NFTs have erupted in our collective consciousness during the last two to three years. It's virtually a status symbol to own one. This curiosity, according to many who believe in NFT and the blockchain in general, is a portent of big things to come. Others, however, see NFTs as a fad, similar to the dot-com boom, the tulip craze, or Beanie Babies.
People who believe NFTs are a bubble frequently back up their claims by citing their lack of value. They contend that NFTs are nothing more than fascinating photos or primitive drawings that may be saved on any browser phone.
As more businesses discover new methods to incorporate NFTs into their business models, the worldwide market is predicted to develop at a CAGR of 33.7% over the next several years, eventually reaching a market worth $232 billion by 2030. For a technology that is still in its infancy, this is rather astounding.
However, this is only true if you are just familiar with the most common NFT applications. Digital art and gaming are two of the most common use cases. They might also be utilized for a variety of things in the metaverse. But those aren’t the only application for NFTs. Before we get into the use cases, let's first review NFT.
NFT - In A Nutshell
NFT stands for Non-Fungible Token. It is a non-divisible cryptography (digital asset) produced on Blockchain. NFT has unique identifying codes that distinguish one from the other. NFTs, like other cryptos and fungible tokens, cannot be traded or swapped. NFTs are primarily used to secure ownership of real-world or digital assets in the form of NFT tokens that cannot be reproduced.
When NFTs joined the digital world, they effectively generated high ROI and established themselves as a promising feature in every sector in which they were involved.
In this article, we will discuss the successful use cases where the adoption of NFTs provides significant value to producers and consumers.
Top 7 potential use cases of NFT
Usecase 1: Digital Art NFT
Knowing that digital files are simple to replicate, an artist can create an NFT that represents a work of art, providing the consumer with adequate proof that the NFT-based art file is the best one currently available. Blockchain's immutability makes it feasible for a digital record to have this level of rarity and uniqueness. Additionally, because royalties may be built into the NFT smart contract, providing a percentage of the sale back to the original artist, NFTs allow artists to receive a cut on the secondary sale of their virtual artwork. Celebrities like Snoop Dogg, Lindsay Lohan, and John Cleese were among the first to sell digital art.
NFT sales increased by more than $2 billion (£1.47 billion) in the first half of 2021. This trend encouraged Christie's and Sotheby's to hold their own NFT auctions, resulting in an all-time high in modern artwork income. However, only a small portion of the earnings from art NFTs have gone to galleries, whereas auction houses have generally taken a bigger proportion of the artwork market profits.
Examples:
Open Marketplaces: Rarible, LooksRare, OpenSea, Makersplace
Traditional Auction House: Christie’s Encrypted Sotheby’s Metaverse
Curated Marketplaces: KO, Foundation, Nifty Gateway, Super Rare, CoinbaseNFT
NFT Gallery: Showtime, jpg. space
Usecase 2: NFT Collectible
NFT collectibles are also one of the NFT's most significant applications. Many platforms or artists provide NFT collectibles, which may be the most sought-after and valuable.
Pancake bunnies, Binance anniversary NFT, and NBA best shot NFT collectibles are among the most popular digital collectibles in the business.
In most circumstances, the NFT may function as both a digital artwork and a collectible. Crypto kittens were among the earliest NFT digital collectibles. Crypto kittens are usually collected because of their distinctive hair and eye colors.
Examples:
The newest widespread use case is to coin Tweets in NFT and sell them as NFT collectibles.
Jack Dorsey's initial tweets were just minted into NFTs with his autograph.
Usecase 3: Trade Finance NFTs
Many people believe that NFT only plays a significant part in music, visuals, and collecting things. However, in the DeFi ecosystems, NFTs provide distinct financial benefits.
To acquire a better understanding, users can stake one or more pairs of NFTs in a liquidity pool and gain NFTs that can be utilized to participate in or enter the next pool. Once the NFT has been utilized to participate in the new pool, it will be destroyed.
NFTs can also be utilized to decipher supply chain issues. The conversion of payment contracts into NFTs, a payment-guaranteed financial mechanism based on smart contracts, will be welcomed by both major corporations and SMEs(Small and Medium Enterprises).
Examples:
Tradeteq- a trade finance distribution company — carried out one of the world's first comprehensive, end-to-end, on-chain tokenized invoice finance transactions leveraging the XDC network.
Usecase 4: Gaming NFTs
NFTs may be utilized to create non-duplicable in-game items, giving gamers unparalleled ownership. “Play-to-earn” games frequently demand users to purchase products using cryptocurrencies in order to play the game and accumulate unique in-game stuff. Depending on demand, these things may then grow in value and be sold to other players. It is customary for players to have influence and vote on the game’s development since their monetary investments in it boost the game’s total worth.
Examples:
Games: Illuvium, Zed.Run, Sorare, Axie Infinity, Neptokyo, Cryptomanga
Game Items: The Workshop, Treasure DAO, Loot
Virtual Land: Sandbox, Decentraland
Usecase 5: Music & Entertainment NFTs
NFTs promote meaningful interaction between fans and artists, allow supporters to demonstrate their dedication, and ensure that the artists may offer unique experiences like one-on-one live broadcasts or exclusive events. The crucial thing here is that artists find a way to enhance their bonds with their followers. Among the other advantages, fans are prepared to invest in NFT independent artists since all funds go directly to the creators. Unlike the conventional music environment, where ticket purchases benefit venues, publishers, and record companies, NFTs provide new ways to directly support beloved artists and help them remain independent.
NFTs may offer additional perks to followers of specific artists. For example, Artists provide NFT owners with unique discounts, events, and VIP section seats.
The NFT was the first technology to create autographs. Fans may now purchase a one-of-a-kind work of art produced by a band or artist like Taylor Swift or Camila Cabello. While paper signatures might fade over time, leaving you with nothing, your NFT will never fade, and it is something you can pass down to your children to share your greatest musical moments.
Examples:
Autograph.io
Royal.io
Usecase 6: Real-world Asset NFTs
NFTs are largely used in the arts, music, and gaming sectors. The real-world asset NFT is getting less attention. Nonetheless, it provides possible use cases for asset trading in the future.
We can turn the paper works of real-life tangible goods, objects, land, or properties into NFTs by minting them. This will be one of the most secure ways to secure ownership in any scenario.
If a person obtains an exclusive edition or first copy of a book, watch, or anything else, it may be transformed into a digital asset by minting the paper works and gaining digital ownership of the item. The NFT ownership may be used to claim ownership or data regarding ownership transfers digitally and in a more secure manner.
Example:
In the case of Real estate NFT, Michael Arrington's Kyiv apartment was sold in the world's first NFT Real Estate Auction!
Usecase 7: Luxury Goods & Fashion NFTs
Digital fashion has become a reality. Despite the fact that conventional fashion is far more beneficial to society, luxury fashion designers are venturing into the exclusive realm of NFTs and cryptocurrencies. NFTs enable premium businesses to provide customers with unique, one-of-a-kind experiences, hence increasing brand identification, engagement, and revenue. NFT is primarily a way for fashion businesses to engage with the next generation of customers, generation Z. Burberry and Louis Vuitton were among the first companies to enter the gaming NFT area, indicating that the fashion industry's digital development can extend endlessly.
NFTs offer a unique avenue for firms like Rebecca Minkoff to experiment with avatars, increase brand interaction with a younger demographic, and commit to charities relevant to the company, such as The Female Founder Collective.
Nikeland has debuted on the Roblox platform, where users can try on a variety of high-end Nike goods and play activities. Nike submitted seven trademark applications connected to the metaverse in February 2022, signaling its desire to produce and sell branded virtual shoes and clothes.
Examples:
Nike/RTFKT
Dematerialized
Final verdict
In the future, the NFT may gain new industries and next-generation use cases. We are currently only seeing the younger form of NFTs. The NFT might be the future when it covers every business with its incredible capabilities that operate with immutable blockchain technology.
Many sectors are collaborating with NFTs to start and digitalize their services in the virtual world. It may be the appropriate moment for businesses or entrepreneurs to launch their own NFT platforms and services by collaborating with an NFT marketplace development company like Clarisco, which can provide futuristic NFT-related development services.
