LIQUIDITEAM DEEP THOUGHTS
The Utility NFT Classification Guide
Defining a classification structure for utility NFTs — or NFTs 2.0
A while ago, I interviewed John Haegele, a sports media veteran who carries an impressive resume from his time at the NFL,broadcast.com with Mark Cuban, Yahoo! Sports, and a bevy of consulting and advisory roles.
What started as an interesting trip down memory lane within sports and sports broadcasting, turned into the revelation that in the mid-2010s, John was heavily involved in blockchain and was utilizing “NFTs” as a means to bolster sports ticketing security and transparency. The synopsis was that ticket scalpers that were selling fake tickets couldn’t do so if the tickets were non-fungible and visible on the blockchain. Unsuspecting ticket buyers could simply view the contract data and see whether it was an official ticket or not, including seeing transaction history.
While the “NFT” term was not so widely used back then, the non-fungible tokens John dabbled with were some of the earlier iterations and utilization of the technology.
This small revelation, paired with the current craze of NFTs, has sparked a lot of interest in us at Liquiditeam, specifically in the realm of demystifying NFTs and trying to illuminate what is the next logical step in the NFT timeline.
This classification guide is my attempt at defining the next generation of NFTs, which in our eyes, are Utility NFTs, categorizing buckets of use cases, and assigning companies or startups who seem to be headed in that direction.
Let’s jump into the first bit: what are Utility NFTs?
What are utility NFTs?
So as the subhead suggests, Utility NFTs are NFTs that carry some underlying utility or application. A very creative description indeed.
To zoom out even more, what are NFTs or non-fungible tokens?“Non-fungible” essentially means that the asset is unique and can’t be replaced. For example, Bitcoin is fungible because each Bitcoin shares the exact properties as every other Bitcoin.
This makes NFTs the perfect prospect for digital collectibles.
And logically, the first iterations of NFTs that reached fairly widespread adoption emerged in the form of static digital art and collectibles.
To summarize it quickly, Rare Pepes was one of the first digital collectible trading that happened on the blockchain.
It eventually moved to Ethereum and a couple of creatives, John Watkinson and Matt Hall created their own version: Cryptopunks.
But it wasn’t until CryptoKitties came around in October 2017 where it went parabolic.
Referred to as digital beanie babies, CryptoKitties were making millionaires left and right and consequently appeared on every news station and publication. The cultural tipping point if you will.
This brings us to 2020 and the 2nd wave of NFT mass adoption — this time the company that made a splash was NBA Top Shot. From Dapper Labs and built on the Flow blockchain, users can collect and trade officially licensed NBA and WNBA digital collectibles as NFTs. This was the first instance that a brand as big as the NBA jumped into the waters on an NFT project — consequently bringing a massive influx of new retail interest.
The core product at NBA top shot was video snapshots of highlight plays as NFTs. This was one of the popular instances of a shift toward multimedia content as NFTs.
As we can see, the timeline of NFTs starts to become more and more interactive. This was the first shift from static images to multimedia assets as NFTs.
And what comes next after multimedia assets? Interactive assets.
NFTs 2.0 — interactive utility
I mean, one might argue that all assets, static or not, are interactive. They can be traded, viewed, admired, shown off, etc. What I mean by interactive is that the assets themselves have functions and, also, the user experiences that exist around them get increasingly more elaborate and varied.
This brings us to the classification of utility NFTs — or uNFTs — and what that encompasses.
This is our classification guide to uNFTs, which is of course a subcategory of the broader NFT category. uNFTs are important to us because of two reasons:
- We think utility-driven NFTs are the future based on user-demand
- We just released our uNFTs in LT Platform
Let’s define each one first.
Access NFTs: Get access to exclusive experiences, online and offline which can include events with celebrities/athletes, premium content, voting on brand decisions, and much more.
Community: Ownership of exclusive NFTs comes with access to special fan communities. Ownership can be transferred if desired.
Gamified NFTs: Users compete for special NFTs that are dropped as a perk for their activities or as a part of a gaming universe. The Sandbox is the most prominent example of in-game NFTs as an important facet.
The Sandbox is a community-driven platform where creators can monetize voxel assets and gaming experiences on the blockchain. The Sandbox metaverse comprises a map made up of 166,464 LANDS. LAND owners can host contests and events, stake SAND to earn and customize assets, monetize assets and experiences, vote in the metaverse governance, play games that you or others create, and more.
Fantasy NFTs: Sorare comes to mind in the realm of fantasy sports leveraging gamified NFTs. Players can purchase player card NFTs and each week, they can create lineups and earn points based on players’ real-life performances.
Engagement NFTs: these NFTs are very intriguing to us at Liquiditeam.They encompass NFTs that can be used to engage with other users within a community. If anything, we are inspired by the social constructs from Twitch and Discord.
Social NFTs: are NFTs that can be used socially like GIFs, emojis, badges, profile pictures, comment embeds, etc. Our approach here is similar to Discord with channel/role-specific emojis but users can earn them as NFTs and use them within that community or across the NFTverse.
The common denominator for utility NFTs is that the assets can and should be used regularly. These aren’t just digital collectibles that sit in your meta mask wallet until you decide to flip it for some profit.
While this is a “working guide,” we feel it is a first step to categorizing where we think the industry is headed.
uNFTs in LT Fan Platform
My esteemed colleague, Thomas Euler published his own piece that dives deeper into the specifics of uNFTs in the LT Fan Platform.
I will provide a short summary here.
Within the platform manager backend, operators can easily publish articles, videos, podcasts, etc. We took this logic and applied it to publishing NFTs as well.
It is accomplished in 3 steps.
The first step with every NFT is minting, i.e. the creation of an NFT. Our NFT Creator is so simple and takes a minute to turn your media asset into an NFT.
With the NFT Giveaway Creator. You can select from a myriad of user actions — for example signing up, opening the app, posting a comment, participating in a voting, subscribing, and many more — and create an NFT drop.
Activate sponsors with NFTs
Utilize sponsored NFTs collections, sponsored NFT drops, and can be used to activate sponsorships.
The NFTs within the platform can also be used creatively and you can assign user rights, event access, content access, etc. all based on the ownership of particular NFTs.
A word about us: Community and Content Management for the Web3
As mentioned, Liquiditeam builds LT Fan Platform, a web3 community and content management system and token-powered digital business engine. And as I mentioned in this article, it’s a faceless platform for creators, community organizers, and influencers looking to better engage fans.
With the platform, it’s easy to start your own web3 platform, start your own social token, mint your own NFTs, and set up your digital business.
If you want to learn more about what LT Fan Platform can do for you, visit our website and start your own fan platform.