A utility NFT is an NFT that, unlike regular NFTs, offers the holder direct and intrinsic value by granting access to specific privileges.
Or are they?
Utility NFTs can open up new possibilities, or so they say. That is why this article will explore the following:
- What is a utility NFT?
- What are use cases of utility NFTs?
- What are examples of utility NFTs?
- How to add utility to NFTs.
- Real-world utility of NFTs.
What Is a Utility NFT?
A utility NFT is an NFT that, unlike regular NFTs, offers the buyer direct and intrinsic value by granting access to specific privileges. For example, a utility NFT can:
- Grant access to exclusive items, characters, levels, skins, in a blockchain-based game.
- Unlock premium content, communities, or rewards on a decentralized social network.
- Offer educational resources, certificates, or incentives on a blockchain-based learning platform.
Use Cases and Examples of Utility NFTs
Utility NFTs cast a surprisingly wide net when it comes to use cases. Some of the common use cases include:
Gaming Utility NFTs
With utility NFTs, gaming can be even more fun. They unlock access to exclusive game items that make the gameplay more rewarding. They can also be used to reward players for their achievements or participation in the game.
Examples of Gaming Utility NFTs
World of Freight
A virtual world where users create, explore, and trade digital assets representing land, buildings, and artwork. Each asset is an NFT providing full ownership and control over virtual property. Users can interact with others and participate in events, making the gaming experience more immersive.
Fashion and Luxury Goods Utility NFTs
Utility NFTs leverage the creation and ownership of digital fashion and luxury items. Furthermore, they can verify the authenticity and provenance of physical items or grant access to exclusive events or experiences related to the brands or products.
Examples of Fashion and Luxury Goods Utility NFTs
A digital fashion house creating and selling limited-edition digital sneakers and accessories. Each item is an NFT granting access to a 3D model usable across platforms and games. Some items also have real-life counterparts. This NFT category creates a new market and economy for digital fashion.
A luxury conglomerate owning brands like Louis Vuitton, Dior and Bulgari. Their blockchain platform, Aura, allows customers to verify product authenticity and provenance using NFTs. Each product NFT grants access to a certificate of authenticity and ownership history, enhancing customer trust and loyalty.
Sports Utility NFTs
Utility NFTs are a way of collecting digital sports memorabilia and fan engagement tools. They can also be used to access premium content, communities or rewards related to sports or athletes.
Examples of Sports Utility NFTs
NBA Top Shot
Fans can buy and sell video highlights of NBA games as NFTs, capturing iconic moments in basketball history. These NFTs create digital sports memorabilia, generating a new market and economy for the sports industry.
A fantasy football game where players collect, trade, and manage digital soccer player cards. Each card is an NFT representing a player's performance and statistics. Players can compete in tournaments and win prizes, enhancing the gaming experience and rewarding achievements.
Web3 Identification Utility NFTs
Utility NFTs are essential to the creation of digital identities or credentials for Web3 applications and services. They protect one's privacy, security or reputation and can unlock rewards related to the identity or credential.
Examples of Web3 Identification Utility NFTs
Users can create and own blockchain-based domain names that are censorship-resistant and compatible with various applications. Each domain NFT grants control over online identity and presence, with access to various Web3 applications and services, protecting privacy and security.
Users create and verify digital identities using blockchain technology. Identity NFTs grant access to services requiring identity verification, such as crypto wallets, bank accounts or voting booths, safeguarding privacy, security and reputation.
How To Add Utility to NFTs
Creating utility for NFTs is best done by offering value to existing holders and new buyers. Here are some tips and best practices on how to add utility to NFTs:
Real-World Utility NFTs
Real-world utility NFTs have a direct connection or impact on the physical world. These NFTs can be used to access, verify, or represent real-world goods, services or experiences. Here are some examples: