NFT Use Cases - Where We Are And What Could Be

Non-Fungible Token (NFT) was, without a doubt, a buzzword in 2021. It seems NFT usage will increase in 2022 and onwards. But what is an NFT? The ‘non-fungible’ part means that it is unique and not interchangeable. For instance, I can exchange 1 euro for another 1 euro. I do not lose anything from this transaction, since both items are the same. However, hypothetically speaking, one cannot exchange the drawing of “Mona Lisa'' for that of “Adam and Eve” and say that it is a fair (or equal) swap. There will always be one side claiming that the former was more valuable, and another side claiming that the latter was more valuable because these pieces are non-fungible. The token part means that it is executed via smart contract and is live on a blockchain to represent an ownership registry. Hence, this term, NFT, applies to digital assets which are non-fungible.

But let us come to the famous argument against NFTs: is right-click and save a jpeg is not enough? We can answer this question by diving into the difference between possession and ownership. Until now, I could possess photos and store them on my phone, pc, or on the cloud. However, towards the external world, there was no confirmation that I owned any of them. Once an NFT is minted, it is on the blockchain, and I can confirm the ownership of the digital asset, by having my ownership recorded on the blockchain. Additionally, if I want to do so, I can transfer the ownership to another person, entity, or to a smart contract. 

The given example is for digital art collectibles, but is it only the use case for NFTs? In fact, it is more than that. Within this article, I will outline other potential use-cases of NFTs.

NFT for Music

Without a doubt, the music industry will also be disrupted by NFTs. Musicians can issue their musical works in the form of NFTs in a limited quantity, eliminating the middleman and reaching out to the public directly. This way will allow musicians to get fair compensation for their composition; the profit of which is currently shared also by agents, lawyers, and distributors. In fact, by issuing NFTs, new musicians can reach out to the public in a simplified way and earn through this way. It should be noted that, if required, the ownership rights can still be sold to the music platforms (e.g. Apple, Spotify, etc…) as well.

In March, 2021, Kings of Leon released an album titled “When You See Yourself”, with sales being worth several hundreds of Ethereum. Six ‘Golden Ticket’ auctions, guaranteeing the owner four front-row seats to one show of every Kings Of Leon headline tour for life, have brought in a significant portion of the revenue too. 

Additionally, by having royalties, musicians can earn from their music pieces in perpetuity. Since by each sale of an NFT in the secondary market, 5% or 10% of the total sale amount can be given to the composer.

NFTs in Gaming

Grand Theft Auto has been my favorite series of games for many years, because it allowed me to act freely in an imaginary world. However, usually you play one game and finish all the missions, but your rewards and achievements are not transferable. On the other hand, if for example, Rockstar games introduced NFTs for the in-game items, such as your personally modified car, then you could actually transfer from one game to another one within the ecosystem of Grand Theft Auto games. Or player A can transfer the ownership of an NFT to player B within the same game, if both players have access to the same blockchain network that games operate on. In fact, it can create a marketplace for games that are played by the masses. Additionally, having the only marketplace and in-game items as NFTs on the blockchain can be another option for game producers. Players will earn for their invested hours by selling the items, and the marketplace owners, for example, the gaming company, can get royalties (or a percentage) from each sale. One of the examples is, notably, Enjin, which is a powerful blockchain gaming platform that lets people mint scarce items. 

NFTs in the Metaverse

Decentraland and Sandbox have already shown us that the metaverse is the next big thing. In fact, land ownership, costumes, avatars and almost everything in the metaverse world can be traded as NFTs. The virtual property concept will attract many big brands as well. Because alongside physical existence, big brands will need to be present in a metaverse to attract a new segment of customers. Already in the beginning of January 2022, Samsung shared its intention to open its first store in the metaverse with Samsung 837X, an immersive world modeled after its flagship New York City store. Netvrk, which is a partner of MELD, is a metaverse, with powerful creation tools and infrastructure to easily create, share, experience, and monetize creations. It is worth mentioning that MELD has been allocated with a Yacht of its own in Netvrk metaverse! Cardano-based metaverse project, Pavia, is also on the way to becoming a metaverse hub within the Cardano ecosystem.

NFT as a “Gift Card”

Instead of buying 100-euro worth of gift card at Adidas, I can buy NFT and gift it (transfer the ownership) to my friend. She can either hold it or redeem the NFT (meaning that the NFT is burned) to get her favorite Adidas shoes in her size. Also, worth noting that in maybe 5 years’ time (or even shorter), we can have the possibility to add the NFT of each shoe that we buy in a physical world to our digital wallet. As described above, our character can then wear it in the metaverse. Additionally, a receiver can also possibly exchange GI-NFT Cards to other NFTs or tokens via the marketplaces that might offer these services.

NFT as a Club Membership

Whether you train at your local gym or have a membership at your favorite book club, NFTs can be used to show that you are a part of that group. Hence, to have a membership, you can purchase an NFT by paying your membership fee and continuing your membership by the defined term in your contract. For example, your entrance to your local gym can be achieved by just showing your NFT, which was minted at the time you signed your contract, at the entrance. Hence, you will not be required to hold multiple cards in your physical wallet. Moreover, it can give privileged access to owners of NFT to clubs & concerts, or allow them to buy things at a discounted price, which can be used for bookstores as an example.

NFTs in Cardano Projects

For the ISPO (Initial stake pool offering) of Genius Yield, special NFTs are offered depending on the number of epochs that you delegated your ADAs for. For example, if you delegated minimum of 500 ADAs for 28+ epochs, you will get​ 💎 🙌 Diamond Hands NFT. The ISPO NFTs will have the unique utility to unlock the GENS staking reward program for vested GENS. 

If one participated in Liquidity Bootstrapping Event of Minswap, they converted purrADA for MIN/ADA LP Tokens, and also received an NFT, which acted as a booster for MIN Yield Farming rewards.

One of the interesting ideas that has been introduced in the NFT space is $BOOK token. The BOOK token platform and exchange is the first of its kind by using reading to “mine” for tokens. In order to obtain $BOOK tokens, users must purchase NFT books – and then read them. Readers are ONLY rewarded with native $BOOK tokens based on how much they read. The more you read, the more $BOOK you can earn. These Cardano-native tokens are redeemable on the platform to purchase new eBooks and Audiobooks – and also transferable from the BOOK Token platform to other compatible wallets and crypto exchanges. It can serve as a medium of adoption of blockchain as true ownership is an issue in that arena.

NFTs on the MELD Protocol

During the $MELD token airdrop that happened on the 30th of January, 2022, some of the Initial Stake Pool Offering (ISPO) participants not only received their $MELD tokens but also were gifted Diamond Hand NFTs. Additionally, for all ISPO participants, a Bank Manager NFT will be available to mint at cost. 

Bank Manager NFTs will offer two main utilities. Firstly, they will be used for a discount on your loan interest rate at the time of the creation of the loan. The Bank Manager NFT will provide a 0.3% reduction in the interest rate. It will only provide a reduction down to zero if the interest rate is already 0.3%. The bank manager will need to be in your MELD or supported wallet. Then it will be locked into the loan as a kind of collateral. When the NFT is locked to the loan, you can not trade, move or sell it until the loan is closed. One Bank Manager NFT can be used per loan. Secondly, the Bank Manager NFT can be used to increase the yield on the MELD variable staking pool. It will increase the yield by 0.1%. This yield increase will apply to all MELD tokens staked regardless of when they were staked into the pool.

Diamond Hands NFTs will be used on the MELD mobile app on the fiat side of services. They will give holders early access to the mobile app and its services, to bank accounts and no fees for the MELD crypto debit card. Holders will not have to lock up MELD to use services. There will also be additional benefits and discounts for the mobile app, bank, and debit card.