Living Assets — NFT 2.0: a Toolbox for Engagement
In our last post, we introduced the concept of the Living Asset — an evolved form of blockchain-based digital asset which, unlike the current generation of NFTs (let’s call them NFT 1.0), can also change, or evolve. At Freeverse.io, we leverage blockchain security to permit this evolution in a way that is always traceable and on-chain certifiable.
In this post, we will start exploring several ways in which evolving NFTs can lead to unprecedented levels of engagement with user-owned digital goods, and we’ll do this using a ‘toolbox’ analogy. We are eager to plant the seed of creativity, and let the entertainment industry continue the brainstorming, and to uncover novel uses that the Living Asset concept enables.
When creating assets using current NFT 1.0 frameworks, their market valuation can be controlled via a combination of three ‘tools’: scarcity (guaranteed by the blockchain), love for the brand (be it the NBA, or your favourite artist), and speculation (since assets are immutable, one can only hope that some buyer will still want to pay for the exact same thing in the future).
Let’s consider expanding this toolbox with a selection of new tools that only become available when creating NFTs as Living Assets: user actions, real world events, measurable data, and unlimited assets.
It is completely up to the creator of the NFTs to choose the right combination that best suits their purposes. As always, designing the right economic forces requires a mixture of art and science — therein lies the fun! So, without further ado, let’s dive in.
The User Actions Tool
Employing the User Actions tool permits a rather profound change to the status quo, in that it allows users to transform their effort and skill into market value.
Imagine a multiplayer, sports-manager simulation game, where every player on every team is a Living Asset, and can be traded them freely on an open marketplace. By competing with other users, and training their players, gamers can ‘level up’ their Living Assets, making them more effective in the game, and thus much more valued by other gamers. The market mimics real life: there are net buyers, net sellers, and everything in between; and with all the asset properties transparent and certifiable on the blockchain. The same concepts could extend to role-playing game mechanics, or management games, or even newer-style merge or crafting games.
The same applies to worlds where User Generated Content is key. Imagine buying a custom car in a racing game, then adding further customisation touches yourself (a new paint job, a modified exhaust) before putting it back on the market. Or imagine buying a series of digital artworks to hang in your house in a virtual world; each in itself looks great, but once you complete a pre-defined collection, they transform and merge to become one mega-artwork: its value being much more than the sum of its parts. Think similar applications in The Sims, Roblox, or even Minecraft.
A final example comes from something that touched many of us years ago: the Tamagotchi. It showed us, for the first time ever, the possibilities involved in owning and interacting with a virtual item — and created a retention mechanic that many of today’s popular games can only dream about.
So, yes, Tamagotchi mechanics can be back, at scale, with Living Assets.
The Real World Events Tool
Exploiting the Real World Events tool enables to establish an enduring engagement from the owner of the Living Asset towards the real world concept it is attached to.
People already speculate with regards to the value of real-world goods associated with sporting stars (trading cards etc.), based on how they expect that star’s fortunes to wax or wane in the future. Living Assets can take this concept to the next level: properties need not be written in stone when the asset is first created, they could change based on the performance and status of their real-world equivalent.
Imagine a Connor McGregor Living Asset changing appearance, as the UFC star gains or loses weight to fight in different weight divisions. Or you could buy a NBA rookie card (or cube) and use it in videogames and social apps… with the stats of the asset always being in sync with the real player.
Of course, this approach works perfectly for digital avatars of any star or celebrity (whether living or dead) with stats that could follow their life, preoccupations, disappointments and successes.
Let’s bring this one step further, and enter the realm of fundraising. Platforms like Kickstarter and IndieGoGo raise billions of dollars for all manner of creative projects, based on nothing more than their potential. Living Assets are a natural fit to plug NFTs into this concept: think of a piece of art that is evolving constantly; a celebrity avatar starting off as a low-quality 3D scan, and gradually maturing; or a game asset which initially can do very little in the game, but gradually gets more functionality as the game is developed further.
The Measurable Data Tool
Automated data tracking adds even further potential to the idea that is, in a sense, a combination of the previous two. Imagine a Living Asset that changes based on any external data that can be measured or automatically tracked. Examples:
- a Living Asset could be automatically linked to a certain hashtag on Twitter. The number of tweets featuring the hashtag could automatically change the asset’s appearance, or its ability to access a feature in a virtual world, or its ‘power’ in a game.
- a Living Asset associated with a real-world character could be linked to (and change based on) the number of shares of an Instagram story featuring that character it is associated with.
- A Living Asset could be linked to the amount of traffic to a specific website, area within a virtual world, or even the number of Google searches for a specific phrase.
This enables an almost new kind of application, one where users are incentivised to carry out certain tasks in the real world in order to, besides having more fun with their assets, increase their market price. As the asset is entwined in the metaverse, the creative possibilities have virtually no boundaries but our minds.
The Unlimited Assets Tool
One of the ways that Duke Nukem 3D revolutionised shoot-em-up game genre, in the mid-90s, was that you could shoot, blow-up, or otherwise destroy almost everything in the game. Gamers suddenly entered an era where they started taking for granted that every single game object should be interactive.
A similar change in mindset is possible by Living Assets, thanks to the Layer-2 tech behind them, which permits the registration and evolution of massive amounts of assets at virtually no cost.
NFTs are currently associated with ‘expensive’, with large sums being paid for ‘selected’ NFTs making the headlines. Consider a situation where every asset in a game can be assigned to users for free. Of course such assets start at zero market value, but with careful use of the User Actions tool (described above) users who spend time & effort in the game will improve their Living Assets, so that the market value is fully determined by actions, sending user-retention sky rocketing. As a result, we end up with NFTs with market values ranging from zero to whatever the game popularity allows, and core values associated with ‘retention’, ‘effort’, ‘skill’ and ‘fairness’.
And, of course, the older building blocks of NFT 1.0 still apply — if every bullet in the game is a NFT, what would be the price for the winning bullet in a CS:GO Major Championship?
Conclusion: Asset Evolution Retains User Attention
The evolution enabled by Living Assets is key to turning the passive experience of simply ‘owning a digital collectible’ into active engagement. And this, in term, leads to greater user retention, as Living Asset owners are encouraged to return to the original creator of their digital assets; to play, interact with, get informed about, share, and trade them.
We hope that this post has helped plant the seeds of creativity, and we look forward to seeing where the world goes with the results! Keep following us here, or on LinkedIn, as we start to explore some of the more technical aspects regarding Living Assets, and how our Layer-2 blockchain technology enables us to turn the concept into reality.