The market for non-fungible tokens (NFTs) may still feel niche, but analysts valued it at $3.6 billion in 2024, with forecasts predicting it will reach $22.8 billion by 2034. Brands are driving growth, not by speculation, but by experimenting with NFTs as gateways to real-world value—exclusive access, perks, and community engagement.
Meanwhile, traditional retailers face rising customer acquisition costs and diminishing returns from traditional promotions. Token-gated commerce offers an alternative. By using NFTs as verifiable digital credentials, retailers unlock all-access passes for limited drops, VIP events, loyalty benefits, and brand collaborations in ways that feel more personal.
Ahead, you’ll learn how token gating works, its benefits and risks, and how retailers are already using it—so you can evaluate whether it makes sense for your brand.
What are non-fungible tokens?
A non-fungible token (NFT) is a unique digital identifier written to a blockchain that certifies ownership of an asset. Unlike fungible assets, like dollars or Bitcoin—where each unit is interchangeable—every NFT carries distinct data that makes it one of a kind.
What NFTs can represent
- Digital content like images, music, or collectibles
- Virtual items such as skins, avatars, or in-game assets
- Physical goods tied to digital proof, including sneakers, jewelry, or tickets
- Access rights, like token-gated communities, product drops, or loyalty perks
NFTs live on decentralized networks such as Ethereum, Polygon, and Solana, where each transfer is recorded and verified. This structure makes them useful not just for digital collectibles, but for authentication and commerce applications.
What is token-gated commerce?
Token-gated commerce uses NFTs as digital access keys. When a customer connects their crypto wallet to a store, a smart contract checks whether the required token is present.
If the token is verified, the storefront automatically unlocks the hidden items, prices or events. The process feels similar to joining an email list or applying a discount code. But, because ownership is proven on-chain, the brand never needs to store passwords or personal data.
Token gating versus traditional memberships
Token gating modernizes the traditional membership card by turning it into a verifiable digital credential. Retailers can use it to drive loyalty, exclusivity, and cross-brand collaborations.
Traditional memberships still work, but they lack the flexibility and portability that token gating brings to Web3 marketing strategies. Here are the main differences between these two concepts:
| Token-gated commerce | Traditional memberships | |
|---|---|---|
| How access is verified | Customer connects a wallet to the blockchain; smart contract checks for token | Username and password checked against a company database |
| Perk flexibility | Perks can change at any time via smart-contract updates | Perks are fixed |
| Resale value | Token can be sold or gifted, so memberships can gain value | Almost always non-transferable and has no resale market |
| Interoperability | One token can unlock benefits across partner brands and virtual worlds | Benefits usually work only inside the issuing brand’s ecosystem |
How token-gated commerce works on Shopify
With the help of Shopify’s token gating app partners, you can use NFTs to offer access to:
- Collections, products, and discounts in your online store
- Collaborative launches with partner brands
- Community engagement through Discord, in-person events, or retail activations
Customers can connect their cryptocurrency wallet to your Shopify store. Once your token-gating app verifies ownership of a specific NFT, the customer unlocks access to gated products or perks.
Supported cryptocurrency wallets include:
As with all blockchain transactions, the shopper is prompted to connect their crypto wallet and confirm every transaction before it’s processed.
Token gating benefits
While applications for blockchain technology continue to evolve, token gating has already proven to have numerous benefits for retailers.
Security
Because NFT ownership is verified through the blockchain, there’s no way to forge token ownership. Only token holders can access the NFT’s perks.
Cost-effectiveness
NFTs let creators and brands sell access or perks directly to customers, without relying on third parties like ticketing platforms or membership program vendors. By removing these extra layers, NFT creators keep more of the revenue instead of paying fees to intermediaries.
Marketing impact
Token gating can also serve as a word-of-mouth driver. “When done correctly, NFT projects can spread quickly with a strong concept,” says Ty Daniel Smith, CEO and cofounder of Web3 and crypto-marketing agency Coinbound.
Early data indicates meaningful results: brands using NFT- or token‑based loyalty programs report 28% higher repeat customer interactions and 12% lower acquisition costs versus traditional systems
Earlier experiments
Before mainstream retailers explored token gating, musical artists like Kings of Leon tested NFTs for album releases. Their 2021 drop generated more than $2 million in sales within the first week, offering perks like limited-edition vinyl and lifetime concert tickets.
Challenges and risks of token gating
Token-gated commerce creates new opportunities for retailers, but also introduces risks and compliance challenges that don’t exist with standard loyalty programs.
Phishing attacks
Attackers frequently imitate “Connect wallet” popups, or airdrop links to trick users into accepting malicious transactions. A 2023 longitudinal study of 823 promotion accounts on Twitter found that 36% of NFT giveaways were outright phishing or rug-pull scams.
Researchers also uncovered more than 8,000 fake NFT collections mimicking 654 popular projects, resulting in $59 million in losses and over 670,000 victims.
Retailers adopting token gating should educate customers on safe wallet practices and set clear expectations about how NFTs will be used.
Legal and tax considerations
Rules around NFTs differ by region, and merchants need to understand how sales, gifts, and promotions may be taxed or regulated before launching a program:
- EU and UK: Regulators treat primary NFT drops as “electronically supplied digital services,” meaning merchants must charge local VAT on every sale.
- United States: Access-only NFTs aren’t generally considered securities, but if they are marketed as an investment, the Securities and Exchange Commission (SEC) may treat them as an unregistered offering, and the issuer can be fined. If an NFT is given as a gift with no exchange of money or value, it is not taxable at issuance, but if it’s converted into a paid good or service later, taxes will apply.
💡Tip: Consult with a blockchain and securities attorney before launching your token-gated assets. Understanding you and your customers' tax obligations is part of doing good business.
Environmental footprint
There are lingering concerns about the environmental impact of blockchains. Certain ones consume vast amounts of electricity to validate transactions through their security models.
Some popular blockchains, like Ethereum, have worked to reduce their energy consumption. Since December 2022, Ethereum has reduced its energy consumption by 99.84% by changing its means of producing the cryptocurrency.
Layer-2 (L2) chains are secondary networks that batch many transactions off-chain, then settle a single proof on the main chain. Emerging L2 rollups like Base further compress on-chain data and lower per-transaction carbon costs.
Token gating use cases for retailers
Token-gated commerce is already showing practical applications across retail. Here are just a few ways that NFT creators are providing value for their NFT holders.
Limited-edition product drops
Scarcity has always powered product drops in retail. Token gating enforces it by restricting access to verified holders only.
Steve Aoki’s Dim Mak streetwear store ran an A0K1VERSE passport drop in December 2023. When holders connected their wallets, the Percs Hub app verified the NFT tier and released exclusive merchandise discounts not visible to the public.
Tokenized loyalty and membership programs
NFTs can also act as 24/7 membership cards, with which a shopper can never lose or misplace a discount code or login credentials. All they have to do is keep a single token in their wallet to automatically use their loyalty perks.
For example, Liquid Death upgraded their 200,000-member Country Club by issuing Novel Wallet Pass NFTs. Members who added the pass to Apple or Google Wallet gained access to limited-edition merch drops, celebrity AMA access, and VIP entry to live events like Lollapalooza and Rolling Loud.
Experiential marketing (IRL + URL)
Retailers also use token gating to bridge the online and offline world. The same wallet that proves ownership on your website can also give customers access to VIP check-ins at events, festivals, or store activations.
Fox’s animated series Krapopolis linked its Shopify store to Krap Chicken NFTs. Holders could vote on episode plot points online, then use the same wallet at live activations for perks like line skipping and exclusive merch. The blend of on-chain voting and in-person perks keeps fans engaged season-round.
Case studies and lessons learned
Now that you understand how token gating works, here are some real examples from major retailers and the lessons learned from their projects.
Adidas ALTS community
In 2024, Adidas evolved their 2021 Into the Metaverse collection into ALTS by adidas, a project introducing 20,066 new avatars. The brand integrated Tokenproof wallet authentication into the CONFIRMED app, giving ALTS-holders app-exclusive collabs and merch.
📚Lesson: Dynamic, upgradeable access tokens and seamless mobile gating can sustain multi-year community engagement. Educated audiences adapt easily when Web3 elements are integrated into existing DTC apps.
Nike .SWOOSH
Launched in beta late 2022, Nike’s .SWOOSH platform made its way into more than 330,000 registered wallets before dropping its first digital-sneaker, Our Force 1, in May 2023. Despite checkout delays, the drop cleared $1 million in volume within 48 hours.
📚Lesson: Hype drives sign-ups, but your tech needs to be ready, too. A high-profile brand can absorb technical issues, but stress-testing infrastructure and phasing release slots helps avoid frustration during high-demand releases.
Starbucks Odyssey (sunset)
Starbucks launched its NFT loyalty beta in December 2022. On March 15, 2024, Starbucks announced it would shutter Odyssey before leaving closed beta. Reports pointed to complexity—like dual reward currencies, gated quizzes, and a marketplace that confused users—as barriers to adoption.
📚Lesson: Even strong brands can fail if loyalty programs are overcomplicated. Keep token programs friction-free and simple so users can get real benefits from them.
Is token gating the future of retail?
NFTs have gained significant attention in recent years. Is token gating the future of retail? The answer is uncertain. What’s clear is that token gating gives retailers a way to reward fans with exclusive access to products, events, communities, and more.
Token gating’s security features, potential cost-savings and marketing impact make it a useful tool for businesses today—and an area to watch as ecommerce evolves.
Token gating FAQ
What does token gating mean?
Token gating is restricting access to a product, community, or website until a person verifies ownership of a specific NFT. Overall, token gating creates a verifiable way to offer exclusivity and benefits to holders.
How does token gating work?
Token gating runs on the blockchain. Essentially, someone purchases an NFT token that then allows them entry into an online community or access to certain products, collections, experiences, etc.
How do you create a token-gated community?
There are tools available that make creating a token-gated community a much easier process than acquiring direct access to the blockchain. Create a community that requires a specific NFT token to enter it by building token-gated experiences, products, content, and more that people will be really interested in accessing. NFTs are not cheap, so you need to make sure your community is worth it.
