Utility NFTs: What are They?
If you have been following the NFT space you have probably seen news of 7-figure sales of digital collages and rock JPEGs on the blockchain. With these headlines, the skeptic in you may be wondering how these valuations were derived. Who decides if this JPEG is worth more than this JPEG?
With art, the valuation of an NFT is tied to the artist’s personal brand, their marketability, and collectors’ sentiments about their future potential. Here, valuation is highly subjective. With digital collectibles, the value is tied to scarcity. Here, valuation is tied to computer-generated scarcity.
Enter utility NFTs. This broad category includes NFTs with valuations based on the perks, access, rights, and opportunities they bring to token holders. When a collector buys an NFT they automatically enter an exclusive and limited cohort of token holders. This blockchain based connection creates a bridge between NFT creators and investors that can be leveraged numerous ways. The potential that can be unlocked by this bridge is immense. Let’s take a look at this emerging class to explore where it stands and where it is going.
What are utility NFTs?
Utility NFTs have clearly outlined intrinsic value beyond their purported scarcity. For example, holding a token could unlock exclusive experiences, early access to products, entry to members-only virtual and IRL events, or dividends. Since we are in the early stages of this market, the possibilities are vast for NFT creators with vision, creativity, and strategic mindsets.
Utility NFTs have natural synergy with the gaming industry. For example NFTs can represent in-game assets, weapons, or virtual goods that players can purchase and use within a game. Meanwhile, brands can use utility NFTs as a new revenue stream and a creative way to reach consumers.
Blind Boxes, gameFi and utility NFTs
As a curator-centric gamified marketplace for NFTs, Blind Boxes is always searching for new ways to unlock value for our stakeholders. With our NFT farming initiative and BLES staking programs we are exploring ways to use utility NFTs to weave value and connectivity to our community of curators, creators, collectors, brands, and investors.
BLES and Utility
Blind Boxes leverages the elements of surprise and chance to add fun and intrigue to the NFT collection and speculation processes. For curators and NFT creators, the unique incentivization structure rewards their ability to be tastemakers in the NFT world.
Blind Boxes is powered by $BLES, a fungible, freely exchangeable currency with defined utility. Users receive BLES tokens by engaging with the platform, such as opening Blind Boxes or participating in contests. Token holders also become stakeholders within the soon to be rolled out Blind Boxes DAO. Think of the DAO as a members-only club where $BLES empowers users to dictate the evolution of the platform. Here, utility is tied to a fungible token and encompasses the entire BLES community.
Games like Axie Infinity, Sorare, and Evolution Land are also leveraging NFTs as a way to engage with their players. In Axie Infinity, players can buy and sell “Axie” avatars, with gameplay that aims to be more interactive than the likes of CryptoKitties.
Brands and utility NFTs
Coca-Cola has been experimenting with utility NFTs as a way to connect with consumers. They teamed up with 3D creators at Tafi to auction an NFT loot box. In celebration of International Friendship Day, Coca-Cola recreated one of its iconic vending machines as a “Friendship Box” NFT, revealing several artsy surprises.
The winning bidder’s proceeds go to Special Olympics International, a Coca-Cola partner. Additionally, the winning NFT holder receives a real-life, retro Coca-Cola refrigerator — of course fully stocked with the famous beverage.
That said, utility NFTs can go much further, as is the case with VeeFriends NFTs. This project is led by marketing heavyweight Gary Vaynerchuck, and the NFTs provide real utility, such as tickets to VeeCon, or even an invite to have dinner with Vaynerchuck himself.
Meanwhile, the artist 3LAU auctioned off vinyl NFTs that could be redeemed for various real rewards, such as custom music, exclusive content, and physical vinyl.
These are great examples of how brands can leverage utility NFTs to engage with their audience in new ways. By creating collections around a brand that people already like, these companies and influencers were able to generate buzz around their brand while also generating revenue.
This is something that many brands are starting to realize — which is reflected in the exploding NFT market.
The future of NFTs looks bright, with utility NFTs being a big part of that. The key takeaway here is that utility NFTs are digital objects with uses beyond being displayed as someone’s Twitter profile picture — they provide real, added value for investors, artists, gamers, and brands.
The days of “flex utility” NFTs are over; true utility NFTs are here to stay. To take part in the future of NFTs, you could mint your own collection, curate a collection, or even invest in a collection. Whether you’re an individual or a brand, there’s no doubt that utility NFTs represent a powerful new way to engage with your audience in a meaningful way.
About Blind Boxes
Blind Boxes is a gamified curation platform and launchpad for NFTs (non-fungible tokens). This highly scalable dApp enables brands and creators to diversify their revenue streams, increase the liquidity of their creative assets, and to become leaders in decentralized global economies while engaging fans and buyers to discover and collect rare, limited edition NFTs.
Via the Blind Boxes Marketplace, buyers get to experience the thrill of time-released white-labeled blind box series, where a collector can draw from and unlock sealed packages of exclusive items, curated by tastemakers across the arts, music, & entertainment sectors. Curation is at the core of our value proposition. The platform offers a commission structure that incentivizes independent contributors to produce bespoke blind box collections that feature top-tier talent and emerging artists and designers from around the world.
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