Real-World Benefits Of NFTs
Last updated
Last updated
The world of NFTs does not revolve only around art and collectibles. It spans across various categories, and each NFT undertakes a value based on a multitude of things.
NFTs can be created for purely artistic or collectable purposes, or they can be assigned a certain application when created, providing a tangible utility. Some widely implemented applications for NFTs today take the form of access such as memberships to private clubs/groups, voting power towards future developments of collections, early announcements for airdrops or for new artists’ releases, etc.
The NFTs market is what has made the concept of a futuristic metaverse boom over the course of the past few months. Nearly Every virtual world being created is now releasing most of its products (avatars, land, items, etc.) in the form of NFTs, mostly due to the proof of ownership feature and the versatility provided by smart contracts. This upcoming sector has also provided a new utility for many collections, driving up the adoption rate of NFTs altogether.
Aside from the aforementioned applications, NFTs have a great potential for a wide variety of sectors through their possible utilities. Some sectors in which NFTs could bring innovation to are real-estate and mortgage contracts, insurance coverages, luxury goods, event passes, and id cards.
Since 2021 the adoption rate of NFTs has skyrocketed thanks to the involvement of prominent public figures. Through them, various industries and major companies also noticed the steady sector improvement, the metaverse’s wide array of possibilities, and the innovative features of NFTs, and are quickly following suit.
A few examples of such industries and companies include:
Clothing industry companies, such as Adidas and Nike, have made their appearance in the metaverse by launching or acquiring NFT collections and buying land lots in virtual environments dedicated to exposing their digital merchandise in branded stores.
GameStop has launched its own marketplace. It partnered up with Immutable X and together gathered a fund of $100 Million in order to support the marketplace creation.
Walmart filed seven different applications for trademarks before the end of 2021. Most of the trademarks revolved around the creation of a proprietary token made to purchase Walmart goods in the metaverse, hinting at the imminent appearance in the market.
Microsoft recently acquired Activision Blizzard, the gaming company, for a staggering price of almost $70 Billion. One of the first comments made by the CEO of Microsoft was NFT related, as he stated that this deal would “provide building blocks for the metaverse”.
These market moves made by big companies to join the NFT and Metaverse environments are some of the overall pictures. Such widespread approval from big companies has been an important factor for the NFT industry. Their entrance into the market is currently laying the foundation for a possible widespread wave of innovation, across various industries. The presence of major companies might also reshape the way the NFT market is currently conceived. It will force some improvements in some areas, such as IP frauds and copyright infringements, and it will provide more stability to the industry overall due to the financial backing provided by the aforementioned companies.
Aside from the utility coming from big corporations’ investments, it is also worth looking at some of the most successful collections within each market category and checking out what utility they have provided through their NFTs to gain such traction in the first place. By looking at the broad spectrum of NFT categories it will be possible to cover the most known utilities and applications across the market.
1.DEFI
The Decentralized Finance sector merged with the NFT sector for utility purposes. The possibility of having a token with proof of ownership through the blockchain provided the DEFI sector with features that satisfied the requirements needed to issue collateralizable assets, loan guarantees, and even LP positions in the case of Uniswap V3.
The Fortune Teller collection is a perfect example of an NFT collection with sole utility purposes since each token is a warranty for a loan itself and their unique prices are tied to max loanable amounts.
Along with the Fortune Teller collection, the Uniswap V3 Positions collection is also composed exclusively of NFTs with a specific utility towards the owner. In the case of Uniswap Positions, each NFT represents the position an investor takes when providing liquidity to a liquidity pool on the Uniswap platform. This provides the secondary option of having a Non-Fungible token to represent the position instead of a Fungible one as seen in previous versions of Uniswap.
2.Metaverse
The Metaverse is a category that has incrementally been providing more and more utility options for NFTs as assets to each specific digital environment. The Sandbox Assets collection on the Ethereum blockchain has been one of the leading metaverse assets collections in regards to market cap and daily trading volume. The unique tokens available in this collection represent a wide variety of disposable items and assets for the digital environment of the Sandbox. The 3D models for sale range from avatars, to weapons, all the way to completely furnished properties.
Similarly, the Somnium Space VR collection has made a name for itself within the metaverse category with its NFTs representing items, such as land and avatars, to be used in the Somnium Space virtual reality world. The token’ type is for the majority land plot-related, which brought some of the NFTs of this collection to be the highest sales within the metaverse category. The NFTs representing land plot property have proved to be one of the highest-selling metaverse utilities.
3.Music & Sport
Over the past few months, both the Music and Sports industry dived into the NFT market and the resulting collections brought to light new utilities and applications. The most common one is collectibles tied to athletes or artists, along with a wide variety of smaller utilities and benefits tied to being an owner of a specific collection.
The example that represents both the music and the sport industries is the Autograph collection created by the American football player Tom Brady. The collection’s utility revolves around the involvement of famous figures across various fields (such as Sport, Music and Entertainment). To date it is seen as a collectables type of collection, but as it is stated by Autograph themselves, along with the value of a signed piece of digital memorabilia, other experiences related to the famous figures represented in the tokens will be added to the list of ownership’s benefits.
4.Collectibles & Passes
Gary Vee is an entrepreneur and famous internet figure. He was one of the most outspoken supporters of the NFT revolution from the beginning and launched an NFT collection called VeeFriends in May 2021. His role as an entrepreneurship advisor, life coach, and internet personality complemented perfectly the utilities assigned to the tokens of the VeeFriends collection. While the VeeFriends NFTs represent for the major part access to Gary’s community, depending on the rarity, they could represent tickets for conferences, access to one on one meetings, and unique possibilities tailored to the investors’ interest.
Besides that, Proof Collective is a good example to represent the NFT PASS. Proof Collective is a private group of 1000 dedicated NFT collectors and artists. They own a private Discord in which you can probably receive the alpha and some airdrops.
5.Utility
Although NFTs with utility has been the driver of this piece and their features have been looked at in many different market sectors, the notable mention within the category “Utility” would be the Slotie NFT collection. This collection was created to bring the Casino experience to the blockchain. An NFT carries not only access to the Casino network behind the collection but also benefits in over 150 Casinos worldwide. In this case, access to the Casino community is the main utility, but each NFT also provides different rewards possibilities within the Slotie supported platforms.
After looking at various examples of what certain utilities could be for upcoming NFTs and what utilities certain NFT already provide, it is clear that there is a steady strive towards improvement and a great interest from investors. The collections aforementioned were some of the first to find their own intriguing utilities to pair with the right market niche, and have managed to increase the base-value of their NFTs through meticulously planned fund management, properly executed market campaigns and well-thought out experiences and utilities to offer. The incoming wave of big brand recognition and investments in the NFT sector will increase the overall value of the market, increasing the competition for the existing collections, while simultaneously making it a richer industry. Possible utilities for NFTs and existing NFTs with set or dynamic utilities, will be two key topics to keep an eye on while this wave is taking place in order to make informed investments.
