Beyond pfps: The many utilities of NFTs
We know you have your opinions on NFTs - these crypto world elements are impossible to ignore. We are also aware that not everyone is looking for a hexagonal twitter profile image (Oh hi Mark!). Consequently, as the web3 space keeps introducing NFTs into different spaces of its own, it becomes essential to take a good look at them and understand where NFTs are made use of.
But before you go ahead, there are two things to keep in mind.
- NFTs are web3 records that allow you to own both onchain and offchain products.
- While many of us recognize NFTs as being synonymous with ownership of art, art is far from being the only space NFTs are useful in.
In essence , anything and everything you would like to own can be given an NFT in the web3 realm. In fact, the future of NFTs is predicted to be in their utility rather than their association with art and collectibles(Who would have thought?).
NFTs for Brands
Popular brands have started using NFTs in three key ways—marketing, consumer loyalty programs, and fundraising.
Brands decided to make use of the buzz around NFTs for better marketing results - and it worked! Shl0ms, a popular artist, infamously lit up a Lamborghini on fire and converted that into (brace yourselves) 999 NFTs. Lamborghini itself, though, went all-in in an effort to create 5 NFTs (carefully crafted pictures of a Lamborghini Ultimae lifting off into space), using carbon fiber that it had sent to the International Space Station! Lamborghini has since decided to embrace the web3 world, by exploring the Metaverse, and launching additional NFT editions. Similarly, Nike has expanded its presence in the metaverse by purchasing RTFTK, a well-known digital sneaker brand.
Membership and Loyalty Programs
NFTs, apart from functioning as a proof of membership, can allow brands to give customers experiential and social value. Through a new 'web3 experience' Starbucks Odyssey, Starbucks, the world renowned coffee brand has partnered with the blockchain network Polygon to offer benefits to Starbucks Rewards members and Starbucks partners (employees). By allowing members to buy and sell NFTs that will enable "immersive coffee experiences," this effort will help Starbucks retain its customer base while also building a digital community and a channel of communication with the members.
Due to their rarity and the way they are traded, NFTs enable brands to foster community and improve brand perception through fundraising activities. On National Youth HIV/AIDS Awareness Day, MAC cosmetics entered the NFT market by introducing Viva Glam NFT, their charity NFT collection featuring art by popular artist Keith Haring to support their charitable fund and the Keith Haring foundation.
Other companies that have since jumped on the NFT bandwagon include JP Morgan, Adidas, Prada (in fact, Adidas and Prada collaborated to release a very innovative user generated NFT project), Burger King and TIME Magazine.
Into The Metaverse
The SandBox, Decentraland and Voxels are some of the most popular metaverses in the web3 space. These metaverse platforms make use of NFTs to allow trade of wearables, in ownership of virtual land (also known as virtual real estate) and in "token gating", to grant members-only access to benefits and activities.
If real estate isn't your thing, think about owning Metaverse spaces as ‘Virtual Estate’. That is made feasible by NFTs, and holders of well-known NFT collections like The World Of Women already have OnCyber residences in their virtual world. The blockchain has proof of ownership, which enables the holder to manage access to the land. Owners also have the option to move their estate between metaverses.
A well-known NFT collection called CryptoPunks gives interested holders ownership over "Meebits”, 3D metaverse NFT characters, for identity purposes in the space. The metaverse Decentraland also allows users to customize the appearance of their avatars by purchasing suitable NFTs (anything that is a part of a voxel NFT avatar, including body shape, mask, helmet, feet and skin). These wearables can be created by the users themselves, and/or traded in the marketplace.
NFTs are unique and have certain rarity levels associated with them. Taking advantage of this, artists and developers provide special benefits to their NFT holders, enabling them to take part in 'exclusive' experiences. Microverse, a platform for creating virtual worlds capitalizes on this need for a sense of (almost exclusive) community by letting users create their own virtual worlds and "token gate" them so that only specific NFT holders are permitted to access, attend events, or engage in other community activities.
Game your NFTs away
In the world of web3 gaming, NFTs represent in-game assets and are made use of as keys to unlock game experiences.
Trading in-game assets
From custom made swords to facial hair and shorts, users can create their own assets in games and give them an NFT. NFTs allow the trading of these assets to become transparent thanks to the underlying blockchain network. Since NFTs exist in the web3 space outside of the game, even in the case that the game is over, holders continue to have access to these elements.
Given their interoperability, these NFTs can be used in other web3 games as well. Sandbox, Decentraland and Silks are some of the important names in this industry. Similarly, some games reward their users with NFTs on completion of game levels or grant them as keys to unlock remaining levels or new experiences in the game.
Play to Earn (P2E) games, where you play to own digital assets, are giving rise to the GameFi industry–A term coined by combining ‘gaming’ and ‘decentralized finance’. Since the rewards are NFTs , they have monetary value outside of the games as well. As a result, GameFi outperforms web2 game reward strategies and is a key driver of interest in P2E games. A popular example is Cryptomanga, a collection of 5555 NFTs which are unique shells (with story arcs of their own) that will be used in the game’s P2E venture called ‘Darkbattle’.
We have all heard how Real Estates are often good investments, but only few know the pain, the paperwork and time that goes into the business. In addition to this, there's that additional amount you pay in commission to third parties that help you make a “good deal”.
However, these assets (like any other real world assets) can be traded as NFTs. Blockchain records all transactions which helps in keeping track of ownership and general history of the estate. The code associated with NFTs can be updated at any time, and as users trade the estate, the NFT updates itself over and over- much better than the ‘real world’ status quo. Peer to peer transactions also generally cut down on the amount of money that goes into the activity, making real estate NFT an attractive option for investors.
Did you know that Spotify takes a minimum of 30% of musicians’ revenue, paying artists a meagre $0.003-$0.005 per stream? We know, it's terrible.
While artists battle huge capitalistic labels , NFTs promise solutions - by allowing musicians to earn royalties directly from their fans. Furthermore, in an effort to harness people's infatuation with well-known NFTs, the industry is also producing sub-brands (take Timbaland’s new label for instance) and is incorporating them into music videos and events.
Returning the Reigns to the Artists
Platforms like Audius allow artists to distribute their music as NFTs, or immutable and timestamped records for their creative works . In general, a ticket to a show, music videos, songs, albums - virtually anything associated with the artist that can be monetized can be tokenized. Artists thus do not have to rely on labels and distributors, allowing them to earn more from their creations while maintaining originality. Coachella, one of the largest music festivals in the world, sold lifetime tickets to its festivals as NFTs.
NFT based Collab and Events
In a recent collaboration, Eminem and Snoop Dog used their BAYC NFT avatars in their music video. Moving one step further, both artists became the first performers to actually perform as their BAYC NFT avatars at the most recent MTV VMA awards. This, is not all. In November of 2021, Universal Music announced the launch of its first virtual band Kingship which is simply a group of four NFT characters from BAYC (Dawn of the planet of the bored apes it is).
NFTs as digital identities
One of the most traded NFTs on OpenSea at the moment is ENS, or Ethereum Naming Services.
Crypto addresses, which are extremely difficult (read: impossible) to memorize since they are long sequences of alpha-numeric characters, are being replaced by ENS NFTs, which are human readable names. The rising popularity of ENS has led to some names going for outlandish prices, and traders hoarding the ENS domains they think will earn them a large profit in the future. jef.eth, for instance, is currently up for sale on OpenSea for a paltry 100 trillion ETH, which amounts to only around $127 quintillion! The rising popularity of ENS and the increasing number of hoarders led to Vitalik writing a post about how ENS pricing can be fixed. Note: He gets a few things wrong!
ENS has many interesting applications beyond replacing unwieldy wallet addresses and making transactions considerably simpler (you can send cryptocurrency to the ENS domain rather than the wallet address). ENS has many use cases, and here are a few highlights:
- It serves as your web3 identity and can be used to create decentralized social media graphs that can allow you to carry your social media profile across different social media platforms.
- Having an ENS allows you to set up decentralized websites when combined with a file storage platform like IPFS.
- Access on-chain messaging protocols like mail3.
Lastly, NFTs are also big in the gig work economy, and in the fashion and art industry. By now you must be convinced that fanatics of the NFT world aren’t just multibillionaires looking for million dollar cartoon profile images.
If you're looking to buy your first NFT or are already a seasoned trader, there are many NFT analysis tools like icy.tools, NFT Hud, and RoverX that can help you pick a project with a solid team and community, which almost always translates to a high growth potential. So go ahead and purchase your Twitter PFP NFT now!