The five most important NFT use cases for 2023
Over the past year, there have been many changes in the NFT industry. A bear market in 2022 expedited the maturation of the nonfungible token space, whereas nonfungible tokens were absolutely exploding in 2021. The wild west that was the NFT market cooled off significantly during this period. NFT collectors evolved into prominent Web3 builders despite this, and many artists still found ways to sustain themselves.
It is important to note that this is not a negative development. In fact, the opposite is true. As the million-dollar profits ceased to flow, many investors and influencers ceased to be active, but the NFT industry as a whole was propelled forward. During the past several years, collectibles and large-scale PFP projects that held sway over the market have begun to reduce influence, and the market has shifted to other use cases that were previously underrepresented.
It is not only that the secondary sales of Sound.xyz music NFTs have exceeded $5 million or that photography NFT editions have enjoyed viral success. The transition from Web2 to Web3 coupled with advances in blockchain technology have spawned a lot of new NFT use cases that have the potential to change the metaverse. A close watch on these sectors in 2023 is certainly warranted.
Attendance tracking & ticketing
A sector of the NFT market that is likely undervalued is NFT ticketing. It is widely believed that NFT ticketing will greatly benefit live events in the future. An access pass to any live (or virtual) event, such as this type of ticket, is essentially a token as it resides on a blockchain.
NFT tickets offer a number of benefits to both ticket issuers and recipients. In addition to keeping an in-depth record of attendance numbers, issuers can interact with ticket holders in a new and innovative way via NFTs by using the blockchain as a ledger. Data associated with holders of a specific NFT ticket can be used by issuers to send out notifications, host surprise giveaways, create token-gated websites and services, and more.
Additionally, attendees of non-NFT events may receive rewards after the event as well. In POAP, users can create and issue commemorative badge-style NFTs that are capable of providing a number of the same features as NFT tickets. A POAP can typically be collected by scanning a QR code or typing a particular phrase, making it easy for even those who are uninitiated in blockchain technology to collect.
Despite the fact that NFT ticketing and POAPs may appear to be merely a fun incentive for event attendees, they have proven useful to the project founders for keeping track of the initial supporters. POAPs and NFT tickets are both playing an integral role in changing the way we view fandom in Web3.
Passes for members
Memberships based on NFTs have grown and developed along with PFP projects, but they’ve since become their own market niche. NFTs of this type are commonly used by brands and programs to unlock incentives and rewards. Often, NFT membership is enforced by token-gating, in which blockchain technology is used to verify ownership of the NFT and to provide users with member-exclusive benefits. Various formats can be used for this purpose, including Discord servers, live events both in person and virtually, and more.
An early NFT membership can be found at the Bored Ape Yacht Club. The BAYC NFT holders are given access to a variety of exclusive merchandise in addition to merch drops, music festivals, and subsequent NFT releases. The creation of membership platforms such as Friends With Benefits and OneOf has become the archetypical approach to launching membership passes, and among the most ambitious membership initiatives are LinksDAO, LoudPunx, and Flyfish Club.
Even beyond a simple membership pass, NFT endeavors have incorporated shared ownership and voting. A good example of this would be Rug Radio. Farokh, a developer and influencer, was responsible for the development of the platform. A key element of the project’s ethos is that users are expected to own and control it. Due to this, Rug Radio issued NFT holders with Membership Passes, allowing them to participate in major decisions and vote on proposals.
Soulbound tokens
These non-transferrable tokens are ideal for maintaining permanent records as they are non-transferrable. SBTs may provide a better method of verifying important information on the blockchain instead of preserving vulnerable paper records for future generations.
These NFTs, which were originally proposed by Ethereum Co-Founder Vitalik Buterin, are only capable of taking over paper records, but also performing a variety of other functions. Designed to protect and preserve the identity of online users, SBTs are expected to have a significant impact on our everyday lives if they are launched as planned. It is possible to create an NFT with immutable and non-transferable ownership of medical records, alumni status, academic achievements, criminal records, employment histories, and everything in between through the use of SBTs.
There’s increasing evidence that SBTs could become a reality by 2023, they’re not scaleable until a fully decentralized society is achieved. The question is, where? Furthermore, companies such as Moonpay have already announced similar initiatives in addition to Buterin’s hints that they might implemented by late 2022. It may not be long before we see the first real-life application.
Physical x digital
There was a rise in phygital goods in the NFT space in 2022. With phygital, artists and developers are able to transform their physical creations into NFTs and vice versa, adding yet another layer to the concept of digital ownership. As a result of its abrasive phonetics and portmanteau nature, the term phygital itself has garnered some opposition, but it remains undeniable that such products are very popular.
There are several forms of physical goods. In Web3 creations, the line between physical and digital continues to dissolve between toys, collectibles, and even more traditional forms of art, such as sculptures and paintings. However, wearable devices have emerged as one of the most popular applications of this new market sector. An example of this can be found in the footwear, shirts, and other fashion accessories produced by companies like 9dcc and RTFKT.
In addition, physical goods are not a new concept in terms of wearable technology. Video games such as Fortnite have long featured wearables that are digital goods. Founder Gmoney was first inspired to venture into digital collectibles as a result of Fortnite skins, as he recognized digital ownership’s potential and the importance of ensuring future generations understand that potential. It would be a wise move for the remainder of Web3 to keep an eye on physical if investment giants such as him, and fashion powerhouses such as Nike are keeping an eye on it.
AI
We cannot ignore the fact that artificial intelligence is here, and it appears to be here to stay. The AI boom is akin to, if not bigger than, the initial NFT boom of 2021 due to tools like ChatGPT spreading across nearly every industry and AI-generated art becoming a hot topic among online communities.
The impact of AI on society will almost certainly far outweigh that of NFTs at this point. It is also important to note that this impacts Web3. AI collaboration is already a part of the workflows of many prominent artists in the NFT space. It’s not because of the latest AI boom, but because the NFT space is a convergent digital space where artists, developers, and coders collaborate. What are the reasons why AI should be monitored in 2023?
In just the last year, it has made such significant advancements. DALL-E, ChatGPT, and other tools have raised ethical questions regarding the creation and sale of AI art. Others have embraced the new paradigm of AI art as inevitable, although many critics fear this change. However, AI-created work is currently lacking the “human authorship” required for the right of protection to be accorded to the artist. There is no doubt that this is a slippery slope.
What else can we say?
At 2023, the five use cases listed above will undoubtedly become increasingly prevalent within the NFT space, regardless of profits or speculation. Perhaps some unseen force will emerge and further shift the ecosystem, while others may fizzle out or even dominate the market. Nevertheless, each of these examples of NFT innovation has contributed to widening the discussion on the benefits of blockchain technology in contemporary society, even if only a little bit.