Branded NFT drops sell on Instagram at major film festivals sell VIP passes as NFT, 2023 proves the durability of these new digital assets. The NFT frenzy in 2021, in which Bored Apes was bought for millions of dollars, brought this digital asset class into the mainstream. Beyond pure financial speculation, NFT Use Cases cover a number of real industries and applications.
First signs of optimism in 2023 – like OpenSea treatment over US$320 million in Ethereum NFT transactions by the end of January – indicates a new opportunity for industry leaders to build better infrastructure to support these digital assets and pave the way for increased utility and adoption.
Market recovery sparks renewed interest
Crypto Winter has put the non-fungible token space to the test, but in 2023 the sector is starting to show signs of life. A report from DappRadar estimates that the Ethereum NFT market is up 68% from its November lows. The steady rise over the past few months will likely help bring projects and creators back into the NFT market as they seek to ride the uptrend.
In an adjacent space, Web3 gaming has had an incredibly strong start in 2023. Investment in gaming and blockchain metaverse projects has reached US$156 million, with venture capitalists fully aware of the industry’s long-term potential. This promising development will continue in the NFT market, as Web3 games and the metaverse widely use NFTs to improve user experience.
Additionally, leading companies and well-known brands are increasingly getting into NFTs. For example, Starbucks is leaning into NFTs to connect with customers on a deeper level, with the recent launch Odyssey program offering games and virtual exploration of coffee farms. With this kind of mainstream exposure, we can expect NFTs to continue to intrigue both businesses and consumers.
Where do NFTs go next?
The underlying technology of NFTs will be an essential tool in a number of industries. NFTs can also be used to track goods through the supply chain, providing a verifiable record and reducing the risk of fraud and counterfeiting. Additionally, NFT use cases are already being explored in real estate, providing digital, verifiable and immutable ownership records.
In games, NFTs already provide the tradable ownership of in-game assets, while in the metaverse, users will be able to purchase NFTs tied to real-world items. By 2027, the in-game NFT space is expected to become a US$15 billion market.
A range of apparel brands are now using NFTs to create exclusive and interactive experiences for their customers. Many luxury brands, including Gucci, Louis Vuitton, and Givenchy, are embracing the metaverse and offering digital twins through NFTs. To date, fashion NFTs sold for a whopping US$245 million.
In the future, NFTs will also transform the way business is conducted in other industries. The $1.1 trillion concert ticket industry, for example, is looking for new ways to ensure fans have legitimate access to events, and blockchain technology provides a transparent marketplace where tickets can be distributed. in the form of NFTs. Additionally, the proof-of-ownership capability of NFTs could put an end to fraudulent ticket sales for good.
NFTs also create new revenue streams for artists and creators looking to foster a relationship with fans. Beyond actual gigs and galleries, those participating in the creator economy can showcase their work on popular NFT marketplaces and let their community members know whenever there’s a drop. This way, creators can connect with new audiences and distribute limited-edition collectibles.
The nuts and bolts of NFT technology itself are also evolving. Although still in their infancy, NFTs are used to represent digital identity, allowing users to prove who they are in Web3. Illustrated for the first time in a white paper co-authored by Vitalik Buterin last year, soulbound tokens (SBT) are a new non-transferable NFT asset class that can serve as a Web3 user identity. In addition to decentralized identities, SBT use cases span decentralized finance (DeFi), games, community engagement and user authentication.
Reduce user experience friction
Although the use cases are seemingly endless, there is still a lot of work to be done to make NFTs accessible to crypto novices. Users still have to go through a number of tedious steps to make an NFT purchase. Along with the less-than-ideal purchase process, high gas costs are also a major impediment to mass adoption.
The top priority for NFT executives to prepare for the next bull market should be to implement solutions that save end users time, effort, and money. This includes accepting a wide variety of payment options, including local payment methods as well as credit cards and services like Apple Pay. Additionally, users should never have to take responsibility for fraudulent transactions.
Bringing more people to the potential of NFTs requires the industry to have transparent processes in place. While mass adoption doesn’t happen overnight, tweaking the customer journey is a big step toward making this space more accessible. In the not too distant future, users should be able to enter their credit card numbers at a secure checkout to make purchases with ease.
The future of what NFTs will look like for everyday people is still taking shape, but with iconic brands entering and heavy investment in the space, it’s certain that NFTs are here to stay.