NFT Utility: All the Benefits of Buying An NFT

    NFT utility is an aspect that sometimes makes or breaks your decision for joining an NFT community. In other words, an NFT collection is going to sound a thousand times better if they offer utilities. Nowadays, people don’t buy NFTs just for art- they are just buying them to flip for a quick profit. However, people are lured to buy into the non-fungible world for the benefits that come with it. Keep reading to find out more about NFT utility and the 10 ways it could possibly benefit YOU!

    What Is NFT UTILITY? 

    Utilities are NFTs that you can use outside the limitation of non-fungible tokens. They give you certain privileges or rewards and sometimes even certain rights that no one else can access. Therefore, the value of the NFT in question increases with the way we can interact with it. Or, how we can benefit from it! 

    In definition, an NFT utility is a non-fungible token with added applications and use. Aka, uses other than just representing unique digital assets. They have additional characteristics in the form of benefits, rewards, or more rights to their holders.


    Imagine that you have a rollercoaster ride with 200 seats and 200 tickets. Each ticket is numbered differently from 1 to 200 and every ticket allows its holder entrance to the ride! Therefore, the utility of the ticket is the entrance to this ride!

    Therefore, the NFT utility works in a similar way of granting you something in return. If you invest in the NFT, you get something in return! Ultimately, this cultivated the mindset of “what’s in it for me?”.

    Usually, you can check whether or not a collection offers utilities from the project roadmap. They include the utilities and all other benefits that come from joining their community. 

    How Do NFT Utilities Work?

    NFT utility work in the same way that any other NFT works. So, this means that they are both crypto assets on a particular blockchain. The project creators decide what they want to give the holders of their NFTs. Therefore, it doesn’t actually need anything added directly to the NFT. Some creators could opt for additions to the smart contract – especially when it relates to commercial use!

    Top 10 Types of NFT Utility With Examples

    1- Community Status

    Community Status-01

    The first and most important NFT utility is belonging to an NFT community. It reflects where your interests and thoughts lie when you choose to get an NFT PFP from a specific collection.

    For example, if you own a BAYC or Cryptopunks you’re considered one of the Whales. If you own a Sappy Seals NFT you are part of a very bubbly and joyful community. While, owning a Moonbirds NFT says that your are an art collector.

    2- Profit Sharing

    Profit Sharing-01

    It’s unclear if NFTs will ever be deemed securities, which would open the door for direct profit-sharing. However profit sharing can be a utility that comes in many ways. its ultimate goal is to generate passive income for the NFT holder.

    For example, if you an an owner of a pudgy penguin NFT that got made into a physical toy ,you get profit every time that toy is sold. You can read about that here.

    3- Digital Rights

    Digital Rights-01

    Some NFTs drop with A CC0 license, meaning anyone can copy the artwork without legal prosecution. However, others out-right claim that there are consequences if you just “screenshot” the artwork. That’s why one of the attractive NFT utilities out their is owning digital copyrights to the NFT.

    For example, holders of BAYC NFTs have commercial usage rights of their apes and can do whatever they want. This includes creating merch and selling them, or opening a restaurant with that BAYC logo. Which is what Eminem and Snoop Dogg did with their apes when they created a music video out of them.

    4- Exclusive Experiences

    Exclusive Experiences-01

    One of the most captivating types of NFT utility projects is ones that offer exclusive access, specifically in-real-life experiences. Sometimes exclusive access could mean special discounts for limited-edition products. They can also give you spots on future whitelist projects for early NFT drops.

    For example, Gary Vee offers the holders of his NFT collection tickets to the VeeCon conference via airdrop NFT tickets! Also, holders of Valhalla NFTs hang out for movies or random meet-and-greets. 

    5- Voting Rights

    Voting Rights-01

    You may be familiar with the concept of a DAO. One of the special perks an NFT utility can offer is the ability to vote on the future of the NFT project. It’s like owning a seat at the director’s table.

    One of the leading examples on this is definitely owners of the Nouns NFTs. Another innovative example is genuine undead with their web 2.5 approach to NFT governance.

    6- Physical Products

    Physical Products-01

    This may be an expected utility out of anything really. Physical products are usually merchandise linked to the NFT holders. This idea paved the way for POAPs and phygital NFTs.

    For example, Azuki created a physically-backed token to their NFTs’ holder that allowed them to receive special merch. CloneX also took on that road and shipped their community some merch, unfortunately it was kind of a disappointment!

    7- Loyalty Rewards

    Loyalty Rewards-01

    Best utility NFT projects offer special rewards for their most attentive and loyal members. This acts as an incentive for a holder to feel like his NFT investment paid off well. Loyalty rewards come in the form of giveaways, special codes, discounts, and other rewards.

    For example, Starbucks innovated NFTs with their loyalty program. Also, holders of Crypto Baristas NFTs get discounts to all their future café locations, online store, and all of their merch!

    8- Airdrops


    This is mostly a promotional strategy to encourage people to join an NFT community. It helps to bring attention to the brand itself. It is mostly evident in the dramatic airdrop  stunt digidaiku pulled during the Super Bowl.

    But, make sure that the airdrop is announced publicly by the brand. Don’t believe anything you get on a private DM! It is probably someone trying to pull an NFT scam on you!

    9- Event Tickets

    event tickets-01

    This NFT utility may be the answer to every music artist’s fan prayers. What it does is utilize token-gated NFT technology to help NFT holders of a particular collection gain exclusive access to the musician’s events. This way no one takes advantage of a fan’s love and their will to pay a kidney to attend a concert!

    For example, Avenge Sevenfold utilized this smart technology with Ticketmaster to give tickets to their Deathbats NFT holder fans.

    10- Membership Access

    Membership Access

    A membership access utility can be seen in two ways. Either an NFT membership part of a loyalty program or as a membership pass to a special NFT analytic tool or Discord group.

    For example, to have all-encompassing access to the full tool range in NFTinit, you must be a holder of their NFTs. Same thing goes to the top NFT tools out there.

    The Future of NFT Utility 

    The main goal of the NFT utility is to bring holders value. That’s why NFT project creators go out of their way to do airdrops , events, merchandise , mint passes , access to specific events, and more. However, this may all be a little too late because NFTs hype is dying in 2023. This is why the future of NFT utility must go beyond the JPG. Read all about it here.


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