NFTs are Dead, Long Live NFTs
Though the 2020 and 2021 mainstream hype over NFTs has quieted, the NFT industry has far from disappeared from the Web3 ecosystem. Recently, with the loss of investor confidence in the DeFi industry, NFTs have held steady in their value, their utility, and their place in the blockchain-world. Some have even argued that NFTs are the only way that real-world value can be shown from blockchain assets.
NFT creators, founders, investors, and companies are embracing new use cases that solidify the technology as a true digital asset. From fine art and real estate investment to the rising use of utility NFTs and growing IP empires, NFTs are evolving rapidly.
In this article, we discuss the current state of NFTs, including how they have changed and the new opportunities that advancements in NFT technology present.
Keep reading to learn about 4 emerging use cases for NFTs!
How NFTs Have Changed in 2022
In 2021, most of the hype for NFTs revolved around PFPs, a type of NFT that could be used as a profile picture (PFP) on social media accounts like Twitter and Facebook.
At the height of PFP NFTs popularity, these NFTs were receiving a monthly search volume of 4.3K searches, giving them an 829% increase in public interest between 2020 to 2021. Now in 2022, much of the hype surrounding PFP NFTs has died down.
This use of NFTs was both widely adopted and widely criticized, as it was the main introduction to NFTs for many people who had not heard of or did not know much about NFTs. As a result, public perception of NFTs ended up a bit skewed, with many unaware of other more practical uses of the technology.
As the PFP craze has lessened in popularity, NFT creators and founders are now working to expand public knowledge and education surrounding NFTs, particularly when it comes to emerging use cases and their increasing practicality.
With this in mind, let’s examine four of the top emerging use cases for NFTs.
4 Emerging Use Cases for NFTs
For people outside of the blockchain space, there tend to be wide misconceptions about NFTs, what they are, and how they can be used.
While NFTs can be used to commodify pieces of digital art — as seen with PFPs — this is far from the only potential use case for them. In fact, many NFT creators and company founders have worked diligently to create a more robust NFT industry.
Here are the top four emerging use cases for NFTs in 2022:
1. Fine Art NFTs
NFTs originated as a means for giving greater value and ownership over art and, specifically, fine art.
A fine art NFT, in simple terms, represents a piece of artwork that can be physical, digital, or a combination of the two. Though many claim that investing in fine art NFTs is similar to simply downloading a .jpeg file, the reality is much more complex and nuanced.
Fine art NFTs allow art investors to establish an official record of ownership. Resulting from this, artists can more easily monetize their work without the use of intermediaries that may charge high commission fees for sales. Likewise, collectors and investors can quickly authenticate pieces of artwork thanks to the immutable records provided by blockchain technology.
In addition to this benefit, Twitter user @NFT_GOD — an NFT influencer and newsletter author — points out that fine art NFTs also provide the advantage of greater liquidity and discoverability, as well as enabling more types of artwork to be monetized (such as generative, motion, and evolving artworks). It is important to double check how your art is stored; it is always advantageous for your artwork to be stored on a decentralized storage protocol (like IPFS) vs. a centralized server.
2. Utility NFTs
Utility NFTs are quickly rising in popularity amongst NFT, crypto, and other blockchain-based companies as a means to offer additional value to investors and customers.
A utility NFT is a unique digital asset that provides owners with extra benefits upon gaining ownership, such as exclusive memberships, access to events, organizational voting privileges, and more. These types of NFTs offer companies and creators excellent practicality, as they can not only profit from the sale of the NFT but also build a community and evolve the asset’s value over time.
Here is an overview of some of the most innovative uses of utility NFTs in today’s market:
- Splinterlands: One example of the use of utility NFTs is Splinterlands, a blockchain-based video game with collectible trading cards. Players own the collectible cards via NFTs that provide access to the game, allow users to grow their collection, and even sell their NFTs for real money.
- Flyfish Club: Flyfish Club is the world’s first NFT restaurant. The NFT itself provides owners with access to the restaurant, located in an exclusive, 11,000+ square foot dining room in the lower east side of Manhattan.
- Cafe11: Cafe11 is a decentralized autonomous organization (DAO) that has partnered with Hennessy and Friends with Benefits (FWB) to launch the Cafe11 NFT. This NFT provides owners with exclusive access to both in-person and virtual events centered around luxury culinary and entertainment experiences.
- LinksDAO: LinksDAO is a well-known DAO that is working to purchase a golf course and create an exclusive golf club that can only be accessed through ownership of the DAO’s NFT. With ownership, you also receive exclusive benefits such as discounts on golf lessons and equipment, as well as exclusive booking for tee times.
Another example of a utility NFT is our own Grimmies NFT here at Webacy. By purchasing a Grimmies NFT, you can gain access to our Web3 safety platform, pricing privileges, and more.
3. IP Empires
With NFT creators, investors, and companies alike recognizing the ownership power that NFTs present, many are beginning to build IP (intellectual property) empires.
Business empires are groups of brands, organizations, products, and more controlled by one entity. These types of empires often require institutional funding to maintain their operations. By comparison, an NFT IP empire relies instead on crowd-funding via NFTs, which can not only raise immense amounts of revenue but also provide more distributed ownership rights amongst NFT owners.
One of the most well-known players working to create an IP empire is Yuga Labs, the organization behind the ever-popular Bored Ape Yacht Club (BAYC).
Since the meteoric rise of the BAYC NFTs, Yuga Labs has gone on to acquire the full IP rights to two major NFT projects (CryptoPunks and Meebits), develop a play-to-earn game called Apes vs. Mutants, launch its own crypto ApeCoin and the corresponding ApeDAO, and — more recently — a $450 million funding round in collaboration with a16z.
Other notable NFT organizations working to build their own IP empires through the use of NFT crowd-funding and audience acquisition include Veefriends and Moonbirds, each raising around $50 million. Veefriends also recently announced their plush toy collection, exclusively available at Macys (and they even have trading cards too!).
With this level of funding and IP ownership, these organizations are poised to become Disney-like empires that hold ownership over a wide variety of products, media, and more.
4. Physical Property & Real Estate NFTs
The final emerging use case for NFTs is the tokenization of physical properties and real estate.
NFT homeownership works by recording the official ownership of the property in the blockchain ledger associated with the NFT. According to Entrepreneur, the first sale of a homeownership NFT occurred in Columbia, South Carolina, with the home selling for $175,000.
However, this is not the only time real estate has ventured into the NFT space. In Florida, for instance, a home was auctioned off as an NFT, which was purchased using Ether valued at the time at $653,163.
While there are still complications when it comes to real estate NFTs — particularly when an LLC is involved and true ownership is unclear — the potential of real estate NFTs makes the prospect of buying property more widely accessible thanks to the elimination of middlemen, such as mortgage brokers.
Final Thoughts: As NFTs Gain Practical Value, Practical Protection is Needed
The practicality and use cases of NFTs are increasing, making it all the more crucial to keep your self-custodial digital assets secure throughout your lifetime and beyond.
Webacy’s platform offers a host of products and tools that ensure your NFTs, cryptocurrencies, and other digital assets are kept secure at all times: more importantly, assets that you hold in self-custodial wallets. With features such as our Wallet Watch, Backup Wallet, Panic Button, crypto will-writing tools, and more, Webacy can keep your assets safe from hacks, loss, death, and other unexpected events.
Gain access to Webacy today with the Grimmies NFT.