Unlock is a protocol for creating membership programs.
Unlock consists of several interdependent components:
- Unlock Labs: The core team that created and maintains the Unlock protocol.
- Unlock Protocol: The set of updatable smart contracts that create NFT memberships.
- Unlock Ecosystem: A community of creators, distributors, and consumers who share ownership of the Unlock protocol through their contributions using the protocol.
- Unlock DAO: A decentralized organization of token holders who manage and control the Unlock protocol.
- Unlock Tools: External user-friendly applications created by Unlock Labs to promote sustainable innovation on the Unlock Protocol.
Unlock Labs created Unlock Protocol.
Unlock Protocol belongs to the Unlock ecosystem, not Unlock Labs, and is managed by the Unlock DAO.
Key NFT membership use cases
- Event tickets give holders access to a specific location at a specific time for a specific event.
- Media memberships for the written word, music, videos, images, impressions and more.
- DAO memberships
- Certifications and credentials. In addition to “educational” type certificates, another type of credential is the Proof Of Attendance Protocol (POAP). POAPs are NFTs that are issued to people who attend events, virtual or in the real world. These NFTs restrict the transfer of tokens, and the NFTs can only be claimed during the event. Tokens prove that you attended the event and can be used to grant special memberships or benefits only to supporters who attended the event.
How work Unlock protocol
In the Unlock protocol, each creator deploys its own membership contract based on a common template. Unlock Labs has created a frontend application that provides an interface for this, but other platforms and applications can also implement their own versions of custom interfaces.
Membership contracts can be integrated into any application or platform, and the application can change its behavior depending on whether the user has a valid membership or not. If the user doesn't have a valid membership, the application can prompt the user to buy one.
Each membership created using the Unlock Protocol represents a non-fungible token. This NFT represents the relationship between the creator and the member for the duration of the membership.
PublicLock contracts mint and manage NFT membership keys. Keys for a single lock are only valid for the lock that created them.
PublicLock instances are ERC-721-compliant contracts.
Once created, each contract instance has its own address. As a result, the locks are unbound and fully functional even without access to the underlying Unlock contract.
Unlock Protocol supports three main functions: minting, gating, and earning.
Mint a membership NFT
Memberships can be created during the minting process in two ways:
- NFTs can be purchased by users once or renewed on a periodic basis.
- NFTs can be earned. The “manager” of a membership contract may transfer or grant memberships to users at his or her discretion. Once a membership is earned, users and managers can renew, cancel, terminate, or even “destroy” the membership.
Because these memberships are represented as NFTs, managers and members can define the metadata of the NFT itself. Public NFT metadata - for example, an image associated with a particular token or collection - can be updated by changing the artwork or visual representation associated with the NFT. Similarly, private NFT metadata (e.g., member information, Dapp data, or links to related assets) may also be updated after minting.
Unlock Rontracts include settings for transfer rights.
For example, the lock manager can disable transfer by making specific NFT memberships non-transferable. (These types of non-transferable NFTs are called “Soulbound tokens”).
NFT Gate: Member-only access to benefits, perks and resources
The core protocol includes features to quickly determine a user's membership status, whether their membership status is currently valid or expired. This allows applications to change behavior (e.g., close content or features) based on membership level or status.
In addition, the protocol implements hooks that allow these membership checks to be delegated to third-party contracts. This enables wallet-based membership check cases containing arbitrary ERC-721, ERC-1155, or ERC-20 tokens from third-party collections.
Earn: The unlock protocol is collectively owned by its participants
The underlying protocol is intended to be collectively owned and managed by its participants. Anyone who implements the protocol in their application can earn UDT governance tokens to join the Unlock DAO, or can choose to give these earned management tokens to members of their community as an additional reward.
UDT holders can submit and vote on protocol updates and treasury allocations.
In addition, the protocol includes a mechanism for lock managers to optionally charge a fee for purchases or payments made by community members. This fee collection mechanism is optional and must be approved by individual lock managers.
Time-based memberships
The Unlock Protocol is fundamentally different in that NFT unlock-based memberships have a time component. When a lock manager deploys a membership contract, it selects a “duration” for all memberships. This duration can be ten years or even a second. Membership expiration information is stored on the chain.
In the case of the creator, a time-limited membership allows for a constant two-way exchange of value between the creator and the fan as a member. In other use cases, time-limited Unlock provides regular membership renewals.
Unlock-based memberships can be renewed at any time before or after the expiration date. They can also be terminated early by either the Unlock Manager or the membership owner in cases where revocation is required or requested.
Subscription NFT and recurring revenue
Unlock smart contracts utilize the ability for users to pre-approve amounts to be spent in the future. This means that memberships can automatically renew multiple times within a set spending limit.
Recurrence turns a one-time membership into a “subscription” with recurring revenue.
Unlock contracts provide economic incentives to manage subscription renewals by third-party agents in the Unlock ecosystem, who are rewarded for the timely execution of these renewal transactions.
Participants can cancel automatic subscription renewals at any time.
