Utility NFTs: The Rising Digital Revolution Transforming Industries Utility non-fungible tokens are not merely a passing fad, but a significant force reshaping industries from entertainment and art to fashion, real estate, and gaming.
By Pierrick Ribes Edited by Aby Sam Thomas
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As we surf the tidal wave of digital innovation, utility non-fungible tokens (NFTs) are gaining traction in the world of blockchain. Unlike their speculative predecessors, these digital assets on the blockchain aim to provide unique functionalities and real-world applications. They're not merely a passing fad, but a significant force reshaping industries from entertainment and art to fashion, real estate, and gaming.
How Utility NFTs Took Over The Internet: The Bored Ape Yacht Club
Ever heard of the Bored Ape Yacht Club (BAYC)? If you're scratching your head, think of it as the equivalent of a mega-rare, super cool Pokémon card, but on the internet, and instead of a cute little creature, it's an ape with attitude! There are 10,000 of these unique, funky apes out there, living their best digital lives on the Ethereum blockchain.
Source: Lucidity Insights
The brains behind these apes are the elusive Yuga Labs, who launched BAYC in 2021, and shook the NFT world like a snowglobe. Soon enough, everyone wanted in on the action. We're talking everyone from basketball legend Stephen Curry to music maestros Eminem and Snoop Dogg, to talk show host Jimmy Fallon. Owning a Bored Ape became the cool kid badge of the internet- a digital collectible with some serious value.
So, what makes a Bored Ape more than just a funky profile pic? It's a killer combo of exclusivity, utility, and a sense of belonging. Each Bored Ape is like a snowflake- unique in its own right, with different features and attributes. But owning one doesn't just make you just the proud parent of a digital ape. It's like a golden ticket to the Willy Wonka's factory of the NFT world. You get exclusive access to a private Discord group, where you can rub virtual shoulders with fellow Bored Ape enthusiasts. You even get a say in the ApeCoin decentralized asset organization DAO governance decisions, as well as an invite to the hottest metaverse parties.
Yet, BAYC is just one of many examples of how utility NFTs are transforming industries. Let's talk tunes, folks!
Owning Royalties Of Your Idols: Utility NFTs In The Music Scene
The music scene is getting a fresh coat of paint, all thanks to utility NFTs. In the good ol' days, the industry was riddled with shady contracts and crumb-sized royalties. But today? The game's changing, and it's music to our ears. Imagine your favorite artists, from Kings of Leon to Rihanna, not only dropping beats, but also offering you a slice of their success pie.
Source: Lucidity Insights
That's right- with utility NFTs, artists can bring their fans closer than ever before, by releasing their music as NFTs. And it's not just about listening to their latest album- it's about owning a stake in it! As fans, we get to groove to the music, and enjoy the sweet feeling of having a stake in our favorite artists' success.
Utility NFTs are also able of bringing more fairness and transparency to the world of music. Ever heard about musicians struggling with unfair contracts, or losing out on royalties? Well, with utility NFTs, the script has the potential to flip. In 2016, Imogen Heap's experiment demonstrated to the music industry that a fairer and more efficient industry was possible by showing the "transparency and real-world benefits of smart contracts with automated royalty payments to all stakeholders."
Now, creating and buying these musical NFTs requires some techy magic, and that's where platforms like Royal and AnotherBlock step in. These guys are like the backstage crew of the music industry, facilitating the creation of tokenized music rights for artists.
This means fans and investors can buy real royalty rights -and earn some moolah- when those tracks are streamed on platforms like Spotify and Apple Music. Musicians worldwide can harness the power of NFTs to reclaim their rights, offering fans new ways to engage with them and their work.
From Concept To Screen: Coinrunners And The Innovations Of Utility NFTs In The Movie Industry
The world of cinema isn't far behind. Coinrunners, a work-in-progress movie, employs NFTs to fund its production. But it doesn't stop there. Owning a Coinrunners NFT not only supports the film, but also rewards investors with exclusive benefits. These include the opportunity to be part of the movie, a share in the film's royalties, and access to unique, hand-drawn, tokenized images crafted by renowned Hollywood storyboard artist Max Forward.
Lisa N. Edwards, producer, Coinrunners. Source: Lucidity Insights
Lisa N. Edwards, the creative force behind Coinrunners, articulates the transformative power of NFTs in the film industry as follows: "There's a new paradigm emerging where creators can own and monetize their content directly. Movie NFTs with royalties like Coinrunners are at the forefront of this shift, giving filmmakers and studios a new way to engage with audiences, and generate revenue streams that are more direct, transparent, and sustainable than traditional funding models. Essentially, this puts the power back with the people, to fund what they want to watch. Audience-driven films are the way of the future."
Coinrunners exemplifies how utility NFTs can foster deeper connections between creators and fans, reimagining the film industry's funding models, and promoting a more direct, transparent, and sustainable approach to movie making and consuming.
Related: Inside The Artist's Mind: Sacha Jafri On Making Art, Building Something Meaningful, And, Yes, NFTs
Bid Farewell To Ticket Scalpers: Enter The Future Of Fan Experiences With Utility NFTs
Now, imagine you're a musician or an event organizer. What are two things that might give you a serious headache? One, those pesky ticket scalpers who snatch up tickets, and then sell them for an arm and a leg. Two, figuring out how to give your fans an experience they'll never forget.
Enter YellowHeart. This Web3 trailblazer is kicking oldschool ticketing to the curb with a secure, decentralized approach that leaves no room for scalpers or fraud. But they're not just about selling tickets.
YellowHeart is helping artists and organizers connect with their fans like never before. They're turning concert-goers into die-hard fans, and helping artists tap into that sweet, sweet revenue from ticket resale and collectibles.
Established platforms like Ticketmaster are also launching NFT services to provide artists and event organizers with an additional revenue stream and fan engagement through the sale of digital collectibles, merchandise, and experiences.
Gamers Turned Traders: Exploring The World Of Valuable In-Game Assets Through Utility NFTs
In the world of gaming, utility NFTs are revolutionizing the way we experience virtual adventures. These special items, like unique weapons and characters, have real-world value, allowing gamers to earn and trade them for actual money. It's like turning your gaming achievements into a valuable treasure trove! Game developers are now creating NFTs that represent unique in-game assets. Imagine owning a mythical sword or an ultra-rare character that not only enhances your gaming experience, but also has real-world value.
Here, you might ask: "Where can I buy or trade these incredible digital assets?" Well, allow me to introduce you to OpenSea.
Source: Lucidity Insights
OpenSea, which kicked off in 2017, is like the Amazon of the digital world. It's the biggest digital marketplace out there for NFTs and crypto collectibles. The numbers speak for themselves: OpenSea boasts more than 2.8 million unique users who've made at least one transaction, and a staggering $34 billion in transactions to date. This user-friendly platform has made a name for itself by providing a seamless experience for buying, selling, and exploring an extraordinary array of unique digital assets.
On the gaming side, one of the best examples leveraging NFTs is Alien Worlds. It has a community of over 2.5 million users who are on an intergalactic quest across seven planets. These adventurers use NFTs to mine Trilium, the game's native cryptocurrency. Alien Worlds is a play-to-earn game where gamers can amass Trilium through various activities, such as mining, battling, questing, or even collecting rent from your digital land. Gamers can convert their in-game Trilium into real-world cash! In short, utility NFTs are completely revolutionizing the gaming world, making our virtual exploits not just more exciting and personalized, but also potentially profitable.
But utility NFTs aren't just limited to the gaming and the media and entertainment industries. They have the potential to be used across a range of industries, from art and fashion to real estate.
Utility NFTs In Real Estate: Streamlining Transactions And Ownership Verification
Utility NFTs can also be used to verify ownership of physical assets, such as property deeds.
The traditional process of verifying and validating real estate ownership can be incredibly cumbersome and time-consuming, due to the involvement of multiple intermediaries, such as banks, real estate agents, negotiators, and government officials. Moreover, these middlemen often charge substantial commissions, further burdening property owners. By implementing NFTs, real estate transactions and ownership transfers can be streamlined into a direct, two-party process, eliminating unnecessary intermediaries. This not only simplifies transactions, but also enhances efficiency and reduces costs.
Transforming The Art And Fashion Industry: Exclusive Access And Supply Chain Transparency
Utility NFTs can also be used in the world of art and fashion, where they can be used to provide exclusive access to content, like backstage passes, or very important person (VIP) experiences. In this way, utility NFTs are not just digital assets, but they also act as a gateway to real-world experiences.
Source: Lucidity Insights
Fashion brands have also started to use the power of blockchain to provide transparency, traceability, and accountability around supply chain. As an example, Genuine Way works with consumer brands to aggregate supply chain and relevant environmental, social, and governance (ESG) data on several public blockchains, supporting them in vertically communicating these key performance indicators (KPIs) to consumers in an engaging way.
The company provides an "all-in-one traceability solution for consumers, powered by complex data collected in the different phases of the supply chain, and displayed in accordance with the latest European Union (EU) directives and national laws pertaining to supply-chain, processes, and production." It is piloting the solution with the likes of Tommy Hilfiger, which "leverages the data collected on their partner's software (The ID Factory) to generate vertical product interfaces for its consumers."
Utility NFTs are bursting with potential, poised to revolutionize industries, and reshape how we interact with both digital and physical assets. While the road to widespread adoption may be bumpy, the excitement and curiosity surrounding these versatile tokens are undeniable. As we embrace the world of Web3, utility NFTs will likely play a significant role in the decentralization of ownership, and democratization of access to goods, services, and experiences. So buckle up, dear reader- this is just the beginning of a wild and exciting ride into the future of NFTs!
To dive deeper into the future of Web3 and the decentralized web, read our full report on Opportunities in Web3 by clicking here.
This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.
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