What is NFT Utility? Wondering how to add utility to NFT Art? Have you been hearing plenty of utility and value in NFT these days? You’re at the right place. This blog covers the Utility NFT examples and helps you understand the next big thing in this multi-billion dollar industry of NFTs
NFTs began with art being turned into digital non-mutable assets. The industry seems to have grown into providing a use-case scenario, a value, or a utility to the NFT that helps the NFTs stand out in a market that has been getting a consistent stream of artists interested in minting their art on the metaverse.
What Does NFT Utility Mean?
While many of the NFTs add marketing buzzwords and jargon to the pitch deck and white paper, truly the NFT utility is about giving something more than a digital asset to the buyer.
A practical use-case, application, or an added value outside of the metaverse defines a Utility NFT.
Many of the NFT’s Utility include access to special events, products, and experiences in the real world. Also referred to as NFT 2.0, currently, these NFTs help are of five types:
- Community NFTs
- Fantasy Sports NFTs
- Gambling NFTs
- In-game NFTs
- Social NFTs
Holding the NFTs gives special utilities and value to the NFT owners. NFT owners like to feel like being in a VIP circle. The feeling is further fueled with an add-on utility or value that can be displayed in real-life.
An exclusive event invite, a gaming or gambling token, or special content unlocked with NFTs – all of them make the owner feel like being part of an inner circle.
Why Is Utility NFT Important?
There has been a consistent meteoric rise in the popularity of the NFTs. However, they are, at best, a digital asset. There have been valid and consistent concerns over the bubble of the NFTs due to the sky-high prices without a single asset having a real-world application or use.
The prices of NFTs are often arbitrary, making events and celebrities rake in more than others. It isn’t entirely about art either, as it should ideally be. NFTs were being compared to the DotCom bubble of the 90s before the arrival of NFT 2.0.
To sustain, NFTs had to evolve. NFT Utility serves an important function of adding value and utility to the NFTs that provide a real-world use case. Adding Utility will also help democratize the process, reducing the gap between celebrities and commoners on the metaverse. NFT 2.0 will also help the world survive the bubble-burst of arbitrary valuations in web 3.0.
What Are Some Utility NFT Examples?
There are several Utility NFT examples from various different fields, like in gaming, fashion, gambling, ticket/token gates, investment, scientific funding, etc. Let’s check some of the popular examples in different fields.
- For example in In the gaming metaverse, World of Freight is a racing game where the NFTs generate $WOF tokens passively. These tokens in turn help in upgrading and customizing vehicles within the game. Fractal gives the NFT owners a special pass to exclusive content like in-game content, characters, secret levels, etc.
- Several play-to-earn games and items are also among popular Utility NFT examples. Games like Zed.run (digital horse racing where horses are NFTs), Axie Infinity (the pioneer in the gaming NFT), CryptoManga (NFTs represent pseudonymous identities in a post-civilization world of DeathLess City), and Loot (adventurer gear items as NFTs like pieces from Dungeons and Dragons).
- Digital Luxury and Fashion Items have also found a utility with several interesting and expanding metaverse projects. CloneX provides ownership of the 3d files with the fully customizable digital NFT avatars. There’s a possibility of real-life creation of exact clothing and accessory items.
- Gambling NFTs form a major portion of the NFT Utility on the metaverse. Coinleague is another Utility NFT example in fantasy gambling which works like regular fantasy gambling but rewards NFT holders with revenue share and special benefits from the contest.
How To Add Utility To An NFT?
The question, though, stays: ‘how to add utility to an NFT Project?’ There are several different methods of adding NFT Utility. Let’s check the top four such cases:
Link NFT’s Utility With Physical Products
One of the most popular methods of adding utility to an NFT is by providing a replica physical world product. The method is popular among NFT Jewelry and Fashion products. Since NFTs are about creating unique digital assets that can’t be copied, the physical counterparts will also be a unique piece of art, thus increasing the value of both the NFT and the physical product.
A physical asset is even more valuable for artists and photographers. Artists can send a physical asset, like an oil painting or a framed photo print to the NFT owners as proof of purchase. This won’t only help in creating utility but also make the art itself more visible and valuable.
NFT Utility Linked With Exclusive Events, Shows, Or Tickets
NFT buyers could also be rewarded with exclusive events and show passes. They could also double up as VIP tickets to events. A special screening or QnA could also be offered – depending upon the type of NFT. This option is virtually limitless, depending upon how much value you want to add to your NFT.
Special discounts for limited-edition products, especially if they can’t be offered for free, are another option for adding value and utility to the NFT.
NFTs With Passive Income Utility
Passive income can be provided to the NFT owners. Slotie’s NFT Utility is in this model and distributes half its revenue to the Slotie (NFT) owners. This provides a consistent passive income stream to the NFT buyers and helps sustain the ecosystem. A similar model can be used by providing dividends. It is especially useful in the case of the limited number of NFTs released by the platform.
A similar model is possible with staking, but there’s a need for the active involvement of the owner in staking. In the passive income model, the NFT owner need not do anything in particular.
Special Content Access
Quentin Tarantino recently launched his first NFT collection, where NFTs featured uncut scenes from his classic 1994 film ‘Pulp Fiction. Kings of Leon released an entire album ‘When You See Yourself’ on the metaverse. Providing access to content as unique automatically adds utility to the NFT.
NFT Utility And Value Are The Way To Go
While the NFTs are revolutionary in their concept, the era of NFT 2.0 has just arrived. NFT Utility and Value are the way to go. While an NFT provides a rare digital asset, the utility helps add more value to the NFT in way of some physical asset, passive income, or exclusive events and content.
The utility NFTs help the owners feel like they are a part of an exclusive society. NFT creators and platforms can add utility in various ways to help create that exclusive society for the NFT owners. Since Web 3.0 has evolved, the Utility NFT or NFT 2.0 is the way to go for both creators and owners of NFTs.