Some may be too prideful to admit it, unwilling to risk being labeled an uncultured philistine, but art just doesn’t do it for some people. While art aficionados “ooh” and “awe” wandering floor-lit galleries, they’re eyeing the clock between cuff-covered yawns.

Now consider this lost translation in context of Web3’s physical-to-digital art crossover in non-fungible tokens, or NFTs. Even though these one-of-a-kind, blockchain-secured units of data are bonafide tickets to ownership within a digital space, outsiders can still miss the allure.

This is where utility NFTs come in, reeling in the next generation of NFT adoptees and a new era for the digital assets now equipped with direct application for real-world use.

What Are Utility NFTs?

Utility NFTs are unique, digital assets that offer use cases beyond their valuation, such as rolling membership benefits, access to premium, gated content or exclusive entry to real-world experiences.

 

What Are Utility NFTs?

Utility NFTs are digital tokens that grant token holders access to exclusive, real-world use cases. These digital assets are a kind of “NFT with benefits” that go one step beyond the average smart-contract token, offering perks ranging from redeemable rewards, memberships, access to events and passive income opportunities.

While regular NFTs carry value in relation to market demand, like fine art, utility NFTs offer immediate and direct value to the buyer upon purchase through immediate access to specified privileges.

Described as a new era for the cryptocurrency cousin — NFT 2.0 — the concept of attaching instant value and practical application to a digital asset developed organically. In fact, many trending utility NFTs are actually converted from original models. The colorful primate palettes of the Bored Ape Yacht Club weren’t designed with utility in mind, but rather acquired real-world use cases with their burgeoning popularity as a status symbol. Special rewards for Bored Ape holders include minting opportunities or passes to social, networking events.

Token-gating, or locking products, experiences, content and communities behind an NFT, is how Web3 creators are adding value to their work and harnessing the ropes on how it’s distributed while simultaneously building active, loyal and engaged communities.

Term to Know: Token-Gating

Token-gating is when creators restrict access to their content, products, experiences and community to those in ownership of a specific token, adding more value to an NFT by attaching utility to it. The NFT acts as a key of entry to unlock the “gate.” 

 

Types of Utility NFTs

Although expanding valuable and practical applications to a digital asset is a fairly novel concept, you may be more accustomed to it than you think.

Digitized movie or concert tickets, for example, function in likeness to utility NFTs. A patron presents their proof of purchase in a digital format, often downloaded nowadays as barcodes and QR codes, which affords them tangible goods, services and entry to live experiences — like that specific seat in a theater or arena, reserved solely for the ticket holder, for a specific show.

To further explore utility NFTs in action, here is a glimpse into some of the general categories that have developed so far in the digital-to-physical-world crossover.

 

Governance

Creators who release a utility NFT series with governing powers hand over the direction of their project or product to a collaborative community operating through a token-based mechanism. Depending on the model, developers may grant NFT owners absolute say over core decisions or limit token holder input to select issues, reflecting a more hybridized trade-off in administration.

This concept overlaps a bit with that of decentralized autonomous organizations, or DAOs, which are the peer-to-peer communities governing Web3 platforms. Made up of stakeholders, these groups rely on each other — and smart-contract automation — to contribute in the decision-making processes that develop the future of a protocol. These, too, run on a token economy, more often than not.

 

Events

Exclusive-entry events are a proven marketing concept with a long history of success. Attaching this tried-and-true promotional practice to an NFT adds value through utility, incentivizing an already invested community to buy in for privileged access.

Events can be in-person or online, by way of the metaverse, and vary from professional conferences to all-out ragers. Other formations include networking meetups, expert panels, community group calls, gather spaces and webinars.

Take for example VeeCon, an annual, multi-day festival behind the NFT series VeeFriends, created by Gary “Vee” Vaynerchuk. The festival attracts 10,255 NFT enthusiasts who can access keynote speeches, educational talks, curated vendors, live music performances and Q&A sessions with their NFT’s ticketing utility.

In the “Coachella Keys Collection,”organizers of the three-day, two weekend music and arts festival released 10 unique NFTs that grant lifetime, VIP access to the event.

 

Premium Content

Locking premium-quality content behind an NFT can create a loyal audience while facilitating an exchange of influence. Leaders of projects release content in demand by their audience. Independently, the market value of the NFT will be directly correlated to a brand’s impact.

The first band to release an NFT album was radio-rock brothers Kings of Leon with When You See Yourself in March last year, in three versions: A special album package, another with live show perks — such as lifetime front-row access — and a third that unlocks enhanced, audiovisual art. The limited-edition digital widgets redeemed fans physical copies of the record in vinyl or as compact discs, as well as downloadable MP3 tracks.

Not to be outdone, rap legend and NFT collector Snoop Dogg announced that upon acquisition of Death Row Records, the label that raised him would become the first of its kind, producing artists and releasing music in the metaverse.

More on NFTs In MusicHow NFT Music Is Transforming the Recording Industry

 

Offers, Discounts and Promotions

Token-gating coupons and deals maintain holders into a cyclical slow-release pattern, with the short bursts of excitement — exclusive access to discounts — keeping them hooked. This approach works best with established name brands. Depending on a creator’s project, offering discounts and promotions, in likeness to a membership loyalty program, might be more pliable than vaulting a steady stream of premium content behind an NFT. Both, however, rely on a subscription-based structure grocery store and coffee shop regulars are already familiar with.

 

Gamified Engagement

Given the traceability of an immutable, public ledger, platform creators can measure on-chain data of user activity to architect a reward and incentive system. Rewarding users for accumulating a certain amount of NFTs, long-term holds on prized NFTs, attending virtual events or community engagement with access to metaverse worlds, multiplying governance tokens or limited-time special offers are some ways platforms are using this method.

 

47 Examples of Utility NFTs

Divided by category, here are some top performing NFT projects that make for more than just a pretty avatar. Each holds a utility function for its owner, granting rolling benefits of boundless possibility.

 

Gaming

World of Freight: Hosting a collection of 10,000 NFTs, this play-to-earn racing game wants to build the first NFT-supported supply chain infrastructure and trade finance protocol, Supplain. All NFTs, which feature ground, water air and even space-travel vehicles, passively generate the platform’s native $WOF tokens — used for upgrading vehicles or customization — and double as membership cards.

Fractal: Developed by a Twitch co-founder Justin Kan, Fractal is a Solana-backed gaming marketplace that aims to sprinkle 100,000 digital snowflakes as items across blockchain-based games, equipped with benefits correlated to the game they’re discovered in. Restoring health, special characters or powers and even secret levels are some in-game benefits made possible when collecting Fractal NFTs.

Metakey: Metakey gives keyholders access to special perks listing game items, avatars, unique outfits, virtual land access, course material, discounts and airdrops across multiple platforms. Keyholders also have a pass to mint their own NFT using the platform.

NiftyVille: An open-world concept with a player-driven economy stylized as the Grand Theft Auto of the metaverse. While players drive the backcountry in luxury cars, fight other players or run for mayor of their city, they are also earning passive income by owning a business. According to their website, many of the NFTs will be redeemable for their real-world equivalent.

Axie Infinity: With 2.8 million daily active players, Axie is one of the first games that put play to earn on the map. Here, axolotl-inspired digital pets battle, breed, own land and hunt treasure. To date, there has been $3.6 billion traded on its marketplace, according to the website. 

Neo Tokyo: Crypto Youtuber Alex Becker dropped this NFT collection in 2021 on the Ethereum blockchain, deliberately releasing NFTs through riddles and clues on his social media as a way to fairly vet deeply invested people to an exclusive space. The tokens are divided into four parts — Neo Tokyo Identities, Vault Cards, Item Caches and Land Deeds — with high expectations on what’s to come.

Loot: Loot is a project centered on 8,000 NFTs that represent a bag of loot fit for a medieval adventurer. Featuring only white strings of text on black backgrounds, each lists a set of randomized gear generated and stored on the blockchain. Stats, images and other functionality are intentionally omitted for players to interpret their character’s purpose and how they want to play the game. 

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Fashion and Luxury Goods

CloneX: Beginning with sneakers, metaverse brand RTFKT expanded to a full wardrobe of digital streetwear fashion design after a series of successful footwear collaborations caught traction. CloneX is now owned by Nike. The team unveiled its co-branded NFT, featuring the only virtual trainers dawning the swoosh logo, Nike Cryptokicks.

Jigen: Adapting real-world items to the metaverse, Jigen serves as an NFT gateway for fashion and luxury items. The platform’s purpose is to solve glitches on both ends of consumer and company interfaces with blockchain technology. NFTs on the Jigen platform serve as a certificate of authenticity for an item and are backed by the real-world luxury assets they represent, which can be redeemed at any time or held onto for investment purposes.

Arianee: An open-source protocol that aims to augment the ownership of goods, authenticating tangible, luxury items with a digital NFT.

Dematerialised: An experiential marketplace for virtual goods, Dematerialised converges an emerging digital fashion ecosystem with visceral experiences in a Web3 setting, targeting luxury items. Tied to NFTs, it provides a platform for new income streams where users can access, trade, sell and utilize flex-worthy goods.

Pawn Protocol: An open source non-custodial liquidity protocol that acts as a digital pawn shop. Here, users can post their NFTs as collateral for a crypto-denominated loan, allowing peer-to-peer lending and borrowing on the Solana network and facilitating a much-needed credit market to serve the asset class.

 

Sports

Autograph: A Polygon-based NFT collection that combines user sports fandoms with their crypto wallets. Covered by the faces of famous athletes — from Tom Brady and Tiger Woods to Tony Hawk and Simone Biles — the utility of these digital assets give token-holding fans access to their favorite players with meet-ups, individually signed collectibles and unique content.

NBA Top Shots: Brought to basketball fans by Dapper Labs, this collection of famous NBA and WNBA “moments,” or historic, highlight reel-worthy clips, brings a traditional trading card feel to Web3. Some moments are deemed rarer than others and are minted in packs.

UFC Strike: Dapper Labs’ sister project to NBA Top Shots features collectable Ultimate Fighter Championship moments as NFTs from memorable match-ups in the octagon.

Sorare: Sorare is an online fantasy sports league platform where NFT holders can buy, sell and manage a virtual team with their digital, minted cards featuring their strongest lineups across soccer, baseball and football.

LinksDAO: Users can join this Web3 golf and leisure club for roughly $2,500. Members receive exclusive, curated benefits ranging from discounts on gameplay, free monogramming and fitting services to access of an elite, 200-golf-course network spanning 40 countries.

 

Profile Picture

CryptoPunks: Widely recognized as the first NFT project, CryptoPunks is a 10,000-piece randomized character collection on the Ethereum blockchain featuring 24 x 24 pixelated avatars with uniquely eccentric attributes. A Canadian duo of technologists released the series in 2017 from their New York City-based headquarters, Larva Labs.

Bored Ape Yacht Club: Second only to CryptoPunks, the Bored Ape Yacht Club features a 10,000-strong NFT collective of eccentric primate collectibles whose unique code doubles as a pseudonymous mask users tie their Web3 identities to. To date, the project has generated nearly $2.5 billion in sales and continues to innovate the utility space, inviting token holders to private online spaces, exclusive merch and members-only live events.

Doodles: Launched in the fall of 2021, Doodles is a community-driven collectibles project in vibrant pastels that features art by Scott Martin, better known as Burnt Toast. The collection, chock full of bubblegum and rainbows, is sized at 10,000 pieces.

Cool Cats: There are 9,999 vibrant, blue “cool” cats that make up Cooltopia, the platform’s multi-layered NFT ecosystem. The original character was drawn up by artist Colin “Clon” Egan, self-described as “The Catoonist,” and has since expanded into a gamified NFT experience with access to tokens, community events, collaborations and more.

World of Women: On a mission to correct Web3’s underrepresentation of female artists, the series of collections support and spotlight emerging femme artists around the world. NFT holders own the underlying artwork and intellectual property, get first looks at original monthly art drops from select NFT artists, access to curated pre-sales and minting opportunities for high potential collections. Holders also receive entry to holders-only raffles and discounts and invites to an annual gala as well as other in-person events.

CryptoCoven: At the intersection of tarot, astrology, witchcraft and medieval fantasy lore is CryptoCoven — an NFT collection created by five friends that caters to women. It has generated over $20 million in sales.

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Web3 Identification

Unstoppable Domains: An NFT domain name provider and digital identity platform that generates NFTs for individuals, organizations and companies with personal information attached, like a business card or portfolio. This allows users to be fully connected to their networks while still being able to pocket their accounts in a decentralized wallet. These NFTs simplify crypto transactions with human-readable names and ease website creation and hosting on Web3.

Ethereum Name Service: A blockchain equivalent to the internet naming convention known as Domain Name System — the current, premiere choice for website developers when mapping an IP address to a literate domain name. ENS re-codes strings of gibberish, alphanumeric keys tied to decentralized websites and wallets to legible, easy-to-memorize domain names while maintaining functionality. These NFTs double as a wallet address, a cryptographic hash or a website URL that can store address information and receive any cryptocurrency, token or NFT.

 

Governance

Snapshot: A decentralized, tailor-made voting platform that makes it easier for communities and organizations to create their own proposals. Various voting types and strategies — including NFT voting, tallying votes and eliminating voter fraud by verifying voter data through its smart-contract makeup — are supported. Results are easy to verify and hard to contest. Snapshot’s user-friendly process is performed off of the mainnet in its entirety, forgoing gas fees.

 

Ticket and Token Gates

MeebitsDAO: A 20,000 army of three-dimensional, algorithmically-generated voxel characters backed by a decentralized autonomous organization dedicated to funding and developing an ecosystem around the characters. Once a user’s general membership NFT is minted, they have access to the Discord channel and the ability to participate in the project through a DAO governance system.

 

Investment Groups

PleasrDAO: An investor group of decentralized finance, or DeFi, natives, NFT collectors and digital artists that team together to acquire and share ownership of high-value, culturally significant NFTs, such as the original snap of “Kabosu,” the Shiba Inu face of Doge. By buying in, your contribution not only affords you a slice of internet history but actively benefits an assortment of charities.

FlamingoDAO: With deep belief in the power of own-able, digital content, Flamingo is one of the most exclusive autonomous organizations, boasting an NFT collection valued at $1 billion, that aims to support, purchase, archive, collect and tokenize important, blockchain-based assets. Their participation in NFT valuation keeps the market relevant and creators in demand. Users buy in at high entry rates, with new members putting down 3,000 ETH or about $8 million. The duality of becoming a FlamingoDAO member offers the “ability to develop and deploy NFT-focused investment strategies,” according to its site.

VitaDAO: A collective for community-governed and decentralized drug development, VitaDAO group funds and digitizes research in the form of NFTs with built-in intellectual property. These NFTs fund research and development in the longevity space, specialized to extending human life and healthspan.

 

Science, Sustainability and Research Fundraising

DNA Test by Nebula Genomics: This project, a partnership between startup Nebula Genomics and Oasis Labs, wants to give users complete control over their genetic sequencing data — packaged in a DNA NFT — to combat consumer test kits that monetize users’ information. Through the function of NFTs, Nebula Genomics protects consumers from selling their genetic information by packaging it as a secure, digital asset they can own themselves.

Molecule: A platform that connects drug development researchers and investors in an effort to expedite the process of advancing biopharma, treating patients with novel therapeutics that don’t exist yet. Molecule utilizes NFTs by turning the intellectual property of pre-screened projects into IP NFTs, making them liquid, easily investable assets that are transferable.

GainForest: An international, non-profit based in Switzerland, Gainforest is a decentralized fund using artificial intelligence to measure and reward sustainable nature stewardship to help accelerate conservation efforts. Users who donate to the platform receive “NFTrees” that represent actual rainforest locations, which help owners track the health of the causes they care most about.

 

Music

Royal.io: A platform that allows NFT holders to own a piece of their favorite songs, support their favorite artists and passively earn royalties as they build their library. While earning royalties alongside their favorite artists, users will also have access to artists communities and be eligible to receive merch, invites to private listening parties as well as meet-and-greet opportunities.

 

Food and Drink

Flyfish Club: An NFT membership card designed around its utility, the Flyfish Club is Web3’s first private diner’s club that permits unlimited access to a 10,000 square-foot New York City location — consisting of “a cocktail lounge, upscale restaurant, intimate omakase room and an outdoor space” — as well as various culinary, cultural and social experiences.

Crypto Baristas: Providing the “complete caffeine experience,” each Crypto Baristas NFT comes with caffeinated benefits, including discounts for lifetime at all future cafe locations, award-winning coffee shipped to home, trips and tickets to New York Coffee Fest.

 

Curated Art

SuperRare: Dubbing itself as a merger of “Instagram meets Christie’s,” SuperRare is a marketplace that features single-edition digital artworks. In terms of utility, artists reap second-market royalties, forever.

Foundation for Art and Blockchain: An ambitious platform set out to build a new creative economy wielding the power of the blockchain. Aside from providing funds for minting, they host live exhibitions, auctions and galleries, and also educate creatives on how Web3 can work for them.

Nifty Gateway: A marketplace and a custodial platform that acts as a modern art dealer. In comparison to other applications, Nifty Gateway prioritizes quality over quantity, exclusively featuring curated and verified art. It stores NFTs on a platform wallet secured by Gemini’s state-of-the-art custody technology in order to facilitate gasless sales and transfers.

Coinbase NFT: One of the leading crypto exchanges now has its own marketplace for minting, buying, selling and trading NFTs, boasting the “best prices.”

MORE ON HOW TO PROTECT YOUR NFT ARTNFT Art Theft: What Buyers and Artists Need to Know

 

Arts Marketplaces

LooksRare: A community-first, decentralized marketplace vying for the top spot of OpenSea, the world’s largest NFT art exchange. Its edge? LooksRare actively rewards traders, token stakers, creators and collectors for platform participation.

 

Traditional Auction Houses

Christie’s Encrypted: Launching a fully blockchain-based auction platform — Christie’s 3.0 — the historic auction house reinvented itself as a destination for NFT-based art. Its most famous sale, Beeple’s “Everydays: The First 5000 Days,” sold for a record $69 million in March 2021, instigating a bullish NFT market.

Sotheby’s Metaverse: The online destination for “rare and extraordinary NFTs” is a collaboration between NFT artist Hackatoo, decentralized production company NFT Studios, world broker of fine art and collectibles Sotheby’s, and multinational semiconductor company AMD.

 

Virtual Land

NFTWorlds: Composed of 10,000 unique worlds built on Minecraft open-source software, NFTWorlds is an open-world “multi-metaverse” where players socialize at community hangouts, participate in mini-games and enjoy limitless experiences in the virtual realm while passively generating crypto income.

The Sandbox: A decentralized, community-driven gaming ecosystem where creators are encouraged to create, share and monetize their own NFTs. Sandbox landowners purchase plots as an NFT and can host their own experiences. Celebrities and name brands, including Snoop Dogg, Adidas, Paris Hilton and Gucci, have staked out their own digital grounds to build on.

Decentraland: An Ethereum-powered, browser-based virtual world owned by its users, who buy virtual plots of land in the form of NFTs using the native coin, Mana. Further utility comes in via features such as item generation, where designers can create and sell clothes and accessories for their digital neighbors.

Pavia: The first digital world by blockchain-platform Cardano, Pavia invites landowners, creators and visitors to play-to-earn opportunities and rewards. From trading NFT creations, earning in-game rewards or driving footfall to a plot, players are rewarded in native $PAVIA tokens as well as exclusive NFTs, which unlock VIP access and power-ups for their avatars. In total, the platform hosts 100,000 land parcels.

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