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A surge in crypto-collectibles and non-fungible token art has resulted from blockchain solutions development for various industries. These are two of the most well-known apps in the DeFi ecosystem, but they are far from the only ones. Non-fungible tokens are a suitable match for real-world assets, logistics, music royalties, and more because of their scarcity and uniqueness. As the NFT trend becomes more mature, we may see more experimental use cases adopted.
NFT Use Cases Beyond the Hype
It was extremely difficult to create digital scarcity for assets before non-fungible tokens. Even though copyright safeguards are in place, customers can easily duplicate or pirate digital artwork.
Crypto art and digital collectibles use cases have been made possible by the invention of NFT, but it doesn't end there. NFTs can be used to confirm the authenticity of a wide range of unique and collectible commodities, from real estate to logistics.
While the NFT ecosystem is still in its early stages, there are several intriguing initiatives to investigate, some of which are already providing significant value to creators and consumers.
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Fintech NFTs
It's easy to overlook the fact that not every NFT is based on a song, painting, or collector item. NFTs also bring distinct financial benefits in decentralized finance (DeFi). Most will have some artwork as well, but their worth is determined by their use.
JustLiquidity, for example, has an NFT staking scheme. A user can stake a pair of tokens in a pool for a set length of time in exchange for an NFT that allows them to access the next pool. The NFT functions as an entrance ticket and is discarded once you've entered the next pool. Because of the access these NFTs provide, this paradigm creates a secondary market for them.
BakerySwap's NFT food combos, for example, generate greater staking incentives for holders. You get an NFT combination with a variable amount of staking power when you contribute BAKE. Users can bet on these combinations, sell them on the secondary market, or stake them. The combination of non-fungible tokens, gamification, and DeFi results in an intriguing use case for non-fungible tokens.
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Digital Art NFTs
One of the most difficult obstacles for digital artists is copyright infringement, but NFTs provide a solution since they provide proof of ownership, authenticity, and minimize counterfeiting and fraud concerns. As museums and galleries collapse in the face of COVID-19, many artists have moved to NFTs and online showrooms, according to a CoinDesk report.
SuperRare, MakersPlace, and Rarible are examples of digital art platforms and marketplaces. These systems and marketplaces work similarly, allowing users to simply create original digital artwork and sell it on their site. Rarible is a particularly fascinating example since it combines digital collectibles with yield farming and liquidity mining to create one of the most exciting DeFi trends of 2020. They were able to do so by creating the $RARI governance token.
One of the reasons for the heightened interest in NFTs in the last months of 2020 has been this adoption approach. When users sell and trade their NFTs on the platform, they are compensated and incentivized with Rarible's governance token ($RARI). As a result, Rarible is a community-run marketplace that aspires to be decentralized.
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Entertainment NFTs
You can link audio to an NFT in the same way that you can connect an image or video to make a collectible piece of music. Consider it a digital "first edition" of a song. Adding music to an NFT is comparable to adding art to an NFT, but there are other applications.
Getting a fair portion of royalties is a major concern for musicians. However, blockchain-based streaming services and blockchain royalty monitoring are at least two options for achieving a balanced result. For tiny blockchain projects, competing with Amazon Music or Youtube for streaming services is difficult. Even when a behemoth like Spotify bought MediaChain, a blockchain royalties system, there were no significant benefits for artists.
Smaller projects, on the other hand, have tended to work primarily with independent artists. On the Binance Smart Chain, Rocki provides a platform for independent musicians to sell royalties and stream their songs. Using the ERC721 token standard, their first royalty NFT sale on the platform raised 40 ETH for 50% royalties.
The adoption of this strategy by larger streaming services will determine whether it becomes more popular or not. Combining music and NFTs is a fantastic idea for a use case, but it may struggle to get traction without the help of record labels.
Also, Read | A Quick Guide to Ethereum ERC Token Standards
Collectible NFTs
There's a huge market for digital collectibles, whether it's a PancakeSwap Bunny or a Binance Anniversary NFT. With the NBA NFT collectible trading cards NBA Top Shot, this use case has even made it into the mainstream.
These non-fungible tokens, together with digital NFT art, provide for a large chunk of sales on NFT markets like Opensea, BakerySwap, and Treasureland. With crypto art, there's a lot of crossovers, and an NFT may be both a collectible and an artwork. These are the most advanced use cases we currently have.
The first tweet by Jack Dorsey is a great example of an NFT collectible. While a CryptoPunk is collectible and artistically appealing, Dorsey's NFT is valuable solely for its rarity.
Dorsey used Valuables, a platform that tokenizes tweets, to sell the NFT. Any tweet can be used to make an offer. Anyone can come in and outbid you with a counter-offer. The tweet author then has the option to accept or reject the offer. If they agree, the tweet will be minted on the blockchain, resulting in a one-of-a-kind NFT with their signature.
Each NFT is signed by the verified creator's Twitter @handle, ensuring that only the original author can mint NFTs. This method creates a digital, limited-edition item that can be traded or kept. Selling a tweet is a difficult notion to grasp, but it's a perfect example of how NFTs promote collectibility. It's essentially a digital replica of a handwritten signature.
Conclusion
With the popularity of NFT growing, there's a good chance we'll see even more ideas and use cases in the future. Currently, all use cases for NFT can go beyond an idea or a small project. Some may turn out to not be practical or popular. However, for more fundamental and straightforward issues, like the scarcity of art and collectibles, NFTs are certainly here to stay. Connect with our NFT development experts for more information.
