Introduction

Non-fungible tokens (NFTs) have exploded in popularity recently, with sales reaching $25 billion in 2021 alone. But beyond just digital art and collectibles, NFTs can provide real utility and benefits to holders. Here are some of the most interesting NFT utility examples and ideas:

Access

One of the most common utilities of NFTs is to provide access to something, either digital or physical. Some examples:

• Access to exclusive content or communities: Many NFT projects function as membership cards, granting holders access to private discord channels, metaverse spaces, or exclusive content. For example, Bored Ape Yacht Club NFTs give access to an exclusive online club for holders.
• Access to events or physical spaces: NFTs can grant real-world access and privileges like tickets to concerts, parties or events. The OneOf NFT platform sells NFTs that provide meet-and-greets with stars.
• Access to services or products: Brands can offer special perks, discounts or presales to holders of branded NFTs. Adidas Into the Metaverse NFT holders get free shoes and early access to new drops.

Governance

NFTs can represent membership and voting rights in an organization, community or protocol. Holders get a say in governance issues like rules and policies.

• DAO membership: DAOs like Friends with Benefits use NFTs to manage membership and allow members to vote on community decisions.
• Protocol governance: NFTs can represent ownership of governance tokens that allow holders to vote on protocol changes. For example, Uniswap UNI tokens and Maker MKR tokens allow holders to vote on governance issues.

Identity

NFTs can serve as on-chain identifiers, profiles, and representations of identity.

• Profile pictures: On social platforms like Twitter and Discord, users showcase NFT profile pictures to represent their identity and status. Bored Ape Yacht Club and CryptoPunks are among the most popular pfp collections.
• Reputation and status: Collecting certain NFTs can boost social status and reputation. Blue-chip NFTs like CryptoPunks and BAYC serve as social signals and have become highly desired social assets.
• Certifications: NFTs can represent certificates, degrees, or accomplishments that serve as on-chain credentials. For example, University of Nicosia issues diplomas as NFTs on the blockchain.

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Licensing and Rights

NFTs can represent ownership of creative works, patents, and other intellectual property. Holders can license the rights or receive royalties.

• Digital content rights: NFTs can contain the rights and ownership data for digital content like art, music, videos, and more. Platforms like Opensea allow royalties to be baked into NFTs.
• Patent ownership: Patients can be represented and traded via NFTs. PATL is a platform for registering and trading patents via NFTs.
• IP rights: Any form of intellectual property like trademarks and copyright can be represented by NFTs. For example, Muse.Place allows creators to mint their design files and retain commercial usage rights.

Experiences

NFTs can be used as tickets that provide holders with special experiences and utility in games, metaverses and applications.

• In-game assets: Game items like skins, characters, power-ups, and more can be NFTs with provable scarcity and ownership. Games like Axie Infinity and The Sandbox have incorporated NFTs.
• Metaverse parcels: Virtual real estate sold as NFTs can provide owners with benefits and experiences in metaverses. In Decentraland, NFT landholders can monetize experiences.
• Utility in apps: NFTs can unlock special features in applications. For instance, Layer2 uses NFTs to provide access to tools for Web3 development.

Rewards

NFTs can provide their holders with special rewards, including both digital and real-world asset distributions.

• Exclusive drops: Some projects airdrop free NFTs or merch to their NFT holders as an added perk. For example, Cryptoadz gives holders a monthly airdrop of a free NFT.
• Staking rewards: Staking certain NFTs can yield rewards over time, like cryptocurrency payments. On Flow, staking CryptoPunks NFTs earns FLOW token rewards.
• Discounts: As mentioned above, branded NFTs can come with discounts on physical or digital products and services. Holding a McDonald’s NFT gave access to discounts on food.
• Real-world asset claims: Some NFTs allow holders to claim real-world assets like land, condos, or even theme park rides. For instance, Flareland mints NFTs tied to real land parcels in Florida.

Other Utility Examples

Here are a few other examples of creative NFT utilities that are emerging:

• NFTs as collateral for loans – platforms like NFTfi allow using NFTs as collateral
• Dynamic NFTs that evolve over time – Cryptopunks get additional accessories based on how long they’re held
• NFT tickets that can be traded on secondary markets – YellowHeart uses NFT ticket stubs
• NFTs triggered by real-world events – Senseis generate new NFTs for holders during major tennis tournaments
• Geolocation-gated NFTs – only viewable in certain locations or venues
• NFTs as keys to unlock AR experiences – via geolocation or image recognition

Ideas for Brands and Businesses

For brands and businesses, some NFT utility ideas to consider include:

• Loyalty and rewards programs
• Early access to products and experiences
• Discounts and special offers
• Sweepstakes and contests
• Digital collectibles and merch
• Virtual events and meet-and-greets
• Gaming integrations and virtual branded worlds
• Creative marketing campaigns and sponsorships
• IP ownership and rights management

Conclusion – NFT utility examples and ideas

NFT use cases are still evolving rapidly, with new models and utilities emerging constantly. But the core benefits of authentication, ownership, access, rewards, and experiences enabled by NFTs open up unlimited possibilities. Brands can get creative in leveraging NFT utility to engage communities and add value. As adoption spreads, expect NFT utility to expand even further across many industries and applications.

References

• https://decrypt.co/resources/non-fungible-tokens-nfts-explained-guide-learn-blockchain
• https://blog.chain.link/44-ways-to-enhance-your-nft-utility/
• https://medium.com/lansaar/7-benefits-of-non-fungible-tokens-nfts-for-businesses-and-consumers-a4b8e8431a4e