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What are the NFTs used for?
Far beyond trends, in this article we bring you examples of NFTs applications in diverse industries
In our article ‘The meaningful power of NFTs’, we explain that we should consider the so-called non fungible tokens as tools to identify an asset in an unequivocal, secure and certain way.
Created on blockchain, NFTs are a kind of certification of authenticity and traceability. In the words of Pilar Troncoso, Professor of Blockchain and Digital Innovation at Instituto de Estudios Bursátiles, “each place where a digital element that certifies the ownership is needed, is a niche in which NFTs will prove their potential.” Almost every area of the economy, and of our lives, needs a proof of ownership.
Until now, we have been hearing about feverish projects that do not show real benefits for our daily lives or for the progress of our business. Many people ask: What is the point of CryptoPunks and Bored Apes apart from having a digital artwork as a profile pic?
It is fundamental to look further and value the non-fungible tokens ability to represent any digital asset. Because of this ability, NFTs are useful and relevant in very different fields, not just arts, but also in gaming, fashion, film, music, journalism, real estate or financial industries.
"While everybody is talking about the NFTs bubble, something is being cooked up in other fields, such as ticketing, university certificates, second hand market, luxury, finance and others,” says Troncoso.
In fact, the investment bank Jefferies expects the NFT market to reach more than $80 billion in value by 2025. The bank raised its market-cap forecast to over $35 billion for 2022 and anticipates double-digit percentage growth for the next five years.
Transparent traceability in production and supply chain
Non-fungible tokens allow companies to trace each element and part of it. Tokenization through blockchain helps to foster traceability in a unique way.
For instante, the Argentinian company Carnes Validadas, started to take advantage of the NFTs benefits in 2019. With NFTs, it identifies unequivocally its animals and guarantees the traceability for the entire production process, providing the customers with a complete record of the piece they are going to consume: from the cow that calved the calf to the place where the meat was vacuum-packed. All this information is accessible through a QR code.
Besides that, the animal features, such as weight, dietary, health conditions, etc, are recorded in the NFT. This adds a differentiating advantage when selling cattle to a new owner or when offering it as a collateral to get a loan.
NFTs for finance
Using a non-fungible token as a collateral to get a loan is one of the possible applications thanks to the development of decentralized finances (DeFi), a peer-to-peer financial system. The DeFi ecosystem includes a broad network of integrated protocols and financial instruments, from lending and borrowing platforms to stablecoins and tokenized BTC.
Proof of ownership, certainty, transparency, security, immutability… These attributes convert NFTs into key enablers in the financial sector. And theories of DeFi have already been translated into action with a wide range of use cases for individuals, developers, and institutions.
Beside stocks tokenization, we can envision crypto-exchange without centralized players or market makers, and even consider digital bonds directly issued in blockchain.
NFTs in the industries of Art, Culture and Entertainment
NFTs became popular for their applications in the Art Industry. The ability to guarantee the authenticity of an artwork was key for that. Unlike fungible assets, that are interchangeable and expendable, each NFT is unique and can not be eliminated, altered or counterfeited.
A 10 Euro bill has the same value in any wallet, it is interchangeable. On the contrary, the Sunflowers hanging on many living rooms and the Sunflowers exhibited at the Van Gogh Museum in Amsterdam are not exchangeable. Therein lies the essence of NFTs.
A new way of understanding art ownership has emerged with NFTs. Due to their nature, digital artworks can be imitated and replicated. NFTs do not avoid reproductions or copies, but they serve to authenticate and verify the ownership and authorship of a specific work.
Artists have in non-fungible tokens an opportunity to increase their incomes. Individuals and communities see in the NFTs a new way of investment. In a similar way, the use of NFTs has expanded in the music and content industries. NFTs are bringing new kinds of interaction between creators and consumers or fans.
In the publishing world, authors can directly sell their books. Beside that, NFTs also add traceability of the use made of the book and opens a wide range of possibilities to fidelize the readers. For instance, let us think of the tokenization of a book signed by its author, it has an additional value compared to the non signed copy.
In the sports field, NFTs have become famous among football and basketball teams and stars. If traditionally, fans dreamed about a ball or T-shirt signed by their favorite player, today they aspire to NFTs with access to contents, exclusive events and other ways of interaction.
The NBA NFTs marketplace allows users to buy, sell and collect influential NBA scoring moments. LaLiga has found a new income source for the clubs after an agreement with Sorare, a company backed by football legends like Gerard Piqué, Antoine Griezmann or Rio Ferdinand, to sell NFT of the players.
Fans also have another space to interact through the exchange and sale of NFTs.
Monetization opportunities with gaming, video-games and esports
Thanks to NFTs, virtual objects for video-games have an owner and can not be replicated. How often do you buy an element for your favorite game and after a while you get bored of it? What do you do with these digital assets? Thanks to NFTs, users can monetize their “investments” and the industry has another relevant revenue source.
Selling tickets and creation of collectibles
The use of NFTs as tickets to access concerts, sports events, theater shows, festivals or any other venue are really useful to avoid fraud, counterfeiting or resale misuse. Additionally, these NFTs can become collectibles.
Raising funds for charity, humanitarian and political purposes
Nonf-fungible tokens are means to obtain donations. At the end of 2021, UNICEF commemorated its 75th Anniversary launching a collectible of NFTs. The organization offered more than 1,000 pieces on sale through the Ethereum blockchain with the aim of financing diverse projects.
eGoGames, Global Gift Foundation and Shokworks have founded eGoClub, a philanthropic community of NFTs. Alejandro Sáez (eGoGames founder), María Bravo (Global Gift Foundation) and Alejandro Laplana (Shokworks) introduced in New York the new community aimed at “helping thousands of people around the world.” EGoClub was born in 2022 with a first collection of 10,000 NFTs. Called eGos, they are built on Ethereum blockchain employing ERC-721 tokens.
Around the same time, Congressional candidate Shrina Kurani, running for a seat in California's 41st district, launched a collection of 230 NFTs to raise awareness for her campaign and bring attention to climate-friendly Web3 solutions.
Also in March 2022, the Ukrainian Government announces a collection of NFTs with visual artworks about the armed conflict with Russia. Furthermore, NFTs are a way to raise funds to help victims of the war. Many NGOs, like Save the Children, are using NFTs with this goal.
What can we do for you?
At Wealize you will find a team of blockchain experts to help you enhance your business addressing challenges related to digital identity, traceability or financial transparency.
NFT, smart contract, wallet… You will find in us an agile and dedicated ally to develop the digital products you need, from conceptualization to delivery.