NFTs or Non-Fungible Tokens have not popped up recently. They have a long history even before the eye-popping $69 million auction of Beeple’s Everyday. It has been a few years since NFTs have blasted off the ground. However, the auction of Beeple’s artwork has instantly grabbed the world’s attention towards NFTs. As a matter of fact, the revenue that comes out of the NFT space will touch $3,546 million by the end of 2023 and it will grow to a whopping $8,068 million by 2027.
There is hardly any doubt about NFT collectibles’ sustainability and market growth. Like cryptocurrencies, Non-Fungible Tokens are of different types like PFPs and avatars, photography NFTs, Music NFTs, in-gamer NFTs, and utility NFTs, to name a few. And similar to cryptocurrency wallet development, companies have to ask for a particular type of NFT development from NFT designers and developers.
These days, experts are researching Utility NFTs: whether they can ensure the next big leap in NFT advancement. The massive growth in the market value of NFTs has invited many discussions on the possible utilities of NFTs. The following discussion will help companies determine the business opportunities they brings.
NFTs: A Brief Intro
NFT is the revolutionary acronym leading companies and people to the digital gold rush, dabbling with advanced technology. NFTs are unique and non-interchangeable digital assets getting stored on a blockchain, and they vary from photos, videos., and audio to digital art and illustrations. Similar to the custom blockchain development company, offering customized blockchain solutions to companies, NFT developers also provide different kinds of NFTs linking their clients’ requirements. For instance, a game studio can dig into in-game NFTs to attract more gamers and NFT enthusiasts to play their games, while musicians can consider developing music NFTs to expand their fan followings.
As NFT development surges, companies have become more likely to bring much more to the table in terms of these peerless digital assets. NFTs have introduced a brand-new layer of user experience and connectivity between the NFT marketplace and buyers through novel and mint deployment and exchange.
Utility NFTs: What are They?
Utility NFTs are still in the nascent stage of establishing real-world value-based NFT use cases. As we know, Non-Fungible Tokens are cryptographically unique and hold value much more than just images powered by blockchain. The value of utility-based NFT tokens holds the potential to transcend the boundaries of investment; they can metamorphose how we work, interact, and play.
Primarily, utility NFTs are valuation-based NFTs, offering intrinsic value to the buyers in addition to their uniqueness and scarcity. On buying a utility-oriented Non-Fungible Token, buyers can receive a physical piece of art that resembles the purchased NFT. This type of NFTs can revolve around being an exclusive membership, special access to an upcoming event, or something that the buyer can use in the digital world in the future.
Utility NFTs get classified into the following categories:
- Community NFTs
- Fantasy Sports NFTs
- Gambling NFTs
- In-game NFTs
- Social NFTs
The Rise Of Utility-Based NFT Marketplace
The next wave of utility-based Non-Fungible Tokens is dynamic. Artists, and game designers to celebrities are arguing over this new technological disruption. When a buyer decides to purchase a piece of art or artifact to reciprocate the emotion the art evokes, it becomes a personal utility. The internal utility is the earliest version of utility NFTs. Internal utilities are the utilities within the project itself. This kind of utility can take the shape of airdrops, gamification, and many more.
Hawku has already raised around $4 million to build NFT marketplaces pivoting around utility and gaming. (Venture Beat)
The Frontline Applications of Utility NFTs
Followings are some of the notable sectors embracing the potentials of utility-based Non-Fungible Tokens:
For the past few years, gaming NFTs have been showcasing a brand new approach to avail ownership over in-game collectibles. Video games is one of the most potential sector embracing the NFT possibilities. The video game sector is in competition to understand the use of utility-based Nonfungible tokens in gameplay.
Virtual Real Estate
Real estate is another prime sector leveraging NFT benefits. Besides considering cryptocurrency wallet development, real estate companies and agents are after NFT design and development to attract clients. With the rise of virtual lands, metaverse office spaces, metaverse real estate properties, Etc., isn’t it evident that utility Non-Fungible Tokens will soon spread their roots deeper across the heart of the real estate industry?
Web 3 technologies like NFTs have already turned their attention towards the fashion industry. Digital fashion shows, fashion apparel, accessories collectibles, virtual fashion stores, Etc., are bringing exclusive shopping experiences to people. Virtual fashion for avatars in games is only the beginning of the utility for non-fungible tokens in the fashion industry.
NFT auctions are like goldmines, letting both sellers and buyers indulge in a range of NFT utilities. The top utility NFTs marketplaces like OpenSea, Raible, and SuperRare, are squeezing profits from NFTs sales. These marketplaces follow the conventional auction model and revenue model. NFT platforms charge predefined fees for each sale.
So, utility-oriented Non-Fungible Token is the future in terms of demand and offer. It is true that the development and deployment of this kind of NFT are in an early stage. Still, it is the most suitable time to partner with a knowledgeable partner and shape an advanced utility-pivoted NFT marketplace, to stay ahead of the trend.