The Most Promising NFT Use Cases

The NFT topic continues to thrill the minds of people around the world. Everyone from small startups to big brands is trying to catch the wave of this year’s main crypto trend. One of the most interesting things is that we have been talking about blockchain for a long time, but it is NFTs that have become for society a clear confirmation of the value of distributed ledger technologies for the modern economy. But still one of the main questions among blockchain beginners is how to use non-fungible tokens? How can you benefit from them? In this article, we have collected the most promising use cases of NFTs across industries.

What is NFT and how it works

First, let’s start with the NFT definition. Non-fungible tokens (NFTs) are tokens, each copy of which is unique and cannot be exchanged for another similar one. The key to understanding this is in the nature of tokens. For example, we all know that one bitcoin is equal to another bitcoin. We are used to this type of token where we can easily replace one item with another and get the same value. But this is not the case with NFT.

Each non-fungible token stores unique data about a unique object and confirms the right to its ownership. If you turn your digital painting into an NFT and your friend creates an NFT from his painting, these will be two different tokens with two different objects behind them. These properties have driven the interest in NFTs as we now have the ability to digitize ownership of unique assets.

Currently, most NFTs are built on Ethereum using ERC-721 and ERC-1155 standards. Although with the growing popularity of NFT, other decentralized platforms have released their own token standards (e.g. EOS and NEO). Each NFT token has a set of unique metadata about the object recorded in its smart contract. The transfer of ownership of the token is also carried out using smart contracts. You can buy or sell NFTs on dedicated marketplaces, such as OpenSea or Rarible.

Still got questions about how NFTs work? Read the Introduction to non-fungible tokens

Where NTFs are used

NFTs open up new opportunities for both digital and real-world assets. The unique properties of non-fungible tokens allow their widespread use in various industries. The decentralized ecosystem of blockchain ensures the traceability of the token holder, which means you can be confident in the reliability of transactions. All this has led to the fact that the most popular areas of NFTs distribution are сollectibles, art, domain names, gaming, sports, digital identity, and real-estate. Let’s take a closer look at some of these industries to find out which option best fits your business needs.

NFT and art

NFTs have become a great prospect for digital artists. This type of art has long played a significant role in our lives. Businesses use it to attract clients to online platforms and social networks, to increase user engagement, and for other purposes. However, creators often don’t get anything in return for their work. NFTs are transforming the art industry. With NFT, they can validate their digital art and earn money from it. As you can see, this solves several problems at once: NFTs provide proof of ownership, protects against copyright infringement, and allows you to sell your digital arts. In other words, artists have the opportunity to create a new digital art market. And if there is a demand, then why not?

Here are some examples of the successful use of NFT in art:

• Auction house Christie’s sold the work of artist Beeple as NFT for $69.3 million in March 2021.
• The New York Times offered a digital image of their column for sale at a charity auction and received $560,000 in cryptocurrency.
• Distributor Ditto Music has added NFTs to their blockchain platform Bluebox to allow purchasing shares in songs.

So as a creator, you can use NFTs to sell your work. As an entrepreneur, you can add NFT to your platform or create an NFT marketplace to attract artists and meet market demands.

Collectibles

Collectibles is one of the most promising and sales-oriented NFT applications. Starting with CryptoKitties released in 2017, there have been many other initiatives inviting netizens to collect rare digital items. Because NFTs maintain their uniqueness, they are an excellent solution for digitalizing the collectibles market, where there is proof of ownership and protection from copywriting infringement.

Here are some examples of using NFTs in collectibles:

• The Austrian postal service has launched the Crypto Stamp project, which allows you to link postage stamps to tokens and use them for real post offices and for collecting stamps on the blockchain.
• The NBA’s Top Shot is a blockchain-based trading card system that offers basketball game highlights.
• The Terra Virtua platform has created a collection of 3D animated character-based creatures called vFlects, as well as licensed 2D and 3D collectibles from The Godfather, Top Gun, Sunset Boulevard and Lost in Space.

As you can see, here are the same principles as in the real world. NFTs are simply converting collectibles into digital format.

Gaming, DeFi and NFT

Gaming is home to NFTs. CryptoKitties became one of the first and most popular games to use the non-fungible token mechanic. Each cat has a unique set of attributes and contains information about the creator. In 2018, the most expensive crypto-cat was sold for $140 thousand. This is not surprising. Gamers are the audience that is close to the virtual world like no one else. Using NFT allows in-game rare items to be tokenized. Then you can sell them, exchange, reward the game participants, and so on. In many ways, this allows game creators to provide a unique user experience and create additional value for players within the game reality.

Experts draw parallels between DeFi and NFT. Both paradigms work on the principle of decentralization and can complement each other well. For example, NFTs could help to expand the market for decentralized finance by using tokenized art or real estate as collateral for loans. You can already find examples of such combinations.

Aavegotchi combines DeFi and NFT gameplay. Each Aavegotchi character represents the user’s collateral on the Aave lending platform. Then you can fight with them, level up, and add upgrades that change their traits.

AnRKey X combines DeFi and esports gaming. Users can compete with each other, purchase unique NFT tokens, place bets, and receive valuable rewards.

Sports

You probably weren’t expecting to see sports in the list of industries using NFT, but it is. We have already mentioned collecting basketball cards, but there are other examples related to sports. For instance, Belgium’s leading football league, the Jupiler Pro League, has partnered with gaming company Ubisoft’s Strategic Innovation Lab and startup Sorare to launch a fantasy football game using digital collectibles as an NFT. Here’s another example. Nike patented the CryptoKicks sneaker authentication system in 2019. When you buy a pair of shoes, an NFT is generated with unique information about the item, including appearance, manufacturer, and the like. CryptoKicks owners then can mix a digital shoe with another digital shoe to create “shoe offspring” and produce a new, real-world pair of shoes.

These examples prove that NFTs can be effectively used both to gamify company processes and increase consumer engagement and earn money from collecting things. Everything is limited only by your imagination.

Real-world assets

Here’s where things get interesting. NFT is a promising way to tokenize real-world assets such as licenses, certificates, real estate rights, and more. NFT allows you to turn an asset into an indivisible unique token, and blockchain provides traceability and proof of ownership of the token owner. One of the main advantages of this approach is efficiency. Converting a physical asset to a digital asset simplifies processes and eliminates intermediaries. NFTs allow sellers and buyers to connect directly with each other on dedicated online marketplaces, choose the best deal terms, and use self-executing smart contracts to implement them.

However, it should be recognized that the use of NFT for real-world assets requires new blockchain regulation. Therefore, now this type of token is actively used specifically for digital assets.

NFT marketplaces

We have already mentioned that to buy and sell non-fungible tokens, you need special platforms that support the required token standard and smart contracts. These platforms are called NFT marketplaces. With the growing popularity of using NFT, creating a marketplace is also one of the great options for getting benefits from NFT. Marketplaces are designed to attract creators and buyers, and platforms receive a commission on transactions. There are both niche (Valuables) and universal marketplaces (OpenSea, Rarible) that offer a variety of asset types. Platforms like OpenSea offer ready-made solutions for developing NFT marketplaces, however, if you want to build a truly functional and custom platform, you need the help of experienced blockchain developers.

Want to build your own NFT marketplace? Read our ultimate guide on developing an NFT marketplace here

Final thoughts

So, NFT has a fairly wide application for both digital assets and real-world assets. The main advantage of non-fungible tokens is the ability to charge the online economy and build a completely new digital market. The NFT paradigm continues to evolve and soon we will see new promising use cases. Who knows what it will be? All we can say is if you have ideas related to NFT now is the right time to implement them, while NFT is on the rise.