Most people conceive of non-fungible tokens (NFTs) as having value because they are unique – thus the term "non-fungible." They are indivisible and non-replicable as one-of-a-kind digital representations of art, to which individuals may assign a monetary value.
However, there is a rising movement to make NFTs usable in a variety of ways. This trend toward additional usefulness introduces a new kind of value proposition for NFTs, in addition to scarcity and collectability.
NFT staking or farming is one of the newest notions. This refers to staking NFTs to a protocol to earn a return. It provides passive yield-generating utility to NFTs and may be seen as decentralized finance (Defi) that meets NFTs.
Despite the fast growth of non-fungible tokens (NFTs) over the last year, creators need to be one step ahead of the market to succeed in 2022.
There's a large untapped NFT market that needs to extend beyond the digital collectibles strategy to incorporate more usefulness into NFTs at every level and, eventually, produce more value for fans and partners.
We've witnessed a significant movement in the industry over the past few months, moving away from the initial "NFT 1.0" idea, which envisioned NFTs as a digital version of licensed items, giving customers a means to express their support for a brand or assert their ownership of a limited edition.
The NFT space today is known for flamboyant purchases, such as
The NFT doubles as a lifetime season ticket to
The Bored Ape Yacht Club (BAYC) pioneered a unique method of making community members their key value proposition, with the NFT just acting as a badge of access into an exciting society with exclusive advantages.
Many firms have flooded the NFT market in an attempt to replicate BAYC's method after realizing that community is also a kind of usefulness and value. The outcomes have been unpredictable: game changers for some projects, disasters for others, and no clear formula for recurring success.
Exclusivity creates the desire to be within the velvet rope, but if you are too exclusive without concrete benefits for membership, many fans will not see the value, and the anticipated crush of interest will not occur.
There is a significant opportunity to expand on the BAYC framework in areas that many firms seem to have neglected. While well-designed original IP will always find an audience, there is also a lot of value in collaborating with world-class companies and performers that already have a highly engaged fan following.
As long as the collection itself is something that fans would view as true to the brand and their fandom, this reduces the risks and expenses involved with attempting to generate enthusiasm around an unknown property.
If the underlying brand has a strong element of worldbuilding and continuity (like The Sandbox for example), NFTs that provide owners with untold canonical episodes featuring characters, places, and events from the tale universe go directly to the core of the products' attraction.
As an industry, we should consider methods to enable fans to utilize NFTs to construct their own in-world experiences or to expand on the IP as digital, tokenized fanfiction. NFTs may give access to VIP-tier goodies with considerable IRL value for properties that employ real-world events to excite followers, such as panels at Comic-Con, celebrity meet-and-greets, or pop-up experiences.
In terms of the metaverse, whatever form it takes, claiming territory in a virtual environment or constructing a digital fan-cave to flaunt your treasures will not get you very far. Fans will want to share their community memberships, experiences, and stories in a commonplace. By connecting those experiences to NFTs, fans will have additional reasons to acquire, own, trade, and assemble complete sets that will increase in value over time.
In closing…
Blockchain-verified, non-fungible tokens have long promised to go beyond the realm of art and play a larger role in the crypto ecosystem. Some claim that they have the potential to be more useful than their fungible cousins.
Similarly, the incorporation of NFTs into games is propelling both the gaming and blockchain industries ahead at a rapid pace, challenging the gaming industry's old business structures. As long as NFT providers and partners put the customer experience at the forefront of their strategy, the whole NFT sector seems to have a bright future.