How to Improve Utility to Increase the Impact of NFTs
NFTs quickly turned into a very popular conversation as people continued to share stories of NFTs making them over 6 figure returns. Google Trends shows that overall interest in NFTs fell from a height of popularity in January to about 35% of that popularity today. What is the cause of this sudden fall? This can be due, in part, to lack of utility in most NFT projects.
Utility in NFTs refers to perks or opportunities that are passed onto holders of said NFT. This utility can refer to either physical utility, such as access to physical art pieces, or passes to events or even virtual utility, such as having the ability to stake the NFT, which in return gives the staker a unique ERC-20 token. Staking a NFT refers to sending the NFT to a private address that will hold the NFT and reward the staker with the unique ERC-20 token. The amount of the token increases the longer the NFT is kept at the private address. Staking NFTs is beneficial to the collection owner as this will ensure that fewer people will list the NFT for sale, which will cause the supply of the collection to be low and in return should increase the price. An excellent example of this is a collection with a very strong community called Sappy Seals. With a collection of 10,000 unique seals, the owners of the collection encouraged users to stake their seals, and with community support around 8500/10000, seals are currently staked. The collection skyrocketed in popularity, which allowed for holders to gain valuable $Pixl (the collection‘s unique token) that they can use to buy other NFTs in the community’s ecosystem as well as having the value of the seals skyrocket as well.
Other than these forms of utility, we have not really seen much else. With no real reason to purchase an NFT besides underwhelming promises from creators and the art itself, people are beginning to look for collections that offer more than just a profile picture. Utility in projects can save the NFT marketplace and one company that is pushing this is RMDS Lab. RMDS Lab’s unique NFT Marketplace was put together for Science and Tech IPs, and it focuses on connecting scientists with investors. Being able to buy intellectual property rights has been a primarily untouched space. Building a separate NFT Marketplace that includes science allows for this utility to be discovered by science lovers and NFT enthusiasts alike. A separate marketplace is needed due to the pure amount of art collections with little to no utility on other marketplaces. This new marketplace will allow for a new wave of collectors to join the space and find a project that holds value due to utility, something the NFT space needs.
Written by Rajat Kamboj