The UCE case for NFTs
I have an idea for an NFT… I think?
Ok, so you finally understand NFTs and what they do. And you think you have an idea for an NFT.
But how do you know if your idea is worth pursuing and pouring resources into?
We will outline a simple framework to help you screen your ideas and any NFT projects you encounter. But before we do this, it’s worth reflecting on recent history.
Dotcom parallels
The parallels between the early dot.com bubble and the current web3 phase are undeniable.
In the late 90’s, businesses were blindly adding a dot.com to the end of their names and seeing meteoric rises in their stocks. However only the businesses with real-world utility behind them would survive the dot.com and thrive. These were the businesses solving real-world problems trough technology and the businesses backed by real-world assets or services.
History certainly does appear to rhyme… with a very similar story around web3 today.
Beyond the media headlines of the current crypto correction and jpeg-monkey hype, business owners are trying to figure out how web3 and tokenisation models can benefit their businesses and customers.
And I suspect the answer to that question will also rhyme with history…in that the projects with real-world assets or services behind their web3 platforms will survive and thrive as we approach mainstream adoption of this technology.
Understanding NFTs
One of the key developments in web3 is NFTs. At its core, an NFT is a simple way to allocate and verify digital ownership of assets (both real-world and digital assets). Plenty has been written on what NFTs are and what they can do, however at their core, NFTs are a digital pointer that allocates asset ownership.
NFT = Unique Asset Ownership
The NFT UCE case…
We believe the following framework is a solid foundation on which to analyse and consider NFT projects and ideas. Any projects you consider should have Unique content, with an engaged Community and Excess demand.
U — Unique Content
Either the physical item or digital content must be unique, this is what the “NF” in NFT stands for (Non-Fungible). This concept, whilst self-explanatory, is also easily misunderstood. If the product or service considered for NFT development hasn’t been created previously, or you are the only one working on it in a particular way then it may be considered unique.
By contrast a jpeg of a monkey is not unique. Yes, it can be argued that the originator is unique, and that jpegs can be crafted with minor changes to never be the same. But the flip side is that they can be created with infinite versions of these jpegs through a myriad of small variations. These small variations do not qualify them as “unique” in a meaningful way.
Artists are often unique. With creative content that is sought after and an army of supporters willing to spend time with them, time with the artist could be “unique” and hence considered for NFT creation. And this leads us to the second component, community.
C — Community
If you have a community or group of engaged supporters, then you have the second key ingredient to a successful NFT implementation. Community is the essence of web3.
Tokenisation allows for the rewarding of all users in a web3 ecosystem (community). Fans are users, creators are users, developers are users. Each engaging with each other for common and self-serving outcomes, that in the end serve the community. With anonymous peer-to-peer transactions, blockchain and web3 makes this a streamlined process for the entire community.
E — Excess Demand
The key emphasis here is on EXCESS. There is no point in implementing an NFT framework if you hear crickets after its launch. The underlying asset for which you are considering an NFT framework must be in high demand.
Smart contracts enable NFTs with a unique feature which allows royalties to be paid back to the original creator. Hence, excess demand creates an organic market of traders for the asset, which provides a revenue stream for the creators. Every time the asset changes hands, the original creator gets paid.
Let’s see how this framework applies to a real-world project like PROPRT NFTs:
UCE case for PROPRT NFTs
PROPRT.io is an innovative platform which transforms the idea of fractional property investment and converts the ownership parcels into NFTs, with income and capital gains linked to an underlying real-world-asset.
Here is the UCE case:
Unique — Each unique property in the real world, is divided into unique PROPRT NFTs.
Community — There is a large community of property investors looking for ways to invest more efficiently (i.e. with less friction) in property rather than depositing cash in the bank.
Excess demand — Fractional property trades at a premium due to its convenience. Strict selection criteria are applied to each property to ensure demand for the asset exceeds supply. PROPRT NFTs by extension capture this excess demand.
NFTs are here to stay
Once we accept that NFTs are so much more than bored monkeys and right-click-save-as-jpegs, we can start to think about the real-world implementation of this technology.
Projects are now emerging which demonstrate the benefits of, and real-world UCE cases for NFT technology.
It’s an exciting time to be involved in web3 and blockchain development. The underlying technology is evolving at a dizzying pace. Property investors now have a unique implementation of this technology, which will lead the way for other businesses to consider the effective implementation of NFTs.
Secure a unique piece of real-property for less than you think at proprt.io
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