The History of Non-Fungible Tokens (NFTs) and Why Zappos Pays New Employees to Quit

The History of Non-Fungible Tokens (NFTs) and Why Zappos Pays New Employees to Quit

In October 2017, a Vancouver-based company called Axiom Zen launched CryptoKitties, a game that allowed users to collect and breed unique digital cats. While ERC20 tokens were commonly used on the Ethereum blockchain, they were not suitable for creating unique tokens. To address this, the ERC721 standard was invented. This new standard allowed for the creation of non-fungible tokens (NFTs) that could represent unique digital items.

The concept of NFTs and the desire for unique digital items was not new. The Rare Pepe Meme Directory, for example, had "experts" who certified the rareness of Pepe memes. This example highlighted the demand for digital items that were one-of-a-kind. Colored Coins, which were bitcoins that were part of the "Genesis transaction," can also be considered as early NFTs. They were unique and identifiable from regular bitcoin transactions.

As the popularity of trading rare Pepe memes on Ethereum grew, two creative technologists, John Watkinson and Matt Hall, decided to create their own NFT project with a twist. They realized they could generate unique characters on the Ethereum blockchain. These characters, known as Cryptopunks, were not ERC721 compliant as the standard had not yet been invented. However, they were also not entirely ERC20 due to their unique characteristics. Cryptopunks can be considered as an ERC721 and ERC20 hybrid.

The ERC721 standard, which stands for "Ethereum Request for Comment," was purpose-built to be the technical standard for NFTs on the Ethereum blockchain. Unlike ERC20 tokens, which track ownership and movements of a fungible token as a whole, ERC721 tracks ownership and movements of individual tokens. This allows the blockchain to recognize and validate the uniqueness of NFTs.

The first project to use the ERC721 standard was CryptoKitties, which gained significant attention and popularity. Axiom Zen then spun out a company called Dapper Labs, which secured $15 million in funding from top investors including a16z and Google Ventures. This success highlighted the true power and potential of NFTs.

While the history of NFTs showcases the rise of unique digital items, another intriguing concept comes from Zappos, an online shoe and clothing retailer. CEO Tony Hsieh and his colleagues have implemented a unique practice of paying new employees to quit. This practice, known as "The Offer," is presented to new employees after a week or so in their immersive experience.

"The Offer" is simple - if a new employee decides to quit, Zappos will pay them for the amount of time they have worked, along with a $1,000 bonus. This may seem counterintuitive, but Zappos believes that if an employee is willing to take the offer, they lack the commitment and sense of dedication that the company seeks. By offering this incentive, Zappos is able to identify individuals who may not be the right fit for the company and save resources in the long run.

This practice of paying employees to quit may seem unconventional, but it aligns with Zappos' belief that memorable companies are made up of memorable people. Zappos understands the importance of emotional engagement with customers, and they recognize that it is the people within the company who create these memorable experiences.

Incorporating these unique ideas and insights, here are three actionable pieces of advice:

1. Embrace the uniqueness of NFTs: The history of NFTs shows that people are drawn to unique digital items. Explore the potential of NFTs in your industry and consider how you can create and leverage one-of-a-kind digital assets to engage with your audience.

2. Foster a culture of commitment: Zappos' practice of paying employees to quit may not work for every company, but it highlights the importance of finding individuals who are committed and dedicated to your organization's mission. Focus on creating a culture that values commitment and find ways to identify individuals who align with your company's values early on.

3. Prioritize memorable experiences: Zappos' success is built on the belief that memorable companies are made up of memorable people. Invest in creating memorable experiences for your customers by hiring and nurturing employees who understand the importance of emotional engagement and go above and beyond to create exceptional experiences.

In conclusion, the history of NFTs showcases the demand for unique digital items and the potential of blockchain technology to enable their creation and ownership. The rise of projects like CryptoKitties and Cryptopunks highlights the true power of NFTs. Additionally, Zappos' practice of paying employees to quit emphasizes the importance of finding committed individuals who can contribute to creating memorable experiences for customers. By embracing the uniqueness of NFTs, fostering a culture of commitment, and prioritizing memorable experiences, businesses can tap into the potential of NFTs and create a lasting impact.