NFT is the new value in the world of digital assets. People like to hold and trade for this digital because of its various utilities. In 2021 alone the NFT transaction jumped from $82 Million to $17 Billion showing how much people are into this market.
NFT creators try to create utilities for their projects to attract more people to the project. It might seem easy but it isn’t, creating NFT utility requires research and innovation towards the demand and how it can help create an impact on the NFT community.
Before we start discussing the NFT utility it is important to discuss what is NFT utility and how various NFT creators create different utilities for their NFTs.
NFT utility certainly improves the worth of one’s NFT project and makes it appealing to the community members to own their NFT.
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Table of Contents
- What Is NFT Utility?
- How Can More Value and More Use Increase Utility Of Your NFT?
- How Can You Add Utility To Your NFT Project?
- 15 NFT Utility Ideas For Your Project:
What Is NFT Utility?
NFT utility is the same as the utility of any other good. NFT utility is the use or utilization of the NFT by the person who owns it.
It is like a knife has the utility to cut, a dollar has the utility to buy you things that are worth one dollar. The same goes for NFT, Its utility is its acceptance and privilege the holder gets when he has it.
NFT utilities can be of various types and kinds and are certainly based on their purpose and their type. Every NFT type has different utilities. For example, Music NFT has a different utility as compared to Art NFT.
Here the question arises, how can an NFT creator create value for its NFT. We will try to answer this question by discussing NFT utility ideas and how they can help increase the worth of an NFT.
You can increase the utility of your NFT project by following a simple formula.
If your NFT idea has the following features it certainly has higher utility.
- More Use
- More Profit
- More Benefit
How Can More Value and More Use Increase Utility Of Your NFT?
We need to understand that the things which increase NFT utility are not necessarily associated with the NFT in fact most of the factors that increase the utility of NFT projects are dependent upon external factors. The fact that the NFT is useful elsewhere is what affects the NFT utility.
The best example that fits with the useability of an NFT elsewhere is Twitter.
Recently Twitter has restricted users to put NFT as their profile picture if they have sold it. It prevents the person from using the NFT as their profile picture if he has sold it and allows the person that owns it now.
This is how NFT utility increases as it brings more value to the token because of its useability and certain privileges to the owner.
As per Jeffrie’s report, the NFT market will be around $80 Billion by 2025, which shows how rapidly the value of NFTs is increasing globally.
How Can You Add Utility To Your NFT Project?
Adding utility to the NFT project is often considered to make it useful, acceptable, and rare. NFT creators use multiple utilities to their tokens to sell them and attract people to own them.
Every NFT has a smart contract attached to them that helps it have art and utility both. At OpenSea alone almost 250,000 people trade NFT every month this shows how much people are interested in NFT trading attracted by various utilities.
To understand it further first we have to understand the difference between tangible and intangible ownership completely changes the idea of how utility with the artwork. Same as tangible and intangible ownership we have tangible and intangible benefits.
Tangible Benefits Of NFT Token:
When we talk about tangible benefits it refers to the benefits that one can hold.
- Ownership of collectibles worth money
- NFT merchandise and goods that you can physically hold
- Community access to rare and unattainable things
Intangible Benefits Of NFT Token:
- Connect people in communities (like-minded people)
- Develop social status for the token holder
- Emotional satisfaction
15 NFT Utility Ideas For Your Project:
- Events & Giveaways
- Fractional Ownership
NFT creators offer various merchandise along with NFT tokens. The merchandise is sent to the NFT owners. NFT merchandise is a great attraction for the members as it creates unique artwork on them along with other attractive traits.
Moreover, merchandise also helps community members connect with each other. You can identify the members of your NFT community by seeing the person wearing that merchandise.
Rebel Rabbit is a popular example of merchandise utility. This NFT token offers a hoodie with its logo on the back. Moreover, this hoodie has the wallet address on the back to encourage other people to join the community. This merchandise attracts more people to mint the token.
Metaverse is the biggest NFT utility that is attracting more people to the community. Metaverse is a digital verse where people can purchase land and have their daily chores as people do in their everyday lives.
NFTs have higher utility in the Metaverse. NFT projects that are usable in the Metaverse in exchange for virtual property, and other skins and avatars have higher utility and are in demand.
Metaverse also uses NFT as a token and its virtual currency and access pass to the metaverse.
Metaverse in itself is the best example of buying and selling virtual real estate using the token.
Every creator and artist has the right to get a reward for their creation and artwork. This is what NFT royalty does.
On this digital NFT spectrum, NFT royalty paved the way to honor and value their creator by paying them 10% every time when a copy of their work is purchased.
These royalties have a great impact on the interest of users to create more innovative ideas on the NFT platform.
But sometimes due to lack of transparency or because the owner hasn’t registered his work properly he loses hundreds of dollars. This is called unallocated royalties.
Donation is another popular NFT utility. Under this utility, NFT creators associate a certain percentage of profits and royalties to be distributed among different non-profit organizations and charitable funds. People who want to contribute to the community cause are attracted to this utility.
NFT donation utility is advantageous in way that if you donate through NFT it will take care of all monthly maintenance and manage the day-to-day charity operations.
NFT blockchain technology records all your transactions publically, which secures your tokens and your money from scams and frauds.
Now it becomes easier to donate through NFT than directly donating to a non-profit organization.
Moreover, it also provides and honors the donor with an appreciation token.
Creepy Creams is an NFT project that supports and does charity to children causes. For every NFT token purchase, they do charity. Creepy Creams also decreases the floor price to allow more people to buy the token and contribute to the cause.
Rarity is another popular NFT utility that increases the worth of an NFT. This NFT utility can be driven by the following important factors.
- Transaction details
- Number of tokens in a particular mining
- Number of tokens transferred in a particular mining
- Number of tokens traded
- Number of tokens in circulation
The NFT rarity utility is useful in giving all the minor details about tokens. From the owner, the number of tokens a person owns, and from where did he buy it.
Rarity is the most popular NFT utility as everybody wants to have something unique and rare and this is what drives the value of an NFT token. The rare the token the higher its value will be.
CryptoPunk #5822 is one of the rarest NFTs that was sold for 9,000 Ethereum in February 2022. There are only 9 of these tokens in circulation makes them super rare and super expensive.
6. Events And Giveaways:
NFT creators create new events and new giveaways to create more NFT utility for their tokens. NFT giveaways attract more people to mint and buy the NFT token to have more utility and use in the market.
To get NFT giveaways the person has to mint an NFT token from the project in return he gets more tokens for free. Some NFT creators offer giveaways to their discord server members and Twitter followers.
Giveaway NFT utility provides:
- Lifetime passes to annual events.
- Seasonal tickets
- Giveaway a free NFT token once a month.
- Invitation to dinner with a celebrity
An NFT project named Lucky Block giveaways $1 Million in cash and a Lamorgini to community members. Only because of such generous giveaways more people are attracted to the community.
When it comes to NFT utility people use multiple techniques and ideas to create more utility for their NFT token.
Vote utility is another NFT utility that helps the person owning the token to vote for certain organizations and communities. It allows only a certain community to be able to vote for a certain role.
This unique idea helped many NFT creators to develop a utility for their tokens. The vote utility also helps the creator to target a certain group of people that are interested in this utility thus the rarity remains there with a new NFT utility idea for the token.
The breeding utility is a new and attractive idea as it seems very confusing when first heard. How can a person or a creator breed NFTs? Yes, it is possible, some NFT creators come up with the idea that by combining two NFTs you can breed a baby NFT.
By offering this NFT utility NFT creators make their holders combine NFTs and breed them together. This idea works on the blockchain where two NFTs are combined to form a baby NFT that grows to be a full adult NFT token.
This idea was successful in attracting more people to mint the token.
CryptoKitties are an example of breeding NFT utility. Where a user can breed an NFT by pairing two NFTs..
Merging is the same as breeding but in the end, you do not get a baby NFT taken, instead you get a new NFT by merging two NFT tokens. This NFT utility makes NFT holders combine two NFTs into one that has the worth of two NFTs.
People who own multiple NFTs are attracted to this NFT utility idea as it helps them manage their NFT wallets. This NFT utility idea allows users to combine similar NFT tokens into one token that has all the same features and utilities of the NFT and is worth two.
Moreover, you can merge many low levels of NFTs into one higher level NFT with more features and value.
Burning NFT utility has its usage as it allows owners to use the NFT in exchange for the token with a product, service, or any other thing in return for burning the NFT. Burning NFT means that the token was removed from the blockchain as it does not exist.
This NFT utility idea is best for consumable NFTs as it allows users to redeem the token for any product or service within the NFT community or outside of it based on the NFT project.
11. Fractional Ownership:
If you don’t have enough money to buy a whole NFT token then you can own a portion of it, This is called the fractional Ownership utility of an NFT.
- This NFT utility idea allows users to own a fraction of NFT instead of buying the whole token.
- This utility idea allows people with low affordability to trade the NFT.
NFT projects that have this utility have more transactional volume and more minting as more and more people are getting into the tokens.
Moreover, it diversified the NFT holdings into many people rather than saturated ownership increasing diversity in the NFT community.
With more peers getting into the NFT transaction the worth of NFT certainly increases.
The Doge NFT is a good example of this utility where many people can own a single NFT by owning a fraction of a token.
Staking utility refers to collecting a certain type of token and locking them up in a pool to earn rewards. This unique NFT utility attracts collectors that can stalk a certain type of tokens into huge pools where NFTs are no longer available for trade instead they are stalked to earn rewards.
Instead of earning through NFT tokens at price appreciation, this NFT utility allows the owner to earn stalking rewards and benefits by keeping the ownership and earning benefits from the NFT.
STALKER 2 is a popular example for this utility where the game allows users to stalk their NFTs in various assets and earn from the stalking.
Gaming is the newest and most used NFT utility idea nowadays in the gaming community. Gaming NFT tokens are associated with various gaming platforms to increase the NFT utility and use in purchasing various avatars and skins. It also allows NFT holders to redeem NFT tokens to buy things in the game.
NFT token gives users access to enter certain levels using the NFT and utilize the token in attaining several premium subscriptions. Gaming utility certainly increases the NFT utility for the gaming community to get premium services and things in the game.
Ape Coin is one of the most used NFTs for gaming. The NFT is used to get new skins, avatars, weapons, and other things in the game.
Some NFT tokens have the utility that they can be used for gambling purposes. NFT creators develop such utilities that help owners to get premium access to casinos and gambling centers. Instead of earning and winning in cash users get NFT tokens in return which are used to get rewards.
Stories is a popular gambling NFT that is used to gamble. It provides services in 150 casinos worldwide. There are only 10,000 Stories members every mined, and this keeps them rare.
NFT tokens are certainly an investment for the creator and the person putting their hard-earned money into it. That makes this point clear that investment is a popular NFT utility idea.
The minting of tokens on the blockchain is done to earn a return on the money invested in it. By selling on price appreciation along with rewards and other types of benefits.