If you’ve been around the blockchain world for a while, you must know or be curious about Non-Fungible Tokens (NFTs). It’s one of those blockchain innovations that is intriguing and exciting at the same time. Some come cheap, while others can break the bank, with one NFT alleged to have sold for around $532 million. However, one of the biggest questions most people have is what to do with an NFT once you have it.
Is that it? Do you just buy an NFT to keep or resell at a later time? What if its demand goes down? Does it have another use? Well, what all these questions lead to is something called utility in the NFT world. Any creator who wants a community to stick longer than the initial hype of a project and become an investor should consider utility.
When you add utility to the other qualities, such as rarity, authenticity, reputation, and liquidity, you make your project more viable and attractive to users. And utility can be just about anything; physical products, bonuses, exclusive or early access to content or events.
Why is NFT utility important?
In essence, utility turns a digital token from a mere representation of some good artwork, memorabilia, or sporting moments into something with real-world use and value. And this level of flexibility in NFTs might be one of the reasons its popularity is rising, with the NFT market projected to hit over $7 billion by 2028. Here’s what you need to know about NFT utilities.
Utility in NFTs brings value to the owner, making it more attractive than static creations or digital assets that you own to resell. And utility works for fractional NFTs as they do for full tokens. Utility in NFTs is important because:
- It creates more value for the creator and user
- It gives users more reason to purchase an NFT
- It helps creators to reach a bigger audience
- Allows creators to build a loyal community for their future sales
- Improves sales
- Provides tangible benefits to users
- It makes it easier for users to transfer ownership
- NFTs with utility attached attract a better resale value
Fortunately, there are many ways to add utility to NFTs, give them more value, and attract the benefits mentioned above. Reputable and experienced blockchain and NFT experts like those offering NFT development at PixelPlex can help you define the best utility for your projects. Here are some ways to add utility and make your NFTs more valuable:
Give exclusive, or early access offers
This is one of the most beneficial utility types for creators and users. By offering access to exclusive content or access, you’ll be creating a sure way to entice your community to invest anytime you drop an NFT into the market. Some of the benefits you can add include the following:
- Passes to conferences while improving attendance and making the events more fun
- Tickets to real or virtual concerts. This is an excellent way for businesses like clothing and shoe brands or fashion houses to increase their reach and engagement.
- Getting early access to your project launches makes your investors feel extra special and, at the same time, entices them to buy into the projects, spread the word, and generate hype.
- Giving access to exclusive events through collaboration with other brands, such as a new gallery or nightclub openings, or access to exclusive artist performances.
This type is also called access NFTs and can help to build a strong community around your NFT projects.
Redeemable physical products
If you want to add a utility in which everyone will want a part, why not try adding a physical product into the world?. With all these happening in the digital world, most NFT users will be enticed by the thought of something physical to show for it besides some code and cryptographic signatures. Some big brands have tried and tested this strategy successfully, which can work for many other projects.
But how do you do it? You just need a collection of physical goods you can use as rewards, such as watches, clothing items, bags, etc. Branded items improve the utility, and you can collaborate with other brands to make them work more effectively. For example, the Bored Ape Yacht Club collaborated with Adidas, allowing users to claim merchandise like beanies, tracksuits, and hoodies.
Give your NFT holders the power to decide and create more engagement in your projects with little fuss. Voting rights allow users to decide on issues that matter to them and watch as they become loyal followers.
The voting right utility can be things like allowing investors or users to contribute to features on a project, when a new project drops, names, and many others. The possibilities of creating or adding this utility to your projects are endless. You’ll be tapping into the users’ creative minds and energy, drawing more traction to your project.
Memberships and loyalty programs
People love memberships to things like holiday clubs, recreational places, libraries, and so on. Giving this as a reward for buying into an NFT project is a perfect way to build a strong and robust community. You can create a membership club where users get exclusive invites to events, get content, or get a chance to participate in events with you.
Another way is adding loyalty programs to the NFTs. For example, you can partner with an airline to give users flying miles when they invest a certain amount. Fortunately, loyalty programs work for many industries, including retail and eCommerce, where they use reward programs as a marketing and customer retention tool.
From the above, there are four main ways to categorize utility in NFTs; access utility, redeemable utility, royalty utility, and voting rights. But this list is not exhaustive in how you can add utility to an NFT but a way to show how creators and users can benefit from NFTs. Ultimately, you need to give your community a good reason to back your projects by providing real-world use for your NFTs. Add utility to the other qualities of a viable NFT and grow the benefits to you and your users.