The NFT market continues to evolve and scale. And if in 2020, in the generally accepted sense, these were just digital pictures on the blockchain, which for some reason were sometimes sold for fabulous sums, now it is a full-fledged ecosystem. It includes various types of NFTs, each of which has its own purpose and application features. In this overview, we will look at the main types so that you can fully navigate them and make the right far-sighted decisions when investing in NFTs.
What NFT types are there?
So, the most popular NFT types in terms of their purpose and use are:
- One-of-One (1/1),
- PFP (avatar),
- Domain Name,
- Virtual Worlds,
- Trading Cards.
Each type has different subspecies. And in the future, this list will expand in any way, both quantitatively and qualitatively, because the market does not stand still.
One-of-One (1/1) NFT type
NFT One-of-One (1/1) is a unique, one-of-a-kind digital collectible. This art form is unique and cannot be repeated. Tokens of this type have genuine rarity, as they are released in a single copy and are not included in collections. This rarity makes 1:1 NFTs more desirable and more expensive, especially those made by large creators. Therefore, such tokens are often put up by well-known auction houses and are equated with traditional physical art.
This type is used by most independent artists who use blockchain technology as a new step in their already established work (for example, Trevor Jones, Refic Anadol, BossLogic, Archan Nair), or these are digital artists who have gained recognition precisely thanks to the NFT scene (notable examples are XCOPY, Coldie, SeerLight).
PFP (avatar) NFT type
PFP (profile picture) is a type that is the personification and portrait of a user on the Internet. In addition, PFPs have several other uses:
- It is an indicator of social status.
- This is an indicator of membership in a community.
- This is an advertisement and one of the ways to promote the project through famous people and influencers who use PFPs as their profile picture.
Most of the top collections are PFPs, but they also combine various other uses (usually the Utility type).
Some of the most striking examples of PFP type:
Utility NFT type
Utility NFTs are tokens that have real use cases that go beyond mere collectibles. That is, they provide users with various unique privileges, rewards, access, exclusive opportunities.
At the moment, most projects create NFTs from a utility, since by acquiring any asset, the owner is looking for benefits not only purely financial or speculative. In this case, utility and applicability is the heart of the asset and its key benefit.
There are many variations of using this type, and with the development of the market, this list will only expand. But here are the most used use cases:
- As a ticket to events, meetings.
- Access to exclusive instruments.
- Early access to new projects.
- Airdrops for owners of genesis collections.
- Use as a user passport on the blockchain.
- Proof of completing quests.
- Game NFTs (unique hero or attribute in the game).
- Access to and voting rights in the DAO.
- Token as a way to legitimize ownership in real life.
- Virtual lands.
- Utility NFTs can have unique metadata written into a smart contract (ie NFTs can be used as proof of liquidity).
Domain Name NFT type
NFT Domain Names are a type that assigns a name to an address, for example “name.eth”, “name.bnb”. The idea lies in the uniqueness of the address, creativity and easy memorization. The user can come up with his own name and mint it in the form of NFT, and then make it the main one by linking it to the address, paying a small commission. Domain Name is also a unique way for offline brands to enter the Web3 world, which is why there is a trend now to buy up and register short domain names with the same name for various brands.
The most well-known domain name registration service is ENS (Ethereum Name Service), whose trading volume has exceeded 75k ETH (more than $145 million at the moment), and more than 2.77 million domain names have already been registered.
Collectibles NFT type
Collectibles NFTs are digital assets that allow users to own unique pieces of virtual art that are combined into collections. This type of token is not primarily a work of art. That is, collectibles were created to be used and are usually attached to or are the center of any project, even if the creators have worked extensively on the visual component. Thus, the authors of the project, through ownership, create a strong community, and its size depends entirely on the number of assets within the collection itself. The most common option in terms of mint distribution is 10,000 pieces.
Almost all projects are collectibles NFTs, and here are some notable examples:
Photography NFT type
Photography NFT is a type that allows you to view and buy a photo along with the rights of the copyright holder in one click. At the same time, this is a new way for photographers to earn money, as well as to declare themselves as a professional in this field. Blockchain technology has thus solved one of the main problems of all artists – the loss of control over copyright.
Vivid examples of photographers who are known in the NFT market:
Gaming NFT type
Gaming NFTs are a type that have a clear purpose in the Web 3.0 gaming industry. Mostly, tokens are in-game items, characters, skins, settings, maps, modes, tickets, character collectibles, or any attributes in games on the blockchain. Initially, the pioneers of such games were card games – for example, Gods Unchained on the Ethereum network. And today it is still developing, but already a full-fledged segment of the market that generates hundreds of millions of dollars.
Notable examples of this segment are:
Membership NFT type
Membership NFT is a type of Utility NFT, a kind of membership card on the blockchain that grants access to:
- Exclusive events,
- Virtual event,
- Closed channel/group,
- Whitelists for future drops,
- Any other experience or utility.
Most often, this type can be intertwined with other types. And in general, this is a multifunctional opportunity for:
- Projects and brands of any size in terms of selling their product,
- Holders who can use their NFTs as access to these products.
On the market, some of the most famous representatives of this segment are:
Sport NFT type
With the help of Sport NFTs, it became possible to transfer the excitement of any offline game to the digital world, making it accessible to everyone. Typically, these digital assets are used to represent a particular moment, player or team that has made a significant contribution to the development of the sports community.
That is, sports NFTs act as a kind of immortalization of a player or team on the blockchain, a significant sporting event or a moment in the game that everyone will remember.
To scale this segment, specialized trading platforms were created, and the most popular are:
- NBA Top Shot,
Music NFT type
Music NFTs are digital assets that allow musicians, producers, and even fans to monetize music using blockchain technology. In fact, this is a new way for a musician to popularize his work without political, contractual, contractual and other frameworks that often limit the spread of creativity. It is also a way to avoid the commission of song distribution services, such as Spotify, Apple Music, etc. To date, the most famous musicians who successfully tokenize their work are:
Virtual Worlds NFT type
Virtual Worlds NFT type are digital assets representing the ownership of real estate, goods and avatars in various virtual worlds. And since metaverses (such as Otherside, The SandBox, Decentraland) are gaining more and more popularity and attracting more and more public attention, the prospects of this segment of digital assets are steadily growing.
And this is explained by many possibilities:
- Provision of services and sale of goods,
- Lease of land for the needs of tenants,
- Various kinds of advertising,
- Opening of virtual representations for offline brands,
- Holding various events
- Additional privileges for holders of various projects,
- Gaming experience,
- Own tokenomics and the possibility of various earnings for participants,
- An indicator of social status.
As you understand, this list, along with the growth of the market, will only grow.
Trading Cards NFT type
Most collectible collections can be classified as Trading Card NFTs, which have also been used in many ways. A proportion of offline brands currently use this type of token as a way to promote their products or services by offering them as rewards or incentives to their customers.
These tokens can be anything from sports memorabilia to rare pieces of art, and can be bought, sold, and traded just like physical trading cards.
The brightest case thundered quite recently: former President of America Donald Trump released the first series of Trump Cards NFTs of 45,000 pieces with his own image, and later released Digital Trading Cards Series 2 of 47,000 pieces. Despite the criticism, both collections attracted huge public attention, thus providing explosive multi-million-dollar sales.