NFTs have grown tremendously within the last couple of years. If you have followed NFT news, you must have heard of digital art pieces and GIFs sold for mouthwatering figures. This blog’s title will easily leave you wowed and leave you with some unanswered questions. For example, who decides how valuable an NFT is?
Just like traditional art, the value of an NFT is subjective. It’s tied to the artist’s brand, reputation, marketability, and even its potential use cases. Because it’s scarce, people pay attention to owning one, which drives the prices up. Summarily, the valuation of an NFT is tied to its scarcity, market demand, and its utilities.
The NFTs utility category includes collectibles valued based on the opportunities or access they bring to the holders. This type of NFT is bought because the token holder or investor wants exclusivity. Let’s look broadly into NFT utility meaning and explore its future use.
What are NFT utilities?
NFT utilities or utility NFTs are digital collectibles with intrinsic value. They unlock specific privileges for events, experiences, products, and dividends. Utility NFTs differentiate themselves from others in that they go beyond rarity or profile picture display. All utility NFTs are NFTs, but not all NFTs have utilities.
The market is growing, and this digital asset class presents vast opportunities for creators. Major sectors are leveraging NFTs to boost customer engagement and drive more sales. So far, the sectors disrupted by this digital asset class are gaming and fashion.
The gaming industry, particularly blockchain or P2E, has exploded, thanks to NFTs. In 2019, the blockchain gaming sector generated about $150 billion in revenue. It went higher the following year, with an additional $11 billion generated in revenues. By 2025, experts predict that revenue generation will hit $322 billion. The demand for digital assets is the main factor driving these figures up.
Thousands of games emerge from the space daily, with each of them incorporating NFTs. Games such as Axie Infinity and GemUni capitalize on the popularity of NFTs to engage their players. The in-game assets, avatars, weapons, goods, etc., represent an NFT. So, when you possess one, you already know that it’s valuable and can fetch you some money when sold on the game’s marketplace or secondary market.
Traditional game companies, like Ubisoft, have ported into the NFT world with the Quartz launch. This shows the potential of utility NFTs and the future for this digital asset class.
Let’s talk about the fashion industry. This sector is also experimenting with utility NFTs with brands such as Nike and Adidas at the forefront. These brands are using NFTs to connect with their customers better and publicize the launch of their products. They auction their products to holders of a particular NFT, offer discounted prices to exclusive NFT holders, and even grant them access to some events. Both apparel brands have launched their metaverses to boost the shopping experience with their customized NFTs.
Another sector that’s getting impacted by the NFT wave is entertainment. Artists enjoy the experience, leveraging Non-fungible tokens to interact with their loyal fans and grant them access to live shows in the metaverse. Shawn Mendes and Tyga have done this. Recently, Hip Hop superstar Snoop Dogg revealed plans to turn his newly acquired record label, Death Row Records, into an NFT label, where his artists would perform in the metaverse.
Other projects in other spheres, such as OneRare and VeeFriends, have NFTs with real utilities. For example, a OneRare Dish NFT grants you access to eat at a special restaurant and meet top-class chefs. Holding a VeeFriends NFT provides you with a ticket to see renowned marketing expert Gary Vaynerchuck. The utilities of these NFTs are expanding, and this is just the beginning. We expect more sectors to leverage this digital asset class in the future. However, everyone must know some things before buying the NFTs.
Why are NFTs the future?
The various use cases of NFTs are proof that they have come to stay. From the art world to several sectors, NFTs are being deployed as a tool to improve the brand-customer relationship and drive sales. Because they are minted on the blockchain, there’s a low risk of manipulation.
Over the last couple of months, NFTs have shifted from being digital collectibles that the world knew them for to a tool used by brands to show and market their merchandise. This is a game-changing concept. It only means that people and brands will explore other ways to use NFTs, making the future secure.
Top-grade utility NFT projects
The NFT projects that provide various utilities are abundant. Below are some of them.
1. VeeFriends
2. FlyFish Club
3. Women Rise
4. MekaVerse
5. Axie Infinity
6. Bored Ape Yacht Club
7. Decentraland
8. CryptoPunks
Final Take
NFTs have come to stay. Their expanding utilities only make them indispensable. Soon, they will be utilized in a way that will leave everyone surprised.
NFTs are sold on marketplaces like OpenSea and Snowcrash, which run on blockchains. We have heard instances of NFT scams where NFTs were stolen and listed elsewhere. OpenSea experienced this last month during its migration to a new smart contract.
Events like these can be averted with a cybersecurity firm like QuillAudits on top of things. QuillAudits audit smart contracts and DeFi applications, ensuring that they are bug-free. QuillAudits helps marketplaces like OpenSea maintain good security practices as a certified security firm. Want a smart contract audit? Contact QuillAudits here!
