What is Redeemable NFT? Opening a New Path for NFT in the Real World
What is Redeemable NFT? A redeemable Non-fungible Token (NFT) is an NFT that represents ownership of a virtual or physical item. Recently, the community has paid a lot of attention to redeemable NFTs. What makes Redeemable NFT so unique? In this article, we will learn about Redeemable NFTs with Beehive Research.
What is Redeemable NFT?
A redeemable NFT is a Non-fungible token (NFT) representing ownership of a virtual or real-world item. People can understand the concept of Redeemable NFT very simply: NFT buyers can exchange it for another asset, such as a virtual item or a real-world item.
In 2022, Olivier Fernandez, Frédéric Le Coidic, and Julien Béranger proposed EIP 5560 to introduce the extension needed to make the NFT redeemable. The founders of Ethereum approved this proposal, which officially became the ERC 5560 standard on Ethereum.
By adding extensions to NFT’s Smart Contract, developers were able to validate NFT’s redeemability. If an NFT is redeemable, the function will display “true” and if it displays “false”, the NFT has been redeemed.
The purpose of redeemable NFT is to bridge the gap between the physical and digital worlds. Using NFT and Smart Contracts, users can purchase tangible goods such as apparel, collectibles, and even event tickets. Additionally, redeemable NFT can be used to redeem rewards, services, and special offers.
Pros and Cons of Redeemable NFT
Redeemable NFT is still a new concept, so it has certain advantages and disadvantages. Following are the advantages and disadvantages of Redeemable:
Advantages of Redeemable NFT
- Provide Tangible Value: Redeemable NFT is a great way to exchange digital assets for something of tangible value, such as a physical item or a service. This makes them more attractive to investors, as they can see the possibility of getting tangible benefits from their investment.
- Increase the value of goods and services: By creating a digital asset that can be exchanged for a physical item or service, businesses can increase the value of their goods and services. This is because NFTs can be used to create scarcity for the item on sale as well as give the customer the chance to own something of value.
- Paving the way for new business: Redeemable NFTs can be used to create new business models and revenue streams. For example, Companies can issue their Redeemable NFTs and use them to issue coupons or rewards to their customers. This can be used to encourage customers to purchase a company’s products or services.
- Create Digital Collections: Redeemable NFT can also be used to create digital collections that will be tied to a real-world physical item. This is what big brands like: Adidas or Nike are using to develop their products.
Disadvantages of Redeemable NFT
- Vulnerable to scams: NFT is still a relatively new concept and therefore is at risk of being exploited by bad actors who can scam new entrants into the market. Therefore, we need to take the necessary precautions when investing in NFT to ensure the safety of our investment.
- Not yet widely adopted: Redeemable NFTs are still a relatively new concept, and therefore they are not yet widely adopted in the market. This also poses some risks, as they have yet to be tested in the real world.
- Difficult to use: Redeemable NFT requires binding to a virtual item or a physical item in the real world. This can make it difficult for users to go through complicated steps to redeem.
Popular Redeemable NFT Collections
RTFKT X Nike
Nike has collaborated with RTFKT to create the RTFKT X NIKE AR HOODIE FORGED collection of Redeemable NFT items. Users can purchase NFTs from the collection in exchange for corresponding Hoodies.
Following this, Nike and RTFKT collaborated with artist Takashi Murakami to create limited-edition shoes. The RTFKT x Nike Air Force 1 collection was published on April 24, 2023, and is available until May 8, 2023. By purchasing an NFT from the collections, owners can participate in a forging event that enables the redemption of physical shoes. This combination demonstrates Nike’s desire to incorporate new technology into its products.
Physical Backed Tokens by Azuki
The Physical Backed Token (PBT), which was announced in October 2022, promises to blur the boundaries between digital and physical assets. The project has also developed a decentralized method for validating and tracking the complete ownership of the user’s physical items.
Azuki has also concluded an auction for eight NFT skateboards that will be exchanged for physical gold skates. According to the project, the Gold Skateboard is a piece that demonstrates the utility of PBT and opens a new chapter in Azuki.
Ceilidhs x COR: The Rebirth Collection
In 2021, Ceilidhs introduced The Rebirth Collection, a collection of 4,000 NFTs. Users who have NFTs in their collection can redeem whiskey bottles. The NFT Collection undergoes three distinct phases before the bottles are sent to NFT proprietors.
Conclusion
Redeemable NFT is a promising concept with great potential that brings NFT closer to reality. This technology has the potential to transform how we do business and interact with digital assets. Beehive has provided the entirety of its Redeemable NFT-related information above. We hope that everyone acquires useful information.
