Can NFT's be Used as Utility Tokens?

NFT trading in 2020 amounted to $82 million in total revenue. Just one year later, the total dollar sum of all NFTs traded was shy of $25 Billion. Given this tremendous growth, one could start to wonder if and when these digital apes, punks, and other “Crypto” animals will provide real-world value to their respective holders. 

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In essence, non-fungible tokens are unique units of data on a blockchain that can be linked to digital or physical objects to provide immutable proof of ownership. NFTs differ from cryptocurrencies in a significant manner. 

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To better understand this, it makes sense to think of traditional fiat currencies. If we asked you to let us borrow a dollar, you wouldn’t open your wallet and say, “Which dollar bill do you want?” Doing would be silly, as each $1 bill represents the same thing and can be exchanged for any other $1 bill. That’s the U.S. dollar is fungible. Cryptocurrencies are also fungible. They’re not unique and can easily be traded and replaced.

NFTs, on the other hand, are non-fungible in the sense that no two are the same. Each NFT is a unique unit of data that cannot be replaced by an identical version because there is no identical version.

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Due to that aforementioned trait, NFTs could be used as utility tokens. For example, an NFT could represent a key that unlocks access to a certain service or piece of content. This would allow content creators to monetize their work in a new way.

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Below we present you with a use case developed by namics.io 

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A social media influencer in the Personal Finance sphere puts out content for YouTube and Instagram. His videos teach people on how to improve their physical, mental and financial well-being. By doing so, he generates leads, which he monetizes by selling courses on his own website. 

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Namics.io develops a 1000-piece limited NFT project, which he markets and sells out. By owning an NFT, his most loyal follower base gains exclusive access to private content, and members-only Discord groups which are Token-Gated. The selling point - instead of paying $30 for a month of access, buyers can pay $270 to acquire an NFT providing them with a lifetime access to his paid services. 

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What’s in it for the buyers - They purchase a year-long membership at a 25% discount, which gives them additional access to special parts of the influencer’s website, as well as a group chat membership enabling them to get in direct contact with him. They can use the NFT for as long as they perceive it brings them value, and after that sell it on a secondary marketplace like OpenSea. Given the limited number of NFTs available, as the influencer grows and he puts out even more valuable content there is a possibility that the buyer makes a profit on the flip. 

What’s in it for the influencer - He gets to raise $270 000 up-front, which can be immediately re-invested in improving the quality of his content and courses. Moreover, 1 000 of his most loyal customers are now segmented in a special group, which is more susceptible to upsells, therefore increasing the average customer value and boosting profits. Last but not least, by applying Web 3 practices, the influencer can open himself and his audience to new and exciting growth opportunities.