Let’s face it, NFTs are here to stay, and if you’re still not sold, maybe you should check this out. But between NFT scams and finding the next blue chip, a question will always be in the back of your mind. What will I get in return when I invest in NFTs? And which projects will stay? Well, that’s what we’re gonna answer today! NFT utility is everything you need to know before investing in a project. So, buckle up because it’s gonna be a ride!
What Is NFT Utility?
It’s easy to get into NFT flipping. You just buy one of the promising upcoming NFT projects and sell them for much higher on the resale market. However, many people don’t want to get into the industry for fast profits. If you’re going in for the long haul, then you’re gonna want to find projects with the best NFT utility. So, NFT utility is what you’re gonna get in return for your investment in that project. And that could be much more than just monetary value! You can usually find that type of info in the NFT project roadmap.
Types of NFT Utility
As we already mentioned, although money is always a good incentive, some more perks could pull more people in. So some of the NFT utility types are:
- Staking
- Event Access
- Priority Access
- Redeemability
- Voting Privileges
- Breeding
- Airdrops
Staking
If you’re investing for the long run, then staking is a great thing to look out for. Some projects offer the option of passive income. You can lock your NFT, or even a collection, and start getting a percentage of its value annually in cryptocurrency. Think of it like a frozen account on which you’re getting interest… but without all the bank hassle!
Event Access
Most NFT collections today offer their investors exclusive access to different events. Be it online or real-life events, the NFT holders will definitely get the privilege of access there. For example, the Ape Fest in 2021 made such a bang. And it also showed that when you’re part of a project, you’ll become part of the community too!
Priority Access
So you bought an NFT from a certain creator/project. And later on, that project reached a certain milestone, and a new collection will be open for minting! Guess who has the main priority to mint it, or even to get on that whitelist? Previous NFT owners of course. So make sure you keep an eye out for any of this info whenever you consider a project!
Redeemability
When we say redeemability, it means you can exchange (or “burn”) your NFT in exchange for a physical object. Sometimes it could even be a digital item, depending on the project you’re investing in. StockX tried to do that but got hit by a lawsuit from Nike because they used their kicks. On the other hand, RTFKT (which Nike owns now) successfully did just that! They collaborated with FEWOCiOUS on NFTs that gave owners the chance to win physical kicks. You can read more about that here.
Voting Privileges
Okay, so we already said that when you invest in a collection, you’ll become part of the community. So how does that translate into decision-making? Since the whole point of decentralized apps and ledgers is to not have one owner, you’ll be making decisions with the community! So whether the boat sinks or floats wouldn’t be the decision of one person. Oh, how we love democracy.
Breeding
Cryptokitties have been around since 2017. But what makes this “game” special? Well, when you have two digital kittens, you can make them breed and get a new even cooler baby cat! That way you get to keep the first two and get a brand new one. Seems like a win-win, doesn’t it? And maybe you can start selling if you land yourself a very rare item!
Airdrops
We’ve already discussed NFT airdrops in detail here, but we still should include them on this list. Let’s go back to BAYC. So ape holders got a mutant serum airdrop at some point. The result? They got a new mutant ape while keeping the original one! That’s one of the many ways to benefit from airdrops. But whichever way, NFT owners will reap some nice perks that way.
Some More Uses That Creators Can Also Benefit From!
Royalties
If you create NFTs, you can upload your collection to your platform of choice! However, some platforms give creators royalties every time a transaction takes place. Even if the transaction is secondary of course!
Raising Awareness
Besides the obvious value a project can have, it can always help the real world by raising awareness. For example, World of Women highlights women’s impact on the world. Beeple’s Open Earth Foundation also got a lot of money because he sold one of the most expensive NFTs! And slowly, but surely, lots of similar projects are emerging!
Now That You Know What You’re Buying Into
Make sure you’re always on the lookout for awesome projects before you buy an NFT. And make sure the money you’re paying will get you some cool perks. After all, everyone’s looking for the next big thing they alone can have. Who doesn’t like exclusive things? Some are going as far as getting NFT bots to catch the wave at its highest!
This is just like everyone going into the sneaker reselling business at its peak. Don’t get us wrong though, because the sneaker industry isn’t going away anytime soon! So make sure you check out the benefits of this business too! After all, why should you put your eggs in one basket if you can diversify? Godspeed 🔥
