If you’ve still not heard of NFTs, you have to be living under a rock. One of the most trending topics since 2021, NFT has changed the way we value the digital world around us. The total trading volume of NFTS was $200 million in 2020. As of the first quarter of 2022, the same number has climbed to more than $12 billion.
If you’ve heard, but not sure what these are, NFT stands for Non-Fungible Tokens, which is a digital representation of anything unique on a blockchain, usually used for art, in-game items, music and so on. However, it’s use is significantly limited to collecting and trading alone. The value is entierly dependent on the rarity of the object and how the market values it. Hence also the use-cases are limited to exclusive artwork, music rights, digital collections.
However, we’ve been seeing a steady rise in more use-cases which have beenn cropping up in recent times. The Bored Ape Yacht Club NFT collection is the best example of an NFT collection launched without any specific utility. Over the course of time, BAYC NFTs have served many use cases such as rewards of ability for minting new NFTs or offering passes and tickets to exclusive events.
Smart NFTs are NFTs programmed with actionable utility on them for a practical application. Sometimes, also referred as NFT2.0, Smart NFTs are the next phase of evolution of NFTs and the cyberspace. Smart NFTs provide additional value to the creators and owners alike.
💡 One of the most recent NFT projects with utility is the Coca-Cola NFTs. Coca-Cola has been selling its collectibles in the real world for a long time including the vintage German plastic cooler that goes for $500. Coca-cola was offering four NFTs; one of which was a wearable NFT jacket inspired by their old delivery uniforms. The wearable quality of the NFT jacket adds utility. Also, the winning bidder for the NFTs receives a physical Coca-cola refrigerator; the SMEG FAB28 retro made-in-Italy; a new product.
Some industries to use Smart NFTs:
- Token Gated Communities
- Play-to-earn Games
- Digital Events
- Virtual Real Estate
- Social Spaces
Using Smart NFTs
Now that we’re convinced about the diverse use-cases and adoption of Smart NFTs, let’s get a little technical to find out different ways to create and use Smart NFTs.
Real World Utility
The easiest way to envision is by taking a fashion industry example. Let’s say you go to a store and purchase a beautiful dress. There’s a small QR code attached to the label. Upon scanning it, you receive a claimable NFT which you can now also wear in the Metaverse. We can further add age condition over the NFT to make it dynamic, so it gets old as time passes by in the Metaverse just as it gets worned out in the real world. You can also rent out that NFT in the Metaverse to someone else and earn from it. We can take this one step further. In case of IRL(In Real Life) events, when you purchase a ticket and unable to make it, you can use the same ticket to enter into the online version of the event. Since the IRL and digital events are connected, with the help of mixed reality devices, a digital version of you can interact with the real life people at the event.
On the other hand, say someone buys an NFT of an artwork, which is simply the image of a real artwork. You can ship the real art to them as well upon purchase.
The evolution of social media with Facebook, Tiktok, YouTube and other similar platforms gave rise to the influencer culture which we live in today. Influencers can create and distribute NFTs to their fans who can use them to get access to exclusive content and events.
A special type of utility which also has it’s own standard now, as SBT or Soul Bound Token. NFTs can be used to authenciate and build characters which can be transfered as well. While SBT can not be transfered and will be tied down to a single user, unless it’s burnt.
This is just the beginning to what Smart NFTs are capable of. And we can assist with our dev tools to make this future approachable. The above are only a few stated, and of course there’s more that we’re exploring.
Smart NFTs are at still a very nascent stage and we’ll definitely see further evolution of it going forward. However, what it has shown is that NFTs has use beyond art and collectibles.