Etihad Airways has announced that it is launching its first NFT collection, dubbed EY-ZERO1.
This is an exciting innovation, the first of its kind in the aviation industry. These NFTs are a triple threat: they’re a prized collectible, they offer real-world utility, and they’ve been designed sustainably.
The NFTs will be available for minting on July 21, 2022 for the public, or July 18, 2022 for Etihad Guest members.
What Are NFTs?
A non-fungible token is a type of digital asset stored on a blockchain.
What sets an NFT apart from a currency is that every NFT is unique and identifiable. Money is fungible – it doesn’t matter if I have this bitcoin or that bitcoin, it’s all worth the same – but a non-fungible token derives its value from its distinctiveness.
Tokens, whether currency or distinct collectibles, have been around since the dawn of civilization, but forgeries have been a blight for just as long. Enter blockchain: a cryptographically-secure digital ledger. By being able to verify the origin, ownership, and transaction history of an NFT, blockchain technology is the innovation that backs the asset’s value.
2021 ushered in the era of NFTs, with much of the hype centred around pieces of digital art. These sensory experiences could still be forged for presentation; however, they cannot be forged for sale, as the blockchain guarantees the rightful owner of the true version. To a collector, much of the value of ownership is in knowing that you own the item for which you have a taste.
But NFTs can also be so much more than a digital version of going to a hobby shop. For example, they can grant material benefits to the owner, or they could be a digital representation of ownership of a physical asset.
Combined with the veracity of the blockchain, owners can easily prove their ownership, thus they’re assured that they’ll rightfully reap the benefits.
Etihad Airways Launches NFTs
Constituting the EY-ZERO1 NFT collection, there will be up to 2,003 tokens minted, to commemorate the year Etihad was founded.
The NFT models represent Etihad’s signature 787 Dreamliner fleet, with 10 different livery designs showcased as limited-edition collectibles. The models are 3D and interactive.
With these NFTs, Etihad is bringing their unique real-world designs into the digital world, with exclusive ownership in the metaverse. For any aviation geek with a desk littered with miniature model airplanes, this represents the next step in the future of collectibles.
The EY-ZERO1 collection is part of Etihad’s environmental sustainability efforts, aligned with their pledge to be carbon-neutral by 2050.
The NFTs are built on the Polygon (MATIC) protocol, a solution built on top of the Ethereum blockchain to help it operate in a more energy-efficient way. Also, all profits from the NFT collection will be used to buy sustainable aviation fuel, and the production of the NFTs has been a carbon-neutral project.
This is very refreshing to see, on two fronts. Aviation is by nature an environmentally taxing industry, and purposeful efforts are required to make it sustainable.
Likewise, the cryptographic algorithms that guarantee the non-fungibility of these tokens are also quite energy-intensive, and it’s paramount to pursue improvements if these technologies will ever have a path forward in our world. I’m very excited to see the two spaces colliding in an aligned, forward-thinking manner.
What Do You Get for Owning an Etihad Airways NFT?
EY-ZERO1 will be the first utility-driven NFT collection in the airline industry. That means that the owner of the NFT receives some material benefit, beyond just holding a prized collectible.
First and foremost, NFT owners are granted Etihad Guest Silver status. While the entry-level elite benefits won’t knock your socks off, you’ll get access to the Al Reem Lounge at Abu Dhabi International Airport and other airport lounges operated by Etihad, priority check-in, overweight baggage allowance, complimentary seat selection, and a 25% discount on in-flight Wi-Fi.
These benefits would be most useful for travellers who frequently make economy class connections through the Middle East, as many of the same perks are offered on a business class ticket anyway.
NFT holders who are part of the initial round of minting will be entered into a draw for free Etihad tickets. 10 winners will be awarded a free trip to Abu Dhabi from anywhere in the world where Etihad flies. The draw will occur on July 27, 2022.
Also, more prize giveaways are expected in the future for NFT holders, as well as things like early access to future NFT collections and other Web3 projects.
On the roadmap, there are more tangible benefits yet to come. NFT holders will unlock access to special Etihad events in Quarter 3 of 2022. Later in the year, keep an eye out for a club, only for NFT holders, with exclusive benefits – I’m imagining something parallel to elite status, but with a twist.
The Tokenization of Loyalty
Etihad’s first NFT collection is another step towards the widespread tokenization of loyalty programs.
While many have scoffed at the NFT gold rush as a fad, I’ve always been more intrigued by the real-world applications of NFTs, and I do believe that loyalty programs are a great use case.
At its core, blockchain technology is about trust – or more precisely, trustlessness. You don’t need to trust the counterparty on the other side of a transaction if the unbreakable cryptographic algorithms are your verifiable source of truth instead.
In a way, loyalty is also about trust, in the sense that it is really about mutual engagement. The loyalty programs that see the strongest engagement are the ones designed to be mutually beneficial. (On the other hand, poorly-designed programs suffer from weak engagement and low levels of trust.)
Trust is more easily broken than it is earned. Think of every time you’ve filed a missing points request on the Aeroplan eStore, or every time you’ve claimed missing Marriott Bonvoy elite qualifying nights, or every time your frequent flyer number failed to attach to your ticket for Star Alliance Gold lounge access. Those moments discourage customer participation, which ultimately hurts both parties.
However, tokenization on the blockchain helps reduce friction. It’s a verifiable system to ensure that you get your benefits, and to demonstrate that you are entitled to them.
We’ve already seen this in other industries, such as music, with some cutting-edge artists offering benefits like backstage passes and royalty shares to their NFT-holding fans. And fandom of an artist or creator is not entirely unlike being a member of a brand’s loyalty program.
I’m very interested to see what Etihad does on their roadmap, offering further utility to NFT holders. What’s more, Etihad has labelled EY-ZERO1 as its “first” NFT collection. It seems they’re opening the door for future NFT collections, perhaps each with their own unique bundle of benefits – all verifiable on the blockchain, of course.
How to Get an Etihad Airways NFT
The EY-ZERO1 collection goes on sale to the public on July 21, 2022 at 2pm UTC. Each NFT will cost US$349 plus local sales tax.
Etihad Guest members have access to an exclusive presale on July 18, 2022 at 7pm UTC. Here, you can mint an NFT for 49,900 Etihad Guest miles.
If you transferred American Express Membership Rewards to Etihad Guest to fund your NFT purchase, you’d need 66,534 MR points from Amex Canada, or 49,900 MR points from Amex US.
This works out to less than one cent per point in redemption value, although it would give you early access for a limited-edition product, which in your view may be a priceless advantage.
Also, I must say it’s super cool that we can use frequent flyer miles to buy tokenized digital assets. Bring on more integration!
Finally, you can register your interest at etihad.com/zero1 to be entered into a draw for 20 free NFTs.
Etihad Airways is launching EY-ZERO1, the airline industry’s first utility-driven NFT collection. Get your unique tokens on July 21, or on July 18 if you’re an Etihad Guest member.
You can learn more about the collectible models, benefits of ownership, and sustainability efforts on the Etihad website and on Arcube, the company that has partnered with Etihad to develop this project.