Digital Marketing
3 minutes

How NFTs Are Moving from Digital Art to Real World Utility

Non-fungible Tokens (NFTs) are often considered to be overpriced JPEGs on the internet. Seen as a picture of a bored ape or some other digital art that can readily be copied, NFTs have been viewed with skepticism by most people. OpenSea, the biggest NFT platform in the world, has over 80 million NFTs listed on its platform. It also has over 1.2 million users and averages 50,000 transactions per day.

In 2020, the global total trading volume of NFTs was about $200 million, according to 101 Blockchains. By the first quarter of 2022, it had grown to over $13 billion. To sustain this huge investment, it is clear that NFTs have to move away from being mere digital art to becoming some reserve of value and offering real-world benefits.

That’s where utility NFTs step in.

An NFT is a token that exists on the blockchain and is used to represent a unique asset. Because it is on a blockchain, verifying authenticity and ownership is possible. In simpler terms, NFTs allow us to tokenize anything, especially valuable items. They provide “digital bragging rights,” as often described, and are valued almost as highly as the items they represent.

Utility NFTs are NFTs that offer real-world applications beyond being mere digital tokens. They provide tangible privileges to their owners in the real world. These privileges can come in many forms, including exclusive rights, claimable rewards, and access to certain events and spaces.

Some industries have adopted utility NFTs more readily than others. Industries with clear cases of utility NFT include:

1.Gaming

Utility NFTs have a high penetration and adoption rate in the gaming industry. Utility NFTs in gaming can represent in-game assets. As gamers progress in games and win in-game collectibles, they can claim them as NFTs. These gaming NFTs can then be swapped for valuable items or money (crypto or fiat). It is common in blockchain play-to-earn games (P2E). In games where more challenging levels unlock unique NFTs, these utility NFTs are verifiable ways to rank gamers globally. Also, gaming NFTs can be used for purchasing in-game tools and financial transactions in the gaming world. Axie Infinity is one of many games that use utility NFTs.

2. Exclusive Event and Community Tickets

Because NFTs are immutable and verifiable, a good real-world utility is in using them to grant access to events. In this case, utility NFTs act as event tickets and community passes. They offer secure and fraud-proof access to communities, events, and hangouts- all in real-time. Social clubs, closed communities, and high-end events have started exploring this use case, and we are likely to see more of this in the near future.

An example that readily comes to mind is the Bored Ape Yacht Club (BAYC). Owners of this particular NFT are confirmed club members, as it acts as a form of membership card. Some of the perks they enjoy include exclusive merchandise, access to private online forums, and member-only special live events. Quite a few celebrities own the BAYC NFTs, including Tom Brady, Justin Bieber, Madonna, Neymar Jr., Memphis Depay, Stephen Curry, and Serena Williams.

3. Governance

4. Customer Loyalty Programs

* * *

Tagged with:

Recent Posts

Ready to build that empire?

Let’s get started