCware has launched on all supported Shopify chains (Ethereum, Polygon, Solana, and Flow). If you’re trying to reach your community, you need to reach them in the wallets, and with the tokens and technologies that they’re already using.

Also, in a rapidly evolving space like blockchain, sentiments shift quickly.

What if you built on Ethereum and gas prices spike making your solution unviable commercially?

What if you build your solution on a proof-of-work chain and ESG concerns put a hold on the project?

These are real concerns that can cause months of delays to projects that don’t have a multichain perspective from the start.

2. Consider NFT utility

Consider how to add NFT utility to community members. Community is such an important part of Tokengated Commerce that you must consider token utility right from the beginning of your experimentation even though token utility is more about your business process than the technology implementation.

Will you airdrop NFTs to existing customers?

Will you provide advanced releases to NFT holders? What about exclusive offerings?

How will digital-physical products get bundled and launched? What will they look like in your inventory system?

How will NFT minting get associated with the real-world product in your inventory, or shipping and logistics systems?

Making two parallel products and manually connecting them via a “spreadsheet” isn’t a viable solution.

These questions lead us to the following strategy point…

3. Take your business process out of your app

Developing all of this complex integration in your app simply isn’t something that should be done. It becomes difficult to manage and change over time (and by difficult we mean expensive and bad for your user experience).

For decades the team at BCware has been advising companies on how to best integrate the value-chain of systems that support an application, into individual customer experiences. While one-off integration, say for example, tying your app directly into Salesforce for customer information, or into Polygon for low-cost NFT minting, can be faster up-front, it makes your business process brittle and inflexible.

We’re working with one customer, and their initial launch is expected to work one way. However, they fully expect that as they expand their offering the underlying process will change. Whether it changes because of their target customer demands, or it changes because they learn something and evolve their process doesn’t matter. We all know things change, and the best way to adapt to change is to decouple the underlying process from the experience you’re delivering to your customers.

4. Create an abstraction layer between your developers and tokengated technology

Let’s say you write your NFT solution and connect to OpenSea. Then there’s a new NFT market integration required. What do you do? Write directly to the new marketplace APIs? And when there’s a third… do you rewrite the same functionality in your app a third time and connect to yet another marketplace?

It’s better to create an abstraction layer that lets your developers do something once, and allows you to plugin to any marketplace as the space evolves.

Same goes with blockchains. And custody services. And CRMs. And messaging platforms. (You probably get the point by now so I’ll stop.)

An abstraction layer also allows a central IT organization to manage what underlying capabilities get exposed to developers so that developers adhere to corporate standards (say around security or compliance). When developers code directly to external services APIs (or even internal ones, but the point is more obvious for external APIs), what the do is often “invisible” to IT teams responsible for protecting the organization and insuring that costs can be managed over time.

This isn’t a new idea, in my career this is exactly what large financial institutions did when they adopted to middleware. They created their own abstractions on top to help their developers do the best job possible, while protecting their orgs from vendor lock-in, technology obsolescence, while providing developer guardrails for compliance with organizational policies. It’s important to do this.

It also allows your developers to experiment and migrate experiments to real-world applications more seamlessly.

5. Remember that integration is what makes this real

Your Tokengated Commerce project is not an island. It’s part of your e-commerce strategy. This means that the integration you’ve done for your e-commerce platform is also going to be needed for Tokengated Commerce. You need to ask yourself:

How are you going to connect all these chains and web3 services to your existing infrastcture like your CRM or logistics systems?

How will you connect into your messaging infrastructure to allow your tokengated platform to leverage existing internal tools such as custom dashboards or logging systems?

Too many companies have had marketing-led Tokengated Commerce projects that can’t scale to the enterprise because they didn’t have an integration strategy built into their program. This is an easily avoidable trap with a technology like the BCware Platform.

About BCware

It should be obvious that the considerations above are among the critical capabilities that BCware are bringing to the Tokengated Commerce space.

As part of our NFT App partnership with Shopify we are working with companies with which this advice has been resonating. Analysts agree, and all-in, it’s a pretty exciting time.

Definitely reach out if you’re curious about how BCware can help accelerate your Tokengated Commerce project and future-proof your investments in early experiments.

To learn more:

Innovative NFT Use Cases: Legal

It’s interesting that considering the heavily restrictive bitlicense that NY State has in place or the ban on mining they’ve recently instituted that the NY Supreme Court is leading the way with an innovative NFT offering.

Though, I doubt this is the sort of NFT anyone wants to collect.

The short of it is that airdropping court documents to the thief’s digital wallet, even though the court doesn’t know the identity of the thief, satisfies the due process notice requirement.

Is this useful? It seems to be. Can this be done another way? I think the real answer to that is over my head, but consider that a wallet address is being treated differently than an email address. It’s obvious (to anyone who sends a newsletter at least) why an email address can’t be used in this way (hello spam folder). But it’s interesting that a wallet address is being treated differently.

My thoughts are going in many directions as I write this… the implications should CBDC’s take off and how courts could block addresses from participating in the monetary system.

But we’re here at BCware for one thing – the integration between Web2 and Web3 and enabling companies to solve innovative problems with Web3 while taking advantage of existing Web2 infrastructure.

My Jailhouse Experience

A while back, I worked with the Virginia Department of Corrections on a project. The process of moving inmates between jail and court came with a lot of paperwork. They’d literally put that paperwork in an envelope and pin or clip it to each inmate as they were moved around on their court dates.

Seems like a formula for a lot of mistakes, not to mention how demeaning it must have been for inmates. Regardless of how you feel about these inmates, demeaning them can’t be good for the safety of the corrections officers. But, social justice aside, it’s an inefficient system.

We were brought in to help with the business process automation and integration to ensure that inmates flowed smoothly, courts ran efficiently, and costly errors were minimized.

Modern Day Due Process

Back to the present. There’s a big gap between a court that can serve a wallet with notice, and inmates who literally have packets of information clipped to them as they move around a courthouse.

In both cases, there are a lot of back-end systems that contain information useful to these activities. And, while what the NY Supreme Court has done is truly ground-breaking, if it’s done in isolation without integration to all the back end systems on which modern legal activity is built, it really is only a proof-of-concept for what the future of enforcement in the metaverse might be.

Not to mention the other obvious thing… one can airdrop to a wallet address only if the chain is supported for minting the NFT. We’ve shown how multichain NFT support can be simply built right into any application as we’ve done with our BCware NFT app for Shopify. It’s important that this sort of thing is done transparently to the application, for a variety of reasons including lower cost of ownership, reduced impact of change, timeliness of support for a particular chain when notice needs to be served, and so on.

Read more about this innovative NFT use case on twitter.

Want to move past a proof-of-concept and deploy meaningful innovation on Web3? Drop us a note and let’s chat about your project.