Crypto for Experts NFTs

What are Utility NFTs?

Utility NFTs

Non-fungible tokens (NFTs) have been on a bull run since 2020, reaching eye-popping heights of $69.3 million for a single digital asset. Let‘s take a step back and see where it all began. NFTs have been first introduced back in 2012 by Vitalik Buterin’s project Colored Coins but they remained mostly under the radar until the introduction of CryptoKitties in 2017 when the NFT space started attracting more people. Since then many iconic NFT collections have dropped and sold for millions around the world. The rapid pace of evolution in the NFT space has shaped a new kind of digital asset, beyond the JPEGS, GIFs and memes we saw the rise of utility NFT projects. These utility NFTs aren’t just art, they might be the key to the future as they hold their value by providing added utility…. and much more.

So, What Exactly are Utility NFTs?

Since the earliest days of humankind, we’ve expressed joy when collecting things and connecting with other like-minded folks. 

Utility NFTs are non-fungible tokens that represent art while also providing access, opportunities and other benefits to their holders. These utility NFTs can be used in applications, to qualify you for airdrops, exclusive opportunities and experiences, invites, and early access to events or products. Their value is determined by their scarcity, application, defined value and tendency to appreciate in value over time. The concept isn’t necessarily a new one, as it’s somewhat similar to “digital trading cards”. However, it is backed by Blockchain technology which provides a permanent immutable, identifiable and publicly accessible record.

What Can NFTs Be Used For?

The NFT use cases are booming, with new scenarios coming out every day not just for gamers, traders and investors, but for everyday people as well. NFT applications have led that boom in the market incorporating real-world integrations for managing assets, logistics, sensitive data and more. The NFT utility products offer a very transparent process oversight ranging from history, manufacturing, rarity, origin, and many other aspects. Here are some of the most exciting use cases of NFTs in society today:

Fashion

Digital fashion isn’t anything new under the sun. For decades, gamers had the ability to purchase digital clothes and accessories for their characters and avatars. Today, when purchasing an NFT utility the user can implement this “collectible” on various platforms, forms and shapes. Besides being a virtual fashion piece in games and social media, some NFT utilities offer options to attend virtual fashion shows, immersive retail shopping experiences, and other perks the NFT has to offer.

Gaming

Gaming is by far the most popular use case scenario for NFTs, applicable from play-to-earn models, casual farming, collectible role-playing games, RPGs and strategy simulations to the metaverse- allowing in-game trading, instant transactions, and much more. The opportunities with in-game NFTs are endless, ranging from having part ownership in the game, trading and selling earned tokens or exchanging gaming NFTs across various platforms in return for real money. One of the most popular RPG games which incorporates gaming NFTs is Axie Infinity where players can raise and breed a variety of Pokemon-like monsters, each of which inherits various traits from its ancestors. These monsters are collectable and tradable both in game and via NFT marketplaces.

Tickets for Events

The concept of tickets has been around for centuries. In the early 1700s theater managers began offering prepaid tickets to better control the theater’s traffic. It wasn’t until 2010 when paper tickets began phasing out, being replaced by the well-known QR codes or digital tickets due to their convenience above all else. The next ticket update may have already arrived. NFT utility tickets combine the best of paper tickets and QR codes.

The security, convenience, limited-edition perks and incentives of purchasing the ticket at a predetermined price or at auction at a NFT marketplace is a user-engaging upgrade to the dated ticketing systems. Furthermore, the holder of the ticket can keep it as a collectible in their digital wallet, which can be easily accessed from a mobile device. Let’s not forget the massive paper industry producing gargantuan amounts of waste contributing to the already hot climate.

Depending on the type of the event or NFT use cases, the digital asset may continue to provide access to other events or members-only communities.

Virtual Land

Have you ever heard about the Metaverse, Decentraland, The Sandbox or Axie infinity? To put it simply, you can do almost everything ranging from a wide range of activities, including advertising, hosting experiences, socializing, gaming and more. NFT applications provide the ability to trace ownership, purchase via smart contract, and conduct various business on virtual properties. In addition, in the real estate industry, NFT applications can be used to represent physical properties. Virtual real estate provides digital tokens which can be linked to land deed data and proof of ownership, track property value data, simplify and speed transactions. The culmination of all the perks that blockchain technology offers creates a vibrant ecosystem of security, inclusivity, and mutual trust.

Exclusive Communities

Who doesn’t enjoy being part of an exclusive community with access to gated content and events in either the digital or physical world? One bright example here is the Bored Ape Yacht Club, with an NFT utility token that offers exclusive membership to a special club. The entry fee is buying a Bored Ape NFT utility token which is stored as a token on the Ethereum blockchain costing around 0,12 ETH (that was the price back in 2021). After you’ve made your purchase, the avatars and art unveil but the real value behind the project proved to be the community that has grown with time.

For the members-only spaces:

  • The bathroom, an art space
  • The Mutant Apes Yacht Club, provide alternative “Mutant”
  • The Bored Ape Kennel Club, provides pets for apes
  • The merch store, VIP merchandise

BAYC members also have access to the Apes vs. Mutants mobile game competition. In short, Bored Apes food fight Mutant Apes.

Music

Music artists can benefit a lot by using NFT applications, turning a song into an NFT. Users purchase the track as an NFT utility token becoming the owner of the asset, proven to be original and unique and contributing directly to the artist with royalties. One reputable NFT application is Sound.xyz which is built on Web3 technology and connects listeners and artists with a more collaborative music experience.

Profile Pictures and NFT Avatars

Why so serious? NFT Avatars are becoming popular profile picture choices across social media, giving the user the option to show off their unique style. The immersive ecosystem built on blockchain technology makes it possible by simply connecting your crypto wallet which will enable you to display your own NFT utility art as your avatar.

Upcoming Utility NFT Projects

The following Utility NFT Projects are certainly worth checking out:

The Bottom Line

The blockchain world is rapidly expanding in all directions as the use cases for NFT utility are growing every day. This technology is still in its early stages so we can expect many new higher levels of utility NFT projects to develop in the future.

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