Non-fungible tokens are usually linked with JPEG images; however, their actual applications in the real-world are expanding.
In 2021, when inclination towards digital collectibles surged, maximum focus shifted to PFP NFTs, the NFTs that are utilized on social media as profile pictures or avatars. It took no time for PFP projects to rule Twitter as well as markets such as OpenSea. In recent months, other NFTs like generative art have also garnered immense fame.
For collectors, NFT projects based on art are extremely popular with more and more creators accumulating rewards and real experiences into their digital collectibles. ‘Utility’ is the name given to such a concept and offers the digital asset a value that’s way more than just being considered a collectible.
Utility NFTs provide considerable opportunities for both creators and brands to outgrow the applications for non-fungible tokens no matter the add-on value is a website or event’s membership or a physical product.
Integrating utility into non-fungible tokens
Digital collectibles’ concept amplifies via utility NFTs upon offering real rewards and benefits associated with ownership. NFTs are not only collectible artwork since it is possible to deploy them for various types of real applications, be it functioning as a ticket for a concert or offering long-term membership of any particular thing to an owner.
Talking about leading projects such as Doodles and Bored Ape Yacht Club, they were released as PFP network and started adding utility for owners with time. Some utilities include unique access to meetups or parties. Then there are projects such as Coachella Collectibles that have incorporated utility right from their inception; thereby, providing owners a forever pass to the music festival besides various other perks such as real products and exclusive on-site experiences.
When utility function as access to locations & events
There have been real utility non-fungible tokens that have served as access to exclusive platforms. Access to unique Discord channels is among the most ordinary access features that’s offered by utility NFTs.
Constant evolvement of utility NFTs have opened up new ways to give owners digital access to platforms and events.
Let’s take an example to understand it better. Americana, an online market for admirers of luxury goods, requires users to prove their membership via a Something Token, their native NFT.
Moving onto another example, token gating app and platform, Token Proof, enables users to confirm their NFTs ownership and get access to real events without requiring to link their crypto wallet.
Another function of utility NFTs is serving as membership cards for unique restaurants and clubs. NFT social clubs provide long-term options for those owners of NFTs who look forward to meeting with the community and partnering in the very space. Earlier in 2022, Poolsuite, an internal collective, released Manor DAO with a goal of giving token-gated access to Poolsuite Manor, a property they intend to buy.
Gary Vaynerchuk has also announced the launch of the Flyfish Club, a New York based seafood restaurant. Only NFT owners will have access to it.
Connection of NFTs with real items
Certain NFT projects are connecting real and digital rewards to the ownership of NFT. Take for example, PROOF collective, the members-only NFT community utilizes non-fungible tokens to offer a number of advantages to owners. Access to forthcoming NFT drops of PROOF such as the Moonbirds PFP project is one such benefit.
Utility NFTs have been deployed by Web2 and Web3 brands too to reward their owners with real goods. For instance, Adidas recently created a line for crypto-based apparel especially for owners of ‘Into the Metaverse’ community. Also, RTFKT, Nike’s virtual fashion brand, enabled CloneX collections owners to forge digital tokens owned by them into physical products.
Clearly, uses of utility NFTs will expand, which is why various types of industries can use them to offer owners whatever they want, be it discounts or access-cards.