NFTs are making their way through our time, and that’s to be expected, given the fact that they help fill the current needs for ownership and authenticity in this increasingly digital world. And chances are, the popularity of NFTs will only continue to rise, as there now exist NFT utility ideas whose value lies not only in their originality but also in the perks that come with them.
Let’s explore further on this matter.
Utility NFTs are the next natural step of NFTs — they encompass what’s good about NFTs and make things even better for buyers by including attractive, redeemable NFT perks that come with owning the NFT.
Essentially, utility ideas for NFTs provide values further than the scarcity enforced by the traditional NFTs; and because of this utility-driven nature, they’re poised to become a game-changing phenomenon in the NFT world.
Utility-driven NFTs have undoubtedly caused a significant disruption in the NFT scene, and some even saw it coming from miles away. Proof of ownership on the blockchain alone isn’t enough to satisfy the growing needs of collectors everywhere, and when some celebrities start to offer added utilities to go with their NFTs, it’s when we know the game has changed.
Prior to utility-driven NFTs, NFTs were mostly in the form of digital collectibles with minimal real-world utility. In a word, they were mostly for artistic purposes, which is also why experts such as Gary Vaynerchuk claim that 90% of NFTs will have little to no value in three to five years. It’s a bold claim, but it does hold some truth to it, considering that utility-driven NFTs weren’t really a thing back then.
As the world gets more familiar with NFTs, we see more variety in NFTs, with metaverse NFTs and NFT utility ideas being one of the new up-and-coming NFT types. According to a recent study about NFT on nature.com, we see NFT with utility ideas leading the race and becoming arguably the most valuable NFT type, with its top 1% of assets having $12,756 average sale price — highest among all NFT types.
The recent surge of utility-driven can be seen in almost all industries. To help you have a better idea about how utility-driven NFTs are used to drive more values, here are some examples:
A popular approach for newer NFT projects right now is to allow holders of NFTs to earn passive income over time. Note that the keyword here is ‘hold’ as this is different from renting out and staking NFTs, since you only need to hold the NFTs to earn weekly or monthly rewards. It’s still uncertain how this would play out in the long run, but as of now, projects such as the Alpha Ape NFT marketplace are seeing huge success with this model.
Since an NFT is immutable and unique, it can serve as digital versions of tickets and passes for real-world events. In fact, there are already events such as the Doodles NFTs project where NFTs replace QR for identification purposes and could even potentially be the new NFT-gated retail experience.
NFTs have a lot of potential utility in the real world. For example, they could be used to represent ownership of physical assets. A car company, for instance, could issue NFTs that represent ownership of a certain model of car. The NFT would be stored on a blockchain and would be transferable to another owner if the car is sold.
This would provide a more secure and efficient way to transfer ownership of physical assets. In addition, NFTs could also be used to represent other kinds of ownership rights, such as intellectual property rights. This would allow creators to easily and securely sell or license their work. It would also make it easier to track and enforce these rights.
Despite being only a token, you can also lock additional content behind the purchase of NFTs. This additional content can be almost anything you want – from real-life, behind-the-scenes footage to special codes that give access to exclusive clubs and communities.
🔎 A famous example of this type of NFT application would be the Bored Ape NFT collection. It is currently the leading NFT project with various utilities that give rise to its fame, one of which is access to private online spaces with other token holders and other members-only live events.
People are going crazy over virtual lands in metaverses and spending as much as millions of dollars to get a piece of land (also called an NFT plot) next to their favorite celebrity. It might sound strange, but it could very well be the direction that we’re heading toward right now. In these metaverses, purchased lands are represented in the form of NFTs and like physical lands, you can also resell it or place it up for bids.
Similar to a standard NFT, a utility NFT is still a unique token on the blockchain which means it shares the same benefits such as cryptographic security, transparency, immutability, transferability, and so on. Where utility NFTs differ is where their real values come from – it’s all about the perks and applications that come with owning the NFTs.
Since it is the next big thing, creators are looking to add more utilities to their NFTs en mass, but most of them still fail to provide a real value for the buyers. To add utilities to your NFTs, there are proper steps you must take beforehand:
Step 1: Understand your audience
Before developing utilities for your NFTs, it’s important to understand who buys NFTs and what your audience wants from their purchase first, as this can vary from industry to industry. For art buyers, for example, they might want a real-life physical copy of the purchased artwork while for sports fans, it might be better to include sports-related perks such as exclusive meet-and-greet events with athletes.
Step 2: Creating a utility-driven NFT collection
‘Converting’ isn’t the right way to think about your utility NFTs . For the best success rate, you’ll want to create a brand new utility-based NFT collection that has utility as its main selling point. To do this, simply create NFTs the same way you would, but before putting them on sale, make sure that your NFTs come with the purchase of the NFTs as a kind of unlockable content.
Step 3: Promote your new NFT collection
Once your utility-based NFT collection is created, you might want to promote it further to gain more traction and increase its sales. Much like the earlier steps, this step is crucial as an unpromoted NFT collection means wasted potential.
📌 More about this: How To Promote NFT Collection: 10+ Best Free and Paid Ways
It’s easier to just show you. Here are some of the famous, utility-driven NFT projects that serve as inspiration for others to follow
Quentin Tarantino is probably up there on your list of favorite directors, and it’s no wonder since the guy is the mastermind behind various famous titles such as Hateful Eight, Inglourious Basterds, etc. Just recently, Quentin Tarantino announced the launch of his first seven NFTs featuring uncut scenes from his breakthrough 1994 film “Pulp Fiction”.
NFT films Pulp Fiction
What makes these NFTs special is that owners of each NFT — and only them — can get access to bonus content including the original, handwritten script pages, new commentary from Tarantino, along with details about the uncut scenes as well as about the director himself. Needless to say, this is a genius move on Quentin Tarantino’s part, and it’s clear that only more film projects will continue down this trend.
King of Leon is the first band to have ever released an album in the form of NFT, and it was a wild success. The album includes various special perks including limited-edition vinyl, digital download of the music, enhanced media cover, and the best part is that fans will get the chance to auction six golden tickets which include never-seen-before perks such as front-row seats for life.
Kings of Leon’s “‘When You See Yourself’” album
Thanks to all these perks and the love of NFT fans, the band managed to generate nearly $2 million in their NFT album sales. Truly, “‘When You See Yourself” looks to be a prime example for other bands to follow.
CryptoBaristas is an interesting take on crowdfunding. It combines the best part of crowdfunding with the best part of NFT to make what you would call the new way for entrepreneurs to do business.
CryptoBaristas: NFTs with caffeinated perks
Basically, the idea is that every NFT bought in the shop will include “caffeinated perks” for life which can then be used at future cafe spaces. Yes, the keyword here is “future”, as there isn’t a physical location for the coffee shop yet, which may seem a little bit of a risky investment for some; but the perks offered by simply holding a Crypto Barista NFT is almost too attractive to pass up:
Backed by Shopify, Doodles is an up-and-coming NFT project with a unique art style and various utilities to come with it. And despite just getting started, Doodles is one of the fastest-growing NFT projects out there, to the point that it even had its own first ever NFT-gated retail experiences where participants can join and use NFTs to unlock exclusive experiences and unique goodies.
To sum it up, their NFT utilities are:
The Walking Dead NFT collections remain big business for fans of the AMC show. The Walker Access Pass collection dropped on March 3, 2022 and contained 5,000 walkers (zombies), each with more than 30 traits. Because of its fame and the attractive utilities that come with it, the collection was sold out in less than 24 hours.
Access Pass holders gain exclusive perks such as:
For fans of the metal band Avenged Sevenfold, NFTs are providing a new way to show support and get closer to the band. The group recently released 100 exclusive tokens, with 7% having a “gold eyes” attribute. These tokens provide access to meet and greets at any concert, for the rest of their career.
Other holders can get their hands on new and exclusive merch, early access to ticket sales, and updates. Utilities are plentiful here - not just for the golden eye token holders. This collection sold out in less than 24 hours, proving the high demand for fan-centric NFTs.
It’s still unsure to say if NFTs will survive the coming years, as something still felt missing from the big picture. And as it turns out, the utility was the missing piece all along. Projects are now starting to incorporate elements of utilities into their NFT projects, making a future of utility-driven NFTs one that doesn’t seem that far-fetched.
Here at NFTify, we’re all for utility-driven NFTs. A store on the NFTify network, Pálinka, is having great success with their utility NFTs offering holders real-world utilities and the ability to play a Pálinka Farm board game where their NFTs are used as game cards.
⭐️ Create a marketplace for free with NFTify now and find out how the platform enables limitless flexibility when creating utility NFTs.