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!
When NFTs first started, it was all about scarcity and uniqueness. Scarcity, on its own, created a huge chain of demand and supply for non-fungibles. But, is that the only appeal that non-fungible tokens could offer? No. Nor could it maintain that level of hype and demand alone.
Nowadays, people don’t buy NFTs just for art. No. In fact, most people buy into the non-fungible world for the benefits that come with it. This could be anything from exclusive memberships or access, whitelists, and more!
Keep reading to find out more about NFT utility and how it can benefit YOU!
NFT UTILITY
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!
Definition
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.
EXAMPLE
To make things even more clear, we’re going to give you an IRL example of NFT utility.
So, 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!
A utility could be a physical piece of art that matches the NFT you invested in. Or, it could be exclusive access to certain events or in-person memberships! And, it could also include rewards in NFT games as well. 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. Also, they are basically the same as an NFT. So, it is a non-fungible token on the same blockchain.
How Do They 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 3 Types of NFT Utility
1) Exclusive Access
So, one of the most popular types of NFT utility projects is ones that offer exclusive access. Therefore, when you invest in a collection that offers exclusive access, you get physical access to IRL events. This could be like the Doodles parties or Karafuru carnival.
Also, exclusive access could mean special discounts for limited-edition products and merch. They can also give you spots on future whitelist projects. And, maybe even get to be a part of future early drops!
2) Airdrops
Next, we’ve got NFT airdrops – aka free NFTs! This NFT utility offer is probably the most exciting of them all because you get non-fungible gifts. Project creators send out NFTs or cryptocurrency for more hype.
This is mostly a promotional strategy to encourage people to join their community. Also, it helps to bring attention to the brand itself. 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!
3) Gaming Utility
Finally, another common NFT utility is gaming utility where gamers can gain skins, materials, and weapons. There are called play-to-earn (P2E) games or metaverse games. Some collections that have their own games could offer you certain perks upon joining their community. Maybe in-game assets and other collectibles.
Also, other collections allow you to use the NFT within the game where airdrops would definitely be appreciated. These types of utilities will definitely appeal mostly to the gamers of the industry.
Coolest NFT Utility Projects
1) VeeFriends
Gary Vee offered the holders of his NFT collection tickets to the VeeCon conference via airdrop NFT tickets! So, the VeeFriends non-fungible token acts as a ticket to this conference!
VeeCon is a yearly super conference that takes place on multiple days. It hosts a variety of celebrity speakers and big NFT enthusiasts. Some of them include Beeple, Steve Aoki, and even Snoop Dogg! And, owning a VeeFriends NFT gives you three-year access to this epic annual conference!
2) World of Women
And, then there’s the World of Women NFT utility where all their holders got access to certain benefits. These benefits included ownership of the artwork they buy and also invitations to real-life events.
3) Crypto Baristas
The all-encompassing caffeine experience offered NFT holders discounts to all their future cafe locations. Also, they got discounts for their online store and all of their merch!
4) Bored Ape Yacht Club
Finally, there’s Bored Ape Yacht Club NFT utility that included a good amount of benefits! First, holders of BAYC NFTs have commercial usage rights of their apes and can do whatever they want. This includes creating merch and selling them. They get exclusive access to merch, airdrops, votes on project decisions, and members-only perks!
So, although the concept of NFT utility is still pretty much on the shore, there’s so much more to it. With ongoing innovation in NFT technology, we can see a lot more creative utilities to come. Therefore, make sure you stick around for more on NFTs!