Topics NFT
Bybit Learn
Bybit Learn
Intermediate
Mar 31, 2022

Utility NFT Projects: NFT Use Cases Beyond JPEGs and Memes

Few things have captured the imagination of cryptocurrency investors the way NFTs have. First introduced in 2012 with Vitalik Buterin’s Colored Coins project, these unique digital assets have soared in popularity in recent months. With the introduction of CryptoKitties in 2017, more people became fascinated with NFTs. Today, the NFT utility industry is thriving. Recently, an NFT sold for an eye-popping $69.3 million, and that’s just the beginning. NFT use cases are evolving and changing. No longer merely JPEGS, GIFs and memes, utility NFT projects have quickly taken the top spot as the “next big thing.”

NFT applications might just be the key to the future, tracing ownership, defining properties, and granting unique behind-the-scenes access to token-holders.

What Are Utility NFTs?

Utility NFTs are non-fungible tokens that represent access, opportunities or other benefits for their holders. As with other NFT applications, NFT use cases hold value based on their scarcity as well as a clearly defined value, and tend to appreciate in value over time. Utility NFT projects are classified according to type, and they feature a variety of practical applications, granting access to airdrops, exclusive opportunities, invites, exclusive experiences, and early access to events or products.

Blockchain technology provides a permanent immutable record, storing information and creating a clearly identifiable and publicly accessible record. NFT utility assets represent anything unique, granting users and creators more flexibility and options than ever before. These projects can be powered by smart contracts, which require that certain conditions are met before transactions can be finalized. This eliminates the need for a trusted third party and enables trustless transactions.

The concept of NFT utility isn’t necessarily a new one. The general public has typically viewed non-fungible tokens as a type of “digital trading card,” often representing art, game characters, or other digital content. They can also be digital receipts which represent ownership of a specific digital or real asset, or a digital record that includes metadata related to NFT applications.

This emerging NFT utility technology has captured the imagination of millions of people, and the practical possibilities of this technology are virtually endless. Since the earliest days of humanity, we’ve enjoyed collecting things and connecting with others who collect those same items. NFT applications make it easy to do just that. With increased NFT utility, token holders can collect specific items, often with built-in rarity or scarcity, and share them with a community of others who own similar items or who share similar interests.

The concept of NFT utility goes far beyond collectibles, however, and is beginning to extend into a variety of real-life scenarios.

What Can NFTs Be Used For?

NFT use cases are still emerging, with new scenarios coming out every day.They offer an almost unimaginable array of options — not just for gamers and investors, but for everyday people. These novel NFT use cases can give us new ways to identify, track and simplify our day-to-day movements.

Massive interest in NFT applications has led to a booming market of crypto-collectibles and NFT art. Investors, developers, entrepreneurs and creators are discovering new real-world applications for managing assets, logistics, sensitive data and more through the magic of NFT applications. The burgeoning field of NFT utility is ripe for harvest with new applications and experimental use cases appearing each day.

NFT utility products can be designed specifically as a way to record product authenticity, storing product data such as rarity, history and origin. Users may even be able to trace the manufacturing process to understand its path from origin to finished product, or ensure various aspects of production, such as fair trade. Consumer products are one possible and popular option for NFT use cases, but commercial and industrial NFT use cases aren’t far behind.

Wondering how NFT enthusiasts are pushing the boundaries of how we can use NFTs in society today? Here are some examples of utility NFT projects we’re excited about.

1. Fashion

The concept of digital fashion isn’t new. Gamers have long had the ability to purchase digital clothes and accessories to add flash and flair to their characters and avatars. Digital fashion is evolving, however, along with the options for accessing and owning it.

Today, users can access a vast array of virtual fashion pieces to use and “wear” on avatars by such top gaming names as Sony, Epic Games and Activision Blizzard, and on various social media networks. As NFT utility technology transforms the business, so will its options — ranging from virtual fashion shows you can attend in the comfort of your bedroom, to immersive first-class retail shopping experiences that grant you behind-the-scenes access to all of your favorite brands.

MIRL is one of these virtual fashion options. This creative, decentralized autonomous organization has more than 4,548 MIRL “Personas” ready for investors who want to get in on the FashionFi narrative early. Keen on being part of the MIRL hype? Check out Metanoia, home to these MIRL Personas. To find out more about what makes MIRL so special, check out our guide, What is FashionFi, to see how MIRL is revolutionizing the world of crypto.

2. Gaming

Gaming is among the best-known uses for NFTs. From metaverse to play-to-earn models, gaming naturally pairs with NFT applications. Gaming NFTs are available in a wide array of genres, ranging from casual farming, collectible role-playing games and RPGs to deeply immersive strategy simulations — allowing for cross-platform playability, in-game trading, instant transactions, brand expansions, and exciting new revenue streams.

While play-to-earn gaming NFT utility models are certainly popular, gaming NFTs run the gamut, and you might need to dig deep to enjoy everything a particular game has to offer. However, as with other NFTs, once you’ve earned or purchased your own gaming NFTs, you’ll have part ownership in the game, and can trade or sell those same tokens within the game. Some games even provide you with the ability to exchange gaming NFTs across various platforms in exchange for real money.

You might already be familiar with the idea of gaming NFTs in the form of Axie Infinity, an RPG in which players can raise and breed a variety of little monsters, each of which inherits various traits from its ancestors. Axie monsters are collective and tradable both in-game and via NFT applications and marketplaces, with rare Axies having vastly higher worths than more common ones.

3. Tickets for Events

NFT use cases have the power to transform the ticketing industry. The concept of tickets is believed to have originated in ancient Greece, but it wasn’t until the 1700s that theater managers began to offer prepaid tickets, allowing them to better control the flow of theater traffic. Paper tickets came on the scene about a century later and were often highly decorative that became collectibles in their own right. Around 2010, paper tickets began being phased out, and were replaced with digital tickets or QR codes. These tickets are fast and convenient, and they reduce paper waste. However, the lack of collectibility is frustrating for some users.

Ticketing NFTs combine the best of paper tickets and QR codes. You can enjoy top-quality security with a ticket that’s easy to access and scan. With these types of NFT use cases, event organizers will be able to mint a specific number of NFT utility tickets on a particular blockchain platform. The ticketing NFTs can sell for a predetermined price or at auction. Once purchased, they’re held in a wallet accessible via mobile device, which can then be scanned

When it comes to NFT use cases, ticketing is one of the most flexible, granting event organizers the ability to mint the required number of ticketing NFTs on their choice of blockchain platform. They can code the ticketing NFTs to set a sale price, or run the sale as an auction, where people can start a bid for tickets.

Customers then purchase NFT utility tickets and keep them in their wallets, which can be accessed from their mobile devices. Customers may also have access to a variety of other benefits through NFT applications, including safe storage, a community of those with similar interests, and limited-edition perks and incentives.

In the world of utility NFT projects, ticketing can be done using a unique ID, much like a QR code, which is then scanned. This reduces paper use and makes tickets easy to verify using a scanner at one or more checkpoints. You can keep your ticketing NFTs at the event’s conclusion, however, and depending on the type of the event or NFT use cases, it may continue to provide access to other events or members-only communities.

4. Virtual Land

With the proliferation of the metaverse, digital land is becoming increasingly popular. You might be familiar with the concept of digital property through projects such as Decentraland, The Sandbox or Axie Infinity. The virtual properties can be used for a wide range of activities, including advertising, hosting experiences, socializing, gaming or achieving goals. NFT applications are used to trace ownership, purchase via smart contract, and conduct various business on virtual properties.

While it’s easy to imagine NFT applications in conjunction with virtual property, it might be harder to wrap your mind around the idea of NFTs and real estate. However, the reality may be closer than you think.

In the real estate industry, NFT applications can be used to represent physical properties. Digital tokens can be linked to map coordinates, prices, measurements, historical ownership and more, making it virtually impossible for bad actors to tamper with various essential details associated with the property.

Real estate NFT applications can be used to store land deed data and proof of ownership, track property value data, simplify and speed transactions, and allow for smart contracts to complete sales more effectively with minimal risk of sensitive data exposure.

5. Exclusive Communities

The right utility NFT projects can also grant exclusive access to various communities. Also known as access NFTs, or NFT utility tokens, this type of non-fungible token grants ongoing access to content and communities in either the digital or physical world. One example would be the Bored Ape Yacht Club, with an NFT utility token that grants exclusive membership to a special yacht club.

Each unique ape is randomly generated, using more than 170 potential traits including clothing, accessories and facial expression. Apes are stored as tokens on the Ethereum blockchain, and each has the same cost: 0.08 ETH. Once you purchase your ape, you have access not just to avatars and art, but to a community with benefits that grow with time. Your Bored Ape NFT utility token will open doors in the community as you discover new opportunities and dip your toes in new swamps.

Membership in the club grants you access to other members-only spaces, including:

  • The bathroom, which is a collaborative art space
  • The Mutant Apes Yacht Club, granting users fun alternative versions of their apes or “mutants”
  • The Bored Ape Kennel Club, which grants users pets for their apes
  • The merch store, which features exclusive members-only merchandise

Members of the BAYC also have access to the Apes vs. Mutants mobile game competition. This game is played as a virtual food fight between the bored apes and the mutant apes.

6. Music

Music NFT applications are a blockchain-based way to purchase the music you love. Instead of buying a track through another platform, you can purchase the track as an NFT utility token. Why would you choose NFT applications over MP3s? NFT utility applications offer not merely the music, but ownership in the asset. In other words, you own the file, which is original and provably unique.

The most obvious benefit of music NFT applications is that artists can earn valuable royalties. Called Limited Digital Assets, or LDAs, artists can directly share streaming royalty revenues with NFT-holding fans. Sound.xyz is one of these music NFT applications, creating new ways for listeners and music to connect for a more collaborative music experience. Sound.xyz is built on Web3 technology. It’s designed to give listeners more (and more effective) ways to directly support their favorite artists, discover emerging new artists, launch listening parties, and create their own musical culture.

7. Profile Pictures and NFT Avatars

Art has been one of the first and most popular uses for NFTs. NFTs make it possible to both tag and track digital and physical art for better identification, authentication and tracking of various pieces. While you might not think of your profile picture or NFT avatar as art, it can be — especially when you opt to use an NFT.

Increasingly, social media platforms are making it possible for users to show off their unique style with NFT profile pictures. To do so, simply connect your profile with your crypto wallet, which will enable you to display your own NFT utility art as your avatar — thus marking you as the owner of that particular NFT. It can be a fun way to show your flair!

Upcoming Utility NFT Projects

Blockchain technology and NFTs are increasingly making the impossible possible, and using the power of the blockchain to support their communities, including:

  • Land DAO, a utility NFT project which brings together DeFi founders, crypto investors, NFT applications influencers, and people from all backgrounds and walks of life to curate powerful art collections, designed to move and inspire.
  • Mavia Land, a strategy game in which you defend your home against all enemies while earning a variety of resources, completing challenges, and upgrading your team.
  • Rebel Bots, an upcoming utility NFT project that’s backed by big names like Ubisoft, Animoca Brands and Overwolf. With plans to be the next top play-to-earn card game, you can gain an early advantage by investing in their genesis Rebel Bot NFTs today.
  • CityDAO Citizenship, an up-and-coming utility NFT project that presents a digital representation of a city and grants “citizens”(users who buy property) the ability to engage in various activities. These include buying and selling property, and governing the CityDAO.

These NFT use cases are all indicative of exciting new utility NFT projects on the horizon. They may pave the way for even more new NFT use cases and projects that can make our lives easier or more enjoyable, connecting us with new people, new collectibles and new options.

The Bottom Line

The benefits of NFT utility and the diversity of NFT use cases are growing quickly. As more people discover this, they’ll become more popular, and we’ll see even more creative ideas and use cases emerge. However, at this time, NFT applications are still very much in their infancy, and many new utility NFT projects still need to be more fully fleshed-out to become viable ideas with quantifiable, real-world value.