Top 5 Use Cases of NFTs

There is a sense in the view that the current crypto market crash has played a key role in resetting the landscape of NFT adoption. At the moment, the adoption of NFTs is no longer driven by the acquisition of ‘images of digital apes on the blockchain’, but by new innovative use cases that directly correlate to events and solutions in the real world.

TL;DR

• Real-world use cases have become the major driving force for the adoption of NFTs since the beginning of the ongoing crypto market crash
• NFTs have found use cases in gaming, music, art, real estate, and even finance.
• There is a general conception that NFT use cases will continue to grow as more sectors discover innovative ways to deploy them

Use Cases are Driving Adoption

Although NFTs had been around since 2017, they did not break onto the scene until February 2021 when Beeple made the round for trading his NFT for $69 million. When you look back to that moment today, you can rightly point to it as the single most defining moment in the history of digital art.

Several other projects, generative art, one-of-one, and more have since been sold at exorbitant prices. Then came the crypto market crash of 2022 and all of a sudden, the cash started to dry out of NFT sales with some even labeling them as worthless images of digital monkeys.

This, in some way, has led to the rethinking of what NFTs are and how they could be deployed for other meaningful use cases. Today, NFT adoption is growing at a pace than ever recorded and their adoption is largely fueled by innovative use cases that are continually developed across sectors.

Use Cases of NFTs

The adoption is NFTs is fast growing across industries. Below are some of the innovative ways that NFTs are being used across the board.

Art Collection

Art collection, ownership verification, and authenticity are some of the early use cases of non-fungible tokens. NFTs are used as a way to represent physical art that is worth millions of dollars. Through NFT issuance, a collector is given a digital representation of their artwork which signifies their ownership of the art. Also, the value of such art is tied to the value of the NFT, and all transactional data regarding the art is stored on the blockchain.

If or when a collector wishes to sell off the artwork, they also automatically transfer the NFT to the new collector.

Gaming

All thanks to the introduction of NFTs, gaming has now become a vital source of passive income for many players who engage in the play-to-earn economy.

In-game digital assets such as skins, avatars, weapons, tools, and even virtual lands can now be traded on designated marketplaces in the form of NFTs, thus creating a new decentralized economy in a space that used to be centralized.

Music

With NFT, music is no longer an artist’s affair as they can now build communities and sell their songs as NFTs while receiving reviews and quality feedback from collectors. Royalty sharing, exclusive events, and other perks have been made possible through the introduction of NFTs to music.

Real Estate

NFTs have helped bring liquidity to the real estate industry. First, ownership of real estate properties can now be claimed on the blockchain through NFTs. Second, real estate investment is no longer a space for the rich alone. Through the introduction of fractional NFTs, all categories of investors can simply acquire an NFT whose value corresponds to their investment capabilities. Thus, creating equal opportunity for all to invest while making real estate more liquid.

Finance

There are designated platforms that now allow borrowers to acquire loans by depositing their valued NFTs. The NFT is then placed in the custody of the platform pending payment. In the case of a loan default, the NFT is automatically transferred to the lender as repayment of debt.

There are also considerations among traditional finance heavyweights such as JP Morgan on how NFTs could be used to offer financial solutions to customers in the near future.

Conclusion

Sectors such as supply chain, land administration, and identity management are also exploring how to better use NFTs to create efficient processes. These innovative uses are expected to further contribute to the adoption of NFTs into the future.