NFT Use Cases: What’s Next?
Could 2023 be the ultimate year for NFTs? The names of celebrated personalities hopping onto the NFT craze, whether to collect, hawk, or promote collections keep expanding by the hour. Eminem, Paris Hilton, Mark Cuban, Lil Nas X, and Rob Gronkowski are just to mention a few names that have been making headlines in the NFT space.
Art and collectible NFTs are now mainstream, as many experts predicted at the beginning of 2022. Besides being fun and intrinsically appealing, art and collectible NFTs that we have seen so far are culturally relevant, with a lower learning curve for the uninitiated. For avid collectors, digital representations of their rare art make it easy to move or authenticate collections. Also, NFTs promote autonomous social communities that share the same beliefs, interests, and identity.
In other words, the concept has proven to have a high potential in solving real-world problems. But what’s next? Which use cases have gone beyond the speculation stage and will make headlines going forward? While the possibilities are limitless, here are the use cases to watch out for.
NFTs in Gaming
NFT-powered games like Axie Infinity attract as many as 2 million active users, a trend that has driven the platform’s valuation to peak at $3 billion. Contrary to the opinion of the naysayers, NFT gaming is about to blow, and Axie Infinity is just the beginning. The only reason why art and collectibles are doing better than gaming is that the latter involves a relatively long development cycle. Moreover, gaming targets a particular demographic.
Fashion and Wearable NFTs
Consumers have shown that they can equally splurge on digital fashion and collectibles, just like they do with physical merchandise. For instance, Dolce & Gabbana recently sold its debut 9-piece Collezione Genesi NFT collection for $5.6 million. However, the set featured both digital collectibles and physical women’s apparel.
Wearable collectibles are just the beginning of NFTs in the fashion industry. From now on, NFTs will help users optimize investment or monetization opportunities in fashion. For instance, they can be used to raise capital or automate redundant processes like taking inventory before sales.
DeFi NFTs
NFTs are influencing a new asset class that can be leveraged as collateral in DeFi protocols to acquire a loan. Think of it this way. A user with a newly minted NFT skin can enter a protocol, collateralize the item and get a loan. The user then gets the NFT skin back after repaying the loan. Everything happens automatically in smart contracts.
Another potential use case is renting. Instead of using the NFT skin as collateral to get a loan, the user can rent it to another gamer and make a passive income. The beauty of NFTs is that they foster true ownership — you get to monetize your virtual asset however you deem fit.
NFTs for Events and Ticketing
NFT tickets have been around for a while. Their immutability makes them ideal for access control to concerts, given that they can’t be forged or duplicated. In 2023 and beyond, NFT tickets will likely expand their use cases to enhance user experience. Besides granting access, NFT tickets can serve as events memorabilia, a tool for paying all event stakeholders, or redeemable vouchers for treats and snacks inside the event.
The Metaverse and Virtual Land Parcels
Projects like Decentraland have demonstrated in the past months that investors can make significant gains from digital real estate in the Metaverse. Some users have already acquired virtual land parcels. Development will start taking place in these parcels, creating sustainable infrastructures for powering various business functions like meetings and conferences. For instance, someone can build a complex that features a board room, gym, sauna, or even outdoor arena and rent it to businesses that want to hold virtual meetings.
Digital Identity
Utility NFTs have been sparking debates around self-sovereign identity (SSID) for a while now. This concept is intriguing because its goal isn’t to foster high-value collectibles. Rather, they allow users to link their digital information (everything on Twitter, Facebook, or any other platform) in a blockchain, just like the Ethereum Name Service (ENS). Since ENS is decentralized, the underlying user truly owns the digital identity. This concept can be used to authenticate a user’s info, such as academic qualification or nationality.
Music
The music industry is long due for disruption. And by how things are moving, NFTs may change how we consume music and interact with artists. Soon, artists will start releasing NFT-themed albums, where a single collection can feature the soundtrack, music video, and lyric sheet. Putting all these things together enhances the end user’s experience. Moreover, artists can dictate how much they want to earn in royalty commissions without the interference of middlemen.
NFTs Will Enhance the Digitization of Everything
It’s no longer a matter of whether NFTs will be big — it’s when. Non-fungible tokens can be used as a digital representation for anything physical that has value. It’s just a matter of time before consumers start asking for digital companions for every physical item that they buy. In the meantime, these use cases will hold the fort as we get there. In the meantime, you can already capture your creativity in the blockchain and create your own NFT on 1Mil. Follow our socials and stay in touch.