We’ve heard less recently about million-dollar token purchases. Is the NFT boom over? Not really. In fact, NFTs have gone even further — into industries from art, sports, and gaming to logistics and even wine production.
When we first heard that Beeple’s NFT sold for $69.3 million and CryptoPunk #7523 was bought for $11.75 million, we were too stunned to speak. You probably felt the same.
Meanwhile, the world has got used to hearing news about artists, athletes, and celebrities issuing non-fungible tokens and selling them for big bucks. It’s no surprise that Paris Hilton, Snoop Dogg, and Steve Aoki, for instance, are opening up new revenue streams through the issuance of NFTs.
But are NFTs a long-term phenomenon and can they be applied in areas other than art and show business? Let’s find out!
In brief — what are NFTs?
An NFT (non-fungible token) is simply a digital certificate that represents your right to own a unique asset.
To better understand the concept of these tokens, let’s compare them with cryptocurrencies. Let’s say you have one Bitcoin. If you exchange it for another Bitcoin, there will be no difference as they are interchangeable. However, one NFT is never equivalent to another. Of course, you can still take a screenshot of artwork and save it on your computer, but it doesn’t give you the right to own that digital asset.
In addition to this, NFTs are designed to provide creators with the opportunity they’ve been looking for for ages: they protect their copyrights and ensure they receive royalties on every item resale.
This video covers NFTs from a business perspective. If you still have questions about how to issue NFTs, how much it costs to mint, and how to verify their authenticity, here you will find all the answers.
Top 10 most promising NFT use cases
Tokenized art and game collectibles have made the biggest headlines. These tokens are mostly associated with artwork and games. Yet NFTs are not just about these two areas anymore.
So what else can NFTs be used for? As the tech matures, more use cases emerge: NFTs have now been introduced to logistics, real estate, DeFi, patenting, fashion, and many more industries. Let’s take a closer look at each of these domains and see what exactly non-fungible tokens can do there.
1. Virtual land as NFTs
Virtual real estate and virtual land acquired in the form of NFTs is one of the hottest NFT trends. Have you ever thought about buying a piece of digital land? Probably not, but people are already doing so and paying huge money for it.
For example, in February 2021, a plot of virtual land on the Axie Infinity gaming platform was sold for an eye-popping sum of 888.25 ETH, which at that time was around $1.5 million. The digital property buyer that winter’s day was “Flying Falcon”. The buyer bought the digital estate of nine adjacent Genesis blocks, and shared that Genesis land plots were the rarest and best-positioned plots in the game and they became a natural fit for their thesis.
Crazy or impressive? It’s up to you to decide, but this is today’s reality.
2. NFTs and patenting
NFTs can be also used to patent, and to transfer ownership of patents. With the help of smart contracts on the blockchain, records about patenting and patent holders are created and stored there forever. Any new information about the transfer and use of the patent is added as new blocks. Thus, the establishment of legal rights associated with patents, as well as the patenting of new inventions, become fast, accessible, and transparent.
Nike, a world-famous sportswear company, has secured a patent for “CryptoKicks”. When purchasing a pair of shoes, the customer also receives a token, which is a digital representation of an original pair of shoes. The NFT guarantees the authenticity of the sneakers and identifies their rightful owner. Customers will also have an opportunity to trade tokens just like they might sell their physical items.
3. NFTs in logistics and supply chain
While NFTs are a relatively new trend, blockchain technology has been influential in the logistics industry for quite a while now. TradeLens is a good example here. This blockchain-based supply chain platform introduced by Maersk and IBM has been operating since 2019 and has already tracked more than 1.5 billion events and processed over 30 million containers to date. Thanks to blockchain technology, TradeLens provides unparalleled transparency and efficiency, greater collaboration across supply chains, and secure information exchange.
All in all, blockchain technology in logistics greatly helps with authenticating goods and verifying their origin, thereby preventing counterfeiting. NFTs in logistics can bring another benefit — they are usually assigned to unique items, so can be used to track, for example, luxury goods on their journey to the end consumer.
Let’s say you own a luxury clothing brand and want to be sure that every item is delivered in the right conditions and your consumers receive real designer articles of clothing. In this case, you can choose to assign NFTs to them.
For instance, a collection of gorgeous dresses produced in Italy need to be delivered to a store in the USA. Each of them is assigned its own token, which is also physically placed on the package. By scanning the NFT, supply chain workers can check metadata on the dresses’ origin and track their entire journey. That metadata is timestamped, verified, and immutable, so there is almost no chance that the product will be replaced with a fake, as that would be detected right away.
As the dresses go through each stage of the delivery process, new timestamped metadata is recorded. When the dresses arrive at the store, the NFTs are scanned and the store can check all shipping details and verify the authenticity of the items delivered.
4. NFTs in fashion and wearables
When the pandemic forced the entire world to stay at home and go online, the fashion industry had no choice but to develop new ways of presenting its clothes and accessories online. Fashion weeks and other events were canceled, but the industry wasn’t very comfortable with innovations such as virtual shows and NFTs back then.
However, things changed in 2021. Fashion magazines even call 2021 the year of digital fashion and NFTs.
As of today, there are at least three ways of implementing NFTs in the fashion industry:
- They can be used in the supply chain
- Brands can issue their own fashion NFT collections
- Fashion companies can produce their own NFT games and collectibles
Since we talked about NFTs in logistics earlier, let’s take a closer look at the last two options.
Digital items and collections
Fashion brands can issue and sell their own digital collections. Dolce & Gabbana did just that. The brand created a clothing collection that comes with its own NFTs, and put it up for sale. It was a one-of-a-kind, nine-piece fashion NFT collection called “Collezione Genesi”. Designed by Domenico Dolce and Stefano Gabbana themselves, it included both physical and digital items. The brand sold all its NFT collection at auction for a total of 1,885.719 ETH, which is the equivalent of $5.6 million.
NFT games are on the rise, and the fashion industry is riding the wave as well. Louis Vuitton, another world-renowned brand, has recently launched its own fashion NFT game to celebrate the 200th birthday of the founder of Louis Vuitton. Called “Louis: The Game”, this mobile game follows the journey of the protagonist Vivienne through six worlds to Paris. The game has 30 NFTs that players collect along the way. Ten NFTs were designed by the popular digital artist Beeple.
While there are multiple opportunities to monetize NFT games, this one was created mainly for educational purposes. Michael Burke, CEO of Louis Vuitton, says:
“This is not a commercial experience, but a pedagogical, educational experience that must be fun, emotional, and dynamic.”
5. NFTs for digital identity
Despite advances in technology and the introduction of new ways to protect personal data, identity theft cases are still growing at an alarming pace. According to the US Federal Trade Commission (FTC), there were 398,356 identity theft reports in 2016, and the number skyrocketed to nearly 1.4 million in 2020. In just 4 years, the number of cases has increased 3.5 times.
Identity theft causes huge financial loss. A report by Aite Group tells us that in 2019 identity theft cases resulted in losses of $502.5 billion, and in 2020 this increased by 42% to $712.4 billion.
What can be done to better protect people’s data and help them take control of their own digital identity? NFTs could be one option. They allow people to actually own their personal data in a brand new way. While NFTs in art and gaming can be traded on marketplaces, NFTs for digital identity work very differently. Of course, you can’t sell your diploma, but having your document as an NFT proves that you own it and it is authentic.
Almost any kind of document can be tokenized and represented as an NFT, from licenses, birth certificates and degrees to visas and even COVID-19 vaccination passports. IDs or certificates, which are often issued digitally nowadays, can be issued directly as non-fungible tokens through the blockchain platform.
This doesn’t mean that anyone can access your files. If you need to provide your future employer with proof of your education, you can open access to the documents to a specific person, who can then verify that your documents are authentic.
Thus, using NFTs to digitally store documents and create digital identities gives users the opportunity to better manage their data and helps eliminate document forgeries.
6. NFTs and DeFi
Although it may be difficult to immediately see how NFTs and DeFi can be combined, there are already many real-world examples of how the two concepts successfully work together.
Decentralized finance (DeFi) represents an alternative to traditional financial services. The main advantage of DeFi is that it eliminates the need to turn to intermediaries. This is possible thanks to the use of smart contracts that enable network users to interact directly with each other and perform fast transactions.
As the NFT market grows, NFT collectors are striving to find new ways of capitalizing on their assets. Now, in addition to simply reselling tokens, collectors can leverage their assets using DeFi mechanisms such as lending, borrowing, and staking.
NFT holders can lend their NFTs to borrowers and receive interest. By lending through blockchain platforms, they don’t actually lend real NFTs, but token holders usually offer the full or partial value of the NFT in cryptocurrency.
7. NFTs for real estate
What do we all know about real estate? It costs a fortune, it involves a lot of red tape, and it’s just way too complicated. Taking this into account, there’s clearly an entry barrier for smaller investors and consequently a lack of liquidity.
NFTs in this area could be game-changing, and here’s why:
- They can introduce fractional tokens and, as a result, fractional ownership. This will open doors to smaller investors
- They can be used as registries that clearly define property rights and enable fast and convenient ownership transfer
- They can eliminate the need for multiple intermediaries thereby saving the investor and property owner time and money
For instance, you only have $1,000 and you would like to invest it in real estate. The way real estate works today, it would be completely impossible. NFTs are the innovation that can make it possible, because the property owner can divide the property into tokens and sell them to individual investors.
Real estate is also flooded with endless bureaucratic procedures and middlemen, from agents and financial institutions to lawyers, trustees, and so on. Property tokenization makes it easier to process legal documents and manage real estate transactions. They are conducted directly through blockchain platforms and involve no intermediaries.
While real estate is an industry that doesn’t really welcome radical change, many real estate agencies are already starting to dive into NFTs and consider implementing them.
8. NFTs for the ticketing industry
The ticketing industry has always been a target for scalpers and scammers. Everyone involved in the event suffers because of them — fans spend a lot of money and still cannot enter the site and see their favorite band or sports team, and organizers and performers lose tons of money and probably even fans’ support.
The introduction of non-fungible tokens in the event and ticketing industry brings tremendous benefits to ticket-selling companies. Most importantly, if the company issues tickets as NFTs, the underlying blockchain technology will solve the problem of counterfeit tickets and thereby protect buyers.
The blockchain records information starting from the very creation of the ticket in the system. The information is timestamped, verified, and cannot be deleted, edited, or tampered with, so the NFTs created on the blockchain help the audience verify the authenticity of their tickets and eliminate the chances of getting scammed or experiencing the inconvenience caused by scalpers.
In addition to this, NFTs can represent unique packages and experiences. The ticketing company can issue limited edition NFT tickets with unique designs. Fans can either win them or buy them. These NFT packages could include a meet and greet, a fan signing event, a personal meeting with a celebrity, and so on.
9. NFTs in loyalty programs
Capitalism and competition force companies to constantly innovate, improve their efficiency, and devise interesting reward plans for their clients. Indeed, today’s shoppers are very used to loyalty programs, and if you think the only way to earn your customers’ loyalty is to offer them a quality product, we have bad news for you.
People love innovation, and if you want to grab customers’ attention by offering something new, you could start with an NFT loyalty program. You can apply gamification techniques: customers download your app, take quizzes about your brand history or current fashion trends, and earn tokens that can later be used as discounts. Your clients can also participate in surveys, thereby helping you to know your market better, and at the same time they earn NFTs themselves.
There can be different perks tied to NFTs — all you need is a creative team and a blockchain developer to bring your ideas to life.
10. NFTs and the wine industry
Counterfeit wines are a multi-billion-dollar problem in the global wine industry. Even serious wine collectors cannot be sure that all the wine in their cellar is genuine. Counterfeit alcohol is not only wasted money, but also a serious threat to human health. Blockchain-driven wine NFT technology can help tackle this issue.
NFTs placed on wine bottles ensure the provenance and authenticity of each bottle on its way to the consumer. When choosing a bottle, the customer can scan the wine NFT and check where it was made and how it was delivered. In addition, the wine company can enable their customers to keep these NFTs and even trade them on marketplaces. This option could be applied to a limited-edition wine.
Let’s not forget that literally anything can become an NFT, and wine is no exception. In fact, it’s already happening. For example, in April 2021, Yao Family Wines, owned by former NBA star Yao Ming, auctioned a bottle of The Chop Cabernet Sauvignon with a “limited edition NFT”.
In July 2021, the Château Angélus winery auctioned a barrel of its wine as an NFT. The token was sold at a market price of $110,000.
Best NFT projects to follow in 2022
2021 is truly the year of NFTs, so much so that Collins Dictionary has even made “NFT” its word of the year. Now that we’ve talked about NFTs and examples from various industries, let’s find out more about the best NFT crypto projects.
Perhaps some of them will inspire you to create new ideas for your own platforms and projects.
The Dematerialised is a Web3 fashion marketplace. Designed for authenticated virtual goods, the platform runs on the Lukso blockchain that is based on the Proof of Stake consensus mechanism. Blockchains powered by this algorithm use 99% less energy than, for example, Ethereum, which currently uses the Proof of Work consensus.
The platform already boasts a number of successful NFT drops. Rebecca Minkoff, a global fashion brand, issued its NFT collection on The Dematerialised in September 2021. Items were priced from $56 to $562 and were completely sold out almost immediately.
The Nouns project is focused on improving the formation of on-chain avatar communities. One of the project’s distinctive elements is that one Noun (NFT character) will be created every day, forever.
Another unique aspect of the project lies in the formation of their own DAO treasury, which collects 100% of the funds from all their NFT sales. The treasury is governed by the founders of the project who will then decide on its future use.
Decentraland is currently one of the most popular NFT projects. It is a fully decentralized virtual world where users can create, buy, and sell land, avatar wearables, names, and other digital assets.
Moreover, it is the users who own this virtual world and literally rule it. This is made possible by the fact that Decentraland has its own DAO (Decentralized Autonomous Organization). The DAO transfers all the rights to control the virtual space to its users.
In November 2021, the platform Tokens.com purchased what is so far the most expensive piece of land in Decentraland’s Fashion Street Estate. A fashion-district hub in a trendy neighborhood was sold to the crypto investor for approximately $2.4 million.
More expensive purchases are yet to come, we guess…
The Aura Blockchain Consortium (or Aura for short) is the first luxury global blockchain system introduced by brands for brands. Its founder group consists of LVMH, Prada Group, and Richemont.
Aura is based on Ethereum and utilizes Microsoft Azure. The platform is designed to improve the luxury customer experience and address common issues such as counterfeiting and reselling stolen luxury goods.
Since each product is assigned an NFT and only participating brands can add new information to the Aura blockchain, every shopper can access the product’s history and be sure that they are purchasing an authentic item.
CrypToadz is a collection of 6,969 NFTs created by anonymous digital artist Gremplin. Behind these NFTs are small amphibious creatures that roam the swampy basin and try to free themselves from the oppressive rule of the evil King.
The project managed to get into the top ranked NFT projects in a very short time. As of December 30, 2021, the entire collection had sales of $179.49 million and a market capitalization of $77.79 million.
CryptoPunks is an industry veteran. Larva Labs, the company behind CryptoPunks, launched the project back in 2017 when very few people knew what NFTs were and many were just discovering blockchain technology.
It’s a collection of 10,000 one-of-a-kind avatars (24×24 pixel art images) with proof of ownership stored on Ethereum. So far the CryptoPunks NFT collection boasts an incredible number of sales and huge value: digital avatars have been sold 19,836 times and their total value was $1.85 billion.
Interestingly, Twitter and Discord are adopting the social norm of having NFTs as avatars, and CryptoPunks are definitely the most popular NFTs for that so far.
The WISeID solution introduced by WISeKey International Holdings offers users the chance to create and manage their digital identities in order to perform secure transactions and protect their personal information.
WISeID users can also secure their email messages, use strong authentication to securely connect to WISeID-enabled services, and apply digital signatures to electronic documents.
The company recently announced that its users can now mint their digital IDs as NFTs on the WISeID marketplace.
NFTfi is an Ethereum-based marketplace that uses NFTs as collateral for loans. Users can either present their NFTs as collateral for a loan or offer loans to others on their NFTs. Users set terms and conditions without intermediaries and perform direct P2P transactions.
Borrowers can receive a loan of approximately 50% of the NFT’s total value, with an annual interest rate ranging from 20% to 80%, depending on the popularity and desirability of the particular NFT. The lender has the right to get back the underlying NFT if the borrower does not fulfill the conditions, i.e. repay the loan and interest on time.
Womplay is a gaming loyalty platform developed by Spielworks. Womplay was launched in 2020 and in 2021 the developer added NFTs to the platform. Before this, Womplay users could earn rewards in cryptocurrency, but now they can earn NFTs as well.
Generally, Womplay uses the play-to-earn model. The users log in to the site, check the games the platform offers, choose one, and start playing. They can also complete daily tasks, pass challenges and participate in Womplay’s referral program to earn more.
Crypto Baristas, launched by Coffee Bros, is the first NFT funded cafe. It comprises 60 hand-written characters created by illustrator Tony Bui and the Coffee Bros themselves.
Owners of the Crypto Baristas project control the so-called Barista Bank – a fund made up of 15% of the project’s revenue set aside. Some of its future potential use cases include supporting charity organizations in the coffee space, enhancing the existing project, or starting a new one.
Despite the diversity of opinions about NFTs, this blockchain-based innovation is here to stay. NFTs have already entered a wide range of industries, from art and gaming to supply chain, ticketing, and DeFi. Just name the industry, and, with almost 100% certainty, you will find NFT crypto projects already implemented within it.
The number of NFT projects and marketplaces is growing by leaps and bounds as more and more businesses discover how NFTs can be applied. We at PixelPlex can give you a hand with your own NFT platform. Contact us and our NFT development team will analyze your business case and create a platform tailored exclusively to your goals.
Don’t miss the opportunity to ride the NFT wave, generate additional revenue, and attract new users and customers.