The market of non-fungible tokens is rapidly developing not only quantitatively, but also qualitatively. More than just aesthetics and visual appeal is required for NFTs to be considered not just as a collectible, but as a financially independent investment asset. That is why most projects today are developing towards Utility NFTs, giving all holders various privileges and the applicability of their NFT assets. This aspect, by the way, is one of the main ones when choosing and analyzing the investment attractiveness of an NFT project.
What is Utility NFT?
Utility NFTs are type of tokens that have a specific use and utility. For example, NFT Domain names belong to this type – they can be applied by binding to an address and send tokens by their name, identify yourself in Web 3.0.
Also, Utility NFTs are tokens that have real use cases, going beyond mere collectibles. That is, they provide users with various unique privileges, rewards, access, exclusive opportunities.
At the moment, most projects create NFTs with the application, 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.
Main idea and applicability of Utility NFT
The main idea of creating such a Utility NFT is to simplify the proof of user privileges and empowerment from ownership.
There are many options for using this type:
- As a ticket to events, meetings. For example, the organizer of an event/exhibition/concert/conference may not use the classic ticket distribution schemes, sell them, or enter into an agreement with an intermediary platform. And it is enough just to mint a collection in any blockchain and provide access to the acquisition to everyone. Thus, each owner will have a unique and transparent access to the event, the NFT ticket performs all the functions of a regular paper ticket, and the organizer eliminates many organizational difficulties and receives the simplest profit from the event.
- Access to exclusive instruments. For example, in the Creepz by Overlord project, all token holders have access to a P2E game that allows them to earn money.
- Early access to new projects. Often, owners of genesis collections are whitelisted and have early access to the drops of derived collections.
- Airdrops for owners of genesis collections. For example, owners of collections such as Doge Pound and Lazy Lions received tokens of derived collections for free through an airdrop.
- Use as a user passport on the blockchain. For example, NFT Domain names.
- Proof of completing quests. For example, in the CyberBrokers project, completing quests and missions, an assembly of mechs is available, which serve to safely move around the metaverse.
- Game NFTs, which also have their direct application and usefulness. That is, by purchasing a token, the owner receives a unique hero or attribute in the game. In the future, he can, for example, cross 2 such characters and create a third one. Thus, increasing their digital assets. This practice exists in some games, including Axie Infinity.
- Access to and voting rights in the DAO. Many projects today place a lot of emphasis on internal decentralization and active community participation. To do this, a DAO is created, and each owner of the token influences the development of the project and decision-making thanks to his voice in the DAO.
- Token as a way to legitimize ownership in real life. This option is only in its infancy, but it has great potential. Since the smart contract guarantees the transparency and independence of the transaction from any factors.
- Virtual lands. By purchasing token-virtual land in projects such as The SandBox, Decentraland, Otherside, NFT Worlds, you become the full owner of a piece of land with unique resources/size, and the neighborhood and location affect the value and value of your asset no less than in real life. You can use it as you like – opening an online store, your own exhibition, renting out space, advertising your services and goods, doing business, and so on.
- Utility NFTs can have unique metadata that is specified in a smart contract. Thus, NFTs can be used as proof of liquidity. For example, adding liquidity on Uniswap creates an NFT with liquidity amount metadata.
And this is actually far from all the options for using this type of tokens. You can use them for any purpose, as far as your imagination and needs allow you.
In the future, people will stop talking about NFTs as NFTs and start looking at the essence of the technology. Instead of getting hung up on the term, we will ask: “What is the benefit for me of this or that digital object?” So says crypto investor, influencer and creator of the VeeFriends collection Gary Vee.
History of the emergence of Utility NFT
The history of the emergence of Utility NFT is quite simple – since NFTs are on the blockchain, this provided some opportunities, for example, in the form of data storage or as confirmation of some action.
In 2018, investors and creators were interested in the possibility of using NFT, as well as the opportunity to implement new ways to attract users to projects. Then, for the first time, projects began to use NFT as a ticket to events and access to certain privileges. For example, VeeFriends token holders get access to the massive VeeCon conference.
All this made it possible to create the most useful product for the NFT market, the use of which has already been invested in the cost, which was also influenced by the number of NFTs in collections.
Who buys Utility NFT?
Almost every person who is interested in and invests in digital unique assets keeps at least one Utility NFT in his crypto wallet. Recently, such NFTs are a trend, and this is understandable. Comparing 2 similar projects, one of which will have utilities, and the other will not – the choice will be obvious, right?
The first NFT collections were without application, but over time they became Utility. For example, NFT Bored Ape Yacht Club was one of the first to become utilitarian. NFT owners of this collection are eligible to participate in the exclusive annual Ape Fest event.
Best Utility NFT Collections
The best collections of utilitarian NFTs include:
- World of Women.
Doodles is a collection of 1000 NFTs that represent characters designed by Burnt Toast. The project aims to become a global web entertainment company and they have recently stated that Doodles is not an NFT project.
And here are a few words about the project:
- NFT owners have the right to vote on the release of future collections and events.
- DAO Doodles is fully managed by community members.
- 2 offline large-scale events were held, a recording studio was created, own merch is being sold.
- More than 5 airdrops were made for holders of the genesis collection.
- The volume of trading in the secondary markets of the collection is more than 265k ETH.
- Floor price 2.98 ETH.
- The most expensive Doodle #6914 was sold for 296.69 ETH.
VeeFriends is a collection of 10255 NFTs created by celebrity entrepreneur, investor and influencer Gary Vee.
Let’s also talk a little about the benefits of ownership:
- NFT owners can participate in the VeeCon conference,
- Depending on the type of token purchased, they can receive a personalized real gift from Gary Vaynerchuk, spend some time with him, or go bowling with the creator.
- Airdrop derivative collections Mini Drops and Series 2.
- The volume of trades of the collection in the secondary markets is more than 63k ETH.
- Floor price over 3.7 ETH.
- The most expensive NFT Empathy Elephant was sold for 130 ETH.
World of Women
World of Women is a collection of 10,000 NFTs on the Ethereum network. The project aims to educate and support women in Web 3.0 and advocate for equal gender rights around the world.
And here are just some of the benefits if you own this token:
- Full ownership of intellectual property rights (including commercial use),
- Original monthly ArtDrops from selected NFT artists,
- Curated pre-sales and receipts for high potential collections verified by DAWoW.
- Lotteries and discounts for owners only,
- Annual Holders Gala and IRL event, where Madonna herself performed in 2022.
Finally Enough Love…,,,,🏳️🌈💙🏳️🌈💛🌈💙🏳️🌈 Thank you NYC and all who were part of the show!! Happy Pride! ❤️🔥 @worldofwomennft @MACcosmetics @belvederevodka @TheSandboxGame @Linktree_ @madeinnypizza pic.twitter.com/A9zMo5d3Bd
— Madonna (@Madonna) June 24, 2022
And here is what the indicators of the collection itself look like:
- Trading volume on the secondary markets exceeds 80k ETH.
- Floor price over 1.2 ETH.
- The most expensive NFT WoW #706 sold for 210 ETH.
What are the prospects for using Utility NFT?
The prospects for using Utility NFTs are endless. Firstly, already now we see the most active development of existing areas of use. Secondly, in the future, Utility NFTs can be used as medical records or even as a data storage item with public or private access. Or use them as a subscription or insurance, renewing them annually or quarterly.
The use of this type of NFT is only limited by the human imagination. You can use them in almost every segment of the community, in various industries, office work and workflow.
Opinion of NFTmetria
Utility NFTs have limitless application possibilities. They can be involved in all aspects of human life and society and greatly simplify everyday life. This development is hindered only by the legislation of different countries, as well as the imagination of man. But the fact that utilitarian NFTs have been well received by the community cannot be underestimated, as they are some kind of encouragement of a community-oriented ecosystem. Undoubtedly, in the near future, the scope of the human imagination will expand, resulting in more and more applications for NFTs.