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Oxalus Insights

All About Utility NFTs: Use Case & Applications 2022

Guides Nov 26 2022
All About Utility NFTs

The trend of non-fungible tokens captured the attention of the tech community from 2021 to 2022. NFT applications are gradually becoming more complex, instead of just simple avatar pictures. Many experts are wondering whether utility NFTs can provide the next massive leap forward in the NFT environment.

In this article, we will provide sufficient information so that you can clearly understand the definition of NFT utility and its typical representatives.

What Exactly Are Utility NFTs?

The most basic definition of a utility NFT would be non-fungible tokens having applications other than the representation of unique digital assets. They, like any other NFT, are typically built with smart contracts and are unique. They also have the same immutability, transparency, and security features. The primary focus of utility NFTs, however, is not their collectibility, but rather the real-world functions, rewards, or benefits they provide NFT holders.

Imagine you’ve arranged a performance with around 800 available seats. Now, NFT utility may be applied for issuing 800 NFTs rather than 800 paper tickets. Each NFT would be unique and provide the same utility of event entry.

How Do Utility NFTs Work?

Utility NFTs operate in the same way as other NFTs in terms of technology. They are cryptographically represented and unique digital assets on the blockchain. Because blockchain technology is immutable and transparent, NFT owners may easily demonstrate that an NFT is held in their wallet and no one else’s. One of the first utilities of NFTs is the gateways to access platforms. Access to special Discord channels is one of the most popular digital access options supplied by utility NFTs.

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Applications of Utility NFTs

Gaming

The gaming industry is the front-runner for understanding how to add utilities to an NFT. Whether it’s the metaverse or play-to-earn games, NFT applications flow naturally into the gaming world in a way that can’t be more reasonable. Gaming NFTs, such as play-to-earn NFTs, offers a new method to take ownership of in-game assets and collectibles. The Axie Infinity game is one of the greatest representations of gaming NFTs.

Fashion & Art

The potential of NFT utility might help in the development of virtual fashion shows as well as special shopping experiences. The utility of non-fungible currencies in the fashion sector is getting started with virtual fashion for avatars in games. Thanks to augmented reality (AR), users may be able to try on virtual outfits in the fashion metaverse. Furthermore, unlike traditional NFTs in which the token is the artwork itself, a tangible art piece may be given as proof of purchase, allowing art collectors to organize and display their expensive collection in real life.

Virtual Real Estate

The popularity of virtual worlds has also increased the demand for virtual real estate. Many metaverse projects have introduced the idea of virtual real estate, with various applications. One of the most prominent NFT utility concepts is virtual real estate, which may enable a variety of use cases such as advertising and hosting new experiences in virtual worlds. Moreover, NFT can be applied in the real world to represent physical properties using land deed data.

Social Network

Utility applications in the NFT would also aid in ensuring safe access to exclusive communities and social spaces. Access NFTs are a new type of NFT utility token that might provide real-time access to communities and content in both the virtual and actual worlds. One of the best examples of an NFT collection with a utility token is the Bored Ape Yacht Club: NFT holders can have the right to access an elite yacht club.

Top NFTs with Utility

Origins by Alan Walker

This NFT collection includes three special music videos from Alan Walker’s Origins album. Fans may collect all of the various NFT music video pieces from the collection to put together the entire music video, and all NFT holders can share a part of the revenue from the music video streaming on YouTube.

Mystery by Franck Muller

This Mystery Box Collection includes 28 NFT designs with different rarities. NFT holders have the opportunity to win NFT watches in the metaverse, actual Franck Muller timepieces, invitations to exclusive Franck Muller events in Dubai, Miami, and Singapore, and a private trip to Watchland, the Franck Muller factory in Geneva.

The Muhammad Ali Experience Mystery Box

This Mystery Box Collection includes six videos of NFTs with different rarities. Each video NFT will unlock a different bonus depending on its rarity, such as a Membership Access Card to upcoming events or digital Muhammad Ali artworks.

VeeFriends

The VeeFriends NFT is a collection launched by Gary Vaynerchuk. The NFT collection is useful since holders may use them as tickets to the VeeCon conference. VeeFriends also offers various benefits, such as Gary’s coaching sessions.

GainForest

It is a Swiss-based international non-profit focusing on the use of blockchain technology to protect rainforests. Supporters of GainForest can obtain NFTs that reflect genuine forest places. The NFTs might assist owners in measuring forest health and minting governance tokens.

Final Thoughts

Utility NFT development is still in its early phases and will take a long time to mature into a major player in change. The concept of utility NFT also demonstrates the fact that NFTs are more than just beautiful art and collectibles. As utility non-fungible tokens discover more use cases, we will see the new booming of NFT in the future of the crypto market.

Frequently Asked Questions

1. What isn’t NFT utility?

Utility NFTs are digital assets that provide benefits beyond their valuation, such as exclusive membership or access to premium content. If an NFT is simply a digital picture, it will not be considered an NFT utility.

2. What NFT has the best utility?

There are different types of NFT utilities, each with unique features. So it’s hard to say which NFT utility is the best because it depends on each user’s taste.

3. How can a standard NFT become a utility NFT?

There are many ways to add utility to an NFT, the important thing is what potential applications the NFT itself has and how valuable it is to users.

4. What are the advantages of utility NFTs?

For creators, they can more easily manage or provide facilities to their community without spending too much effort, for example issuing event tickets. 

For holders, it can show the value of their collection or their support for their idols. It also gives them access to exclusive events or a chance to receive rewards that are worth the value of their NFT.


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