The NFT space has experienced exponential growth since 2020, establishing itself as one of the pillars of blockchain technology. NFTs are not just pictures and proof of ownership on blockchain as they have been misconstrued, they are cryptographic proof of the existence of objects or properties both virtually and in the physical. They have several use cases both applicable to real-world and virtual objects.
This article seeks to examine some of these use cases that have a high propensity of gaining traction in 2023.
Fashion unbound
A lot of individuals are on an unending quest to find new ways to express and demonstrate their fashion creativity. In the course of expressing their creativity, there has been an existing problem of intellectual theft where big fashion brands are being disturbed by small brands who refurbish their original products.
As this problem surges, NFTs can solve this problem by providing an authenticity seal. Users can always verify if a product is genuine or fake with NFTs. Companies like Gucci, Louis Vuitton, Marc Jacobs, and others are already experimenting with digital NFT versions of their items. Users may now interact with their preferred brands online through NFTs, which have given fashion companies a new channel for reaching their audience.
Music, Royalties, and NFTs
In some ways, the fusion of music with NFT technology has been successful. Music and NFT technology have effectively created a confluence. Musicians have frequently had disputes concerning royalties with record labels in the music business. By cutting out the middlemen, NFT technology gives artists more independence and automates the payment of royalties. The silver lining with this is that royalties will continue to be paid to artists long after the original sale.
The majority of the gains will go to independent musicians since they don’t necessarily need a big fan base or a company to make money off of their music. NFTs give artists the freedom to tailor every aspect of their work to their preferences, allowing them to include special features for fans or choose the proportion of royalties on resale, which strengthens the bond between the audience and the performers. The music industry has found a long-standing solution in NFTs. This is also a form of foreshadowing, hinting that the space will see more artists use NFTs. For example, Sportify has been tinkering with NFTs.
Patents and intellectual property
It is well known that the fundamental component of non-fungible tokens is proof of ownership. This makes NFTs ideal to assert ownership rights, particularly when it comes to patents and intellectual property (IP).
NFTs serve as a way to protect tangible intangible assets like intellectual property and patent rights. For example, people can convert their documents into an NFT, timestamping it with the ownership seal. Tokenized certifications also provide built-in legal protections to uphold the authenticity of the documents and improve process transparency.
NFT lending
NFTs can also be used as collaterals to secure loans. A lender or investor who wants to earn interest on their investment makes the loan available. Lenders typically use NFT-based loans to produce greater profits than they would from conventional crypto-based and regular loans. Nevertheless, in NFT lending, borrowers must place a lock on their NFT assets in order to obtain loans. The release of a variety of NFT lending protocols into the market validates the significance of this particular market and it’s expected for more innovations to be birthed and use cases unlocked. To know more about NFT lending, check our article on NFT financialization.
Soulbound NFTs
The idea for soulbound NFTs was initially initiated by Vitalik Buterin. Soulbound NFTs were inspired by the non-tradable soulbound items in World of Warcraft. The concept underlying soulbound NFTs is the same – once they are delivered to a recipient, they can no longer be sold.
The ability to readily verify and track an NFT back to its owner makes it ideal for keeping sensitive personal information. This also outclasses written paperwork, which is frequently lost, misplaced, or stolen. Soulbound NFTs are always transparent and they are simple to find because of the immutability of blockchain technology. Medical records, criminal histories, career histories, and many other types of data can all be used with soulbound NFTs.
NFT Perpetuals
NFT Floor Perps have been a concept since 2021, when Dave White of Paradigm (famous for the Art Gobblers) explained how they could function.
However, the NFT market at the time lacked the volume and solid sufficient collections to meaningfully support them. With the value of NFTs reaching over $21 billion in total value as of 2023, they can now be traded as perpetual contracts rather than being purchased in the traditional manner in the hopes that their value will rise.
A NFT holder, for instance, may go long an NFT Perp with a particular amount of collateral if they believe the price of the NFT will rise. The quantity of NFTs that the holder wishes to “Long” or “Short” in this situation determines the yielding amount of the perp deal.
Marketing products via NFTs
The lure NFTs has created an exciting market and opportunities for product owners and marketing executives. NFTs or collectibles as they are called in mainstream can be used to drive product marketing and sales. For example, McDonald’s, Coca Cola and Adidas have leveraged NFTs to drive product awareness and sales.
Ticketing at Events
NFTs can be used both online and offline as concert tickets, VIP passes, or entrance to exclusive events. It is simple to determine whether an NFT is genuine or not through the transparency provided by blockchain technology. As a result, both ticket boycotting and counterfeit tickets are successfully eliminated.
One of the main reasons people buy NFT collections is to be a member of the NFT community. Through this, users have exclusive access to different perks that are not available to anyone outside the group. In this context, the NFT has served as a gate fee or ticket to join the community.
Closing Thoughts
NFTs have without doubt expanded greatly, finding strong use cases in our everyday lives. A lot of technological innovations are making use of NFTs which is resulting in the mass adoption of blockchain by many industries. With this current trend, NFTs will increasingly become embedded in our everyday lives.
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