Non-fungible tokens (NFTs) are unique and cannot be replicated which offers a range of possibilities for current and future use cases including gaming assets, fashion NFTs, NFTs in DeFi, live events, sports and identity verification. In this blog post, we’ll explore some of the potential applications for NFTs and discuss why they could be a valuable addition to the crypto ecosystem.
In the gaming industry, NFTs are used as in-game items such as weapons, skins, clothing and avatars that can be traded or sold for real-world money. The popular game CryptoKitties allows players to buy, sell, and trade virtual cats that are stored on the Ethereum blockchain. This use case of NFTs has led to the development of an entirely new economy within the gaming industry.
Another way that NFTs can be used in gaming is to reward players for their achievements. This could be done by giving players an NFT for reaching a certain level or completing a quest. The NFT could then be traded or sold on secondary markets. This would provide an incentive for players to keep playing the game and could also generate revenue for the game developer.
If you’re a gamer, it’s likely you’re familiar with in-game microtransactions. These are small purchases that players can make in order to unlock new content or gain an advantage over other players. In recent years, a new type of microtransaction has begun to gain popularity: play-to-earn gaming. Rather than simply paying for in-game items, play-to-earn games allow players to earn rewards by playing the game itself. These rewards can take the form of in-game items, cryptocurrency, or even real-world money.
The game Axie Infinity popularized play to earn gaming and another play-to-earn game that has gained a lot of attention recently is Gods Unchained, a digital collectible card game that uses non-fungible tokens (NFTs). Play to earn gaming is a major breakthrough which proved that games could have their own ecosystem and economy to sustain themselves, solving a major pain point for game development companies who must sustain user interest for as long as possible.
NFTs have been gaining significant traction in the decentralized finance (defi) space due to their unique properties that offer solutions to traditional finance applications. The key features of NFTs that make them attractive for use in defi applications are their tamper-proof nature, ownership verification, and transferability.
On the Ethereum and Flow blockchains, NFTs are being used to collateralize loans and earn interest on them. The popular DeFi platform MakerDAO allows users to deposit NFTs as collateral for loans. NFTs also offer new possibilities for decentralized exchanges (DEXes), synthetic assets, and flash loans as well as NFT-based stable coins.
Overall blockchain technology is revolutionizing finance by making it possible to buy, sell, and trade NFTs. NFT markets give people access to a whole new world of investment opportunities. NFTs can be bought and sold like traditional assets, but they can also be traded 24/7 on decentralized exchanges without a central authority. This gives investors more flexibility and freedom when it comes to their investments. In addition, NFTs offer a new way to raise capital. Companies can issue NFTs to raise funds from investors
In the fashion industry, NFTs are used to create digital versions of clothing and accessories that can be stored on the blockchain. These digital assets can then be bought, sold, or traded like any other NFT. For example, the popular fashion brand Louis Vuitton has created a digital version of one of its iconic handbags that can be stored on the blockchain. Nike was also an early adopter of NFTs creating collections tied to a real sneaker purchase. This use case of NFTs allows fashion brands to tap into the growing market for digital assets and onramp into virtual worlds by protecting their brands and intellectual property with blockchain technology.
In 2020, luxury brand Balenciaga released a digital jacket that could be customized and purchased using an NFT. The jacket was available for a limited time and was sold on the decentralized marketplace Foundation.
In the event industry, NFTs are used to create digital tickets that can be stored on the blockchain. This use case of NFTs allows event organizers to sell tickets that cannot be duplicated or counterfeited. For example, the popular music festival Coachella has sold digital tickets that are stored on the Ethereum blockchain. This use case of NFTs helps to prevent ticket fraud and scalping. Louis Vuitton, proving once again they are a forward looking fashion brand, debuted a digital fashion show that could only be accessed by owning an NFT ticket. The show was shown on the Decentraland platform and featured virtual versions of some of the brand’s most iconic looks.
By issuing NFTs for tickets, concert promoters, brands and artists can create more engagement with fans by unlocking additional benefits such as including backstage passes, meet and greets, photo opportunities, etc. NFTs allow disparate elements in the sales process to be tied together in unique ways and a time element can be integrated.