Adding utility to NFTs is a great way to market a collection while rewarding the community. Ultimately, it provides perks and practical applications that extent passed the basic form of NFTs.
This can be anything from event passes to exclusive merchandise there are several great ideas that creators can integrate.
In this article, I will be covering 7 examples of NFT utilities. So without further ado, let’s jump right in.
How to add utility to NFTs?
The utility can be provided by rewarding NFT holders with various perks. Essentially, it can be added by integrating practical applications that extend past the representation of being unique digital assets. For instance, creators can allow NFTs to act as digital passports that grant access to exclusive events.
1. Metaverse utility
Firstly, NFTs are a great compliment to the metaverse. In essence, they are digital contracts that create scarcity in the digital world. This is extremely important for creating vibrant and functioning economies.
Regarding utility, NFTs can be used as digital passports to navigate these virtual worlds. This creates exclusive communities that facilitate the interaction of like-minded people.
Moreover, they can act as contracts for virtual goods and services. For instance, they can be used as proof of purchase for parcels of land and unique collectibles. Additionally, they can foster a virtual identity with creators granting various avatars to holders.
2. IRL event access
NFTs can act as tickets to various physical events. One notable example of this utility is the project Bored Ape Yacht Club.
Holders are granted access to the week-long festival Ape fest. This New York based event featured musical acts with the likes of Lil Baby and Timbaland. Moreover, it had standup comedy performances from Chris Rock and Aziz Ansari.
Ultimately, they act as proof of purchase, and thanks to the digital form this minimizes the risk of losing it. Moreover, blockchain technology means they can be easily verified.
3. Offer merchandise
This is a popular use case for NFTs. Often projects reward NFT holders with merchandise. For instance, the NFT project Okay Bears gave out wristbands for token holders. The NFTs act as the receipt.
This is great for building a brand around NFT collections. Products can bear the logo which helps with promotion. Here are several examples of merchandise options:
- Wall art
- Virtual collectibles
4. Host airdrops
Essentially, airdrops are free rewards that are transferred directly to community members’ crypto wallets. In the case of Bored Ape Yacht Club holders were airdropped a mutated version of their avatar.
Oftentimes, airdrops can be used as rewards for loyal and active community members. For instance, if users contribute artwork and promote the project they can be awarded exclusive NFTs. This encourages participation and is a great marketing tactic for creators.
5. Provide voting rights
NFT projects can add utility in the form of voting rights. This creates a community-owned blockchain platform that is democratic and fair.
In essence, the NFT allows users to vote on various proposals that ultimately shape the development of the project. For example, the community controls the treasury and can decide on the fee structure of the project.
Moreover, this solution is great for organizing people across geographical locations and removing intermediaries.
NFT holders can be given utility via whitelists. Simply put, whitelisting is a reservation for an upcoming NFT release. In essence, if you are on this list you are guaranteed to mint on launch. You can view it as a VIP treatment for community members.
This approach rewards holders of previous NFT collections while also promoting the project ahead of launch.
7. Grant access to digital content
Although simple this is a great way to offer entertainment and commercial value to the community. Unique videos or music can be created for token holders.
Thanks to blockchain technology they can then be traded on the open market. Moreover, these assets foster an active community as they can be used as status symbols and shown with pride.
Not to mention, royalties can be programmed into them that provide a passive income source for creators.
If you want to view this article in video format then check out my video below:
As you can see, there are many ways to add utility to NFTs. From merchandise to voting rights the opportunities are endless. Moreover, as this novel technology continues to develop its utility will only get better. I hope you found this article useful and thanks for reading it.
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