15 NFT Use Cases That Could Go Mainstream

·19 min read

Steph Curry. Eminem. Paris Hilton. Mark Cuban. The full list of celebrities who have embraced non-fungible tokens (NFTs) – whether through creating, collecting or hawking – seemingly grows longer by the hour, and it runs the gamut from Rob Gronkowski to Lil Nas X.

NFTs are here. They’re no longer fringe. Specifically, art and collectible NFTs have gone mainstream with breathtaking speed – faster than even the most starry-eyed, to-the-moon crypto bull could have dreamed. We now have a better idea of why. As I wrote in the beginning of this cycle, NFTs (especially art and collectibles) are fun, visualizable, culturally relevant and they’re easy to understand in a way that many blockchain concepts are not.

Jeff Wilser is the author of seven books including “Alexander Hamilton’s Guide to Life,” “The Book of Joe: The Life, Wit, and (Sometimes Accidental) Wisdom of Joe Biden” and an Amazon Best Book of the Month in both non-fiction and humor.

They can solve real-world problems. Just ask Daryl Morey, president of basketball operations for the NBA’s Philadelphia 76ers, who told me a few months back, “I just moved from Houston to Philly, and it was a pain in the ass. I had to move 10,000 comics. I had to move all of my wall art. I had to move all of this s**t, and with digital stuff you just move it. It’s definitely superior. And it’s the start of a major, major trend.”

Read more: How NFTs Became Art, and Everything Became an NFT | Jeff Wilser

Then there’s the development that many in the space – myself included – dramatically underestimated: the community angle. The social angle. When you pony up for a Bored Ape Yacht Club, CryptoPunk or World of Women NFT, it shows that you get it. It shows that you belong in the club. “People identify with them on a personal level,” said Maria Shen, a partner at Electric Capital, a blockchain-focused venture capital (VC) firm. “Ownership says something fundamental about their identity; it says something about their interests.”

This we now understand.

But what’s next?

Only a year ago, art and collectible NFTs were mostly ideas with “potential,” but no one outside the crypto space took them seriously. What categories today are in that same phase of early speculation, which are likely to erupt? What goofy-sounding NFT will get endorsed by Tom Brady in 2022? What bold, industry-disrupting NFT will Ariana Grande promote in 2023? What are the next chapters of this wild narrative?

I consulted with a brain trust of NFT insiders – investors, founders, people who live and breathe non-fungible tokens – to give us a glimpse into the (possible) future. Some of these categories will seem obvious. Some will seem far-fetched. Some might even feel absurd. Yet considered en masse, they have the potential to change how we consume content, how we spend and make money, how we prove our identities, how we attend events, how we dress or even how and where we spend the bulk of our time.

Maybe. But for now let’s start with the little blobs.

axie-infinity
axie-infinity

Gaming

Every day, there are 2 million people who play with the little blobs of Axie Infinity, which now has a valuation of $3 billion. “Gaming is really exciting, as you already have billions of people who are buying digital goods inside of games,” said Devin Finzer, CEO of OpenSea, the largest NFT platform. The reason we haven’t yet seen an even wider adoption, said Finzer, is that “the development cycle is a little longer with games than with simpler arts and collectible projects. There’s a little more of a delay.” He imagines we’ll see the fruits of these developments within a year or two.

Jamie Burke, CEO of Outlier Ventures (a U.K.-based blockchain VC and accelerator lab), was originally encouraged by research showing that “people spend five times more in a blockchain game than in a conventional game.” He said that skeptics originally “poo-pooed” this research, but then came Axie. The Axie juggernaut is proof, said Burke, that if the gamer can exit the game and cash out with crypto, and if they’re free to “do whatever the hell they want with the money,” then they’ll spend more money. “It feels really obvious now,” he said, predicting that Axie is just the very beginning of a much larger boom in gaming that will be “huge in the next decade.”

Fashion and wearables

“Luxury brands are coming to the NFT space,” says Laglasse, while smoking a cigarette on our Zoom call. Exhibit A: On Sept. 30, Dolce & Gabbana sold its inaugural nine-piece collection of NFTs, called “Collezione Genesi,” a surreal mix of high fashion and blockchain, for $5.6 million. The set included both physical items (like women’s dresses) and their digital companions as NFTs.

Just two weeks earlier, at London Fashion Week, a new brand called Auroboros, which describes itself as “the first fashion house to merge science and technology with physical couture,” unveiled a line of digital apparel that you “wear” using augmented reality (AR). For perspective, this was not at a crypto conference. This happened at London Fashion Week.

Or consider the collaboration between The Bored Ape Yacht Club and The Hundreds (high-end streetwear), which created merchandise for the community. “That sold out in hours,” said Shen. The fashion brands know an eager (and deep-pocketed) audience when they see one. “In 18 years, we’ve never seen anything like what’s happening on our website right now,” The Hundreds co-founder Bobby Hundreds gushed at the time. “Just wow.”

Read more: The Financialization of NFTs Raises Regulatory Issues | Will Gottsegen

Fashion wearables might just be scratching the surface. Shen imagines that NFTs could create new ways to monetize and invest in fashion. Take sneakers. “In order to flip a sneaker you have to take the physical inventory,” she said. “Imagine if you could increase the speed in which you can flip items.” Or maybe new financial instruments, fueled by NFTs, could allow people to invest in the fashion sector. “You can create financial products, like an index of the top-selling sneakers today,” said Shen, which could let you invest in a pool of the 100 hottest sneakers, for example, instead of tossing the dice on a single pair.

This is also a crossover with decentralized finance (DeFi) NFTs, which brings us to…

DeFi NFTs

Let’s say you blew your last $5 million on a CryptoPunk NFT, but now – oops! – you forgot that you need to pay your rent. No problem. You can use that CryptoPunk as collateral for a loan at NFTfi. “NFTs enable some new behaviors of assets,” said Andrew Steinwold, Managing Partner at Sfermion (an NFT investment firm) and the host of an NFT podcast.

Think about that loan. When you hand over the CryptoPunk as collateral, you automatically get it back when you pay off your debt. And if you default? Thanks to the wizardry of smart contracts, the NFT gets transferred to the lender, eliminating the need for debt collection and bounty hunters. That’s just the beginning. As my colleague David Z. Morris has written, NFTs are being fractionalized (to provide more liquidity), they’re acting as quasi-securities and they’re becoming finance-y enough that they might soon curry interest from the U.S. Securities and Exchange Commission (SEC).

Burke expects the innovation to continue at a rapid clip. He imagines a rise in secondary markets, or even “derivative” markets. Imagine that for whatever reasons, Epic Games decides not to integrate NFTs into Fortnite. Perhaps some derivative NFTs could fill in the gap? “Let’s say I’ve got a sword, and it’s a really valuable sword,” said Burke. “And I want to cash out of the game. The sword is so valuable, it has the ability to pay off my student loan, or buy a house.” He continues, clearly enjoying the thought experiment: “S**t, I love my sword but I need the cash.”

Read more: How ‘World of Women’ Became a Celebrity NFT Phenom | Jeff Wilser

Right now, there’s nothing you can do about it. You’ve just got a dumb sword, and it’s stuck in Fortnite. But perhaps an NFT of the sword’s “twin” – that lives outside of Fortnite – could be bought and sold on a derivatives market, and then some kind of mechanism would allow for the transfer of funds once the transaction (the sword handover) is complete in Fortnite. These are the kind of possibilities that NFT+DeFi could unleash.

In that vein, Burke thinks it’s far more likely that we’ll see growth in the new, creative, blockchain-enabled financial products before we see the NFT-ization of things that already exist in traditional finance, such as the deed to your home. “Where’s the growth in DeFi going to come from? In this regulatory environment, it’s sure as s**t not going to be real-world assets, or anything that remotely resembles a security,” said Burke. “That’s going to be a decade-long fight.”

Events and ticketing

Another hypothetical: Drake has an upcoming concert, and you want to go. Tickets are $100. Now imagine the ticket you buy is actually an NFT, and your NFT does the following six things:

1. It’s emblazoned with some artwork from a designer you like.

2. It serves as concert memorabilia. So it might even be worth something someday, like old ticket stubs to Beatles concerts.

3. Inside the venue, you can use the NFT as a means of getting snacks or beers.

4. Thanks once again to the magic of smart contracts, the revenue from your NFT automatically pays Drake 40%, the DJ 10%, the lighting crew 2%, the janitors 1%, and on and on. No middle-person is needed to orchestrate the payments, which means you pay almost nothing in fees.

5. If you bought the VIP ticket, the NFT unlocks your access to visit Drake backstage, or maybe it gives you exclusive access to future digital goodies.

6. Amazingly, the NFT gives you the right to be not just an event-goer, but even a shareholder in Drake’s concert. This NFT functions as concert equity, and you’ll get a small slice of the profits. If things break right? Maybe you’ll even make money by attending the show.

This future is closer than you might think. “What excites us is NFTs being used in the real world,” said Carolin Wend, co-founder of Mintbase, an NFT-minting platform. Take an upcoming festival in Lisbon, the NEARCon, which is anchored around the NEARProtocol, a smart contracts system that Mintbase uses instead of Ethereum. “The festival founder wants to do 100% NFT ticketing,” said Wend, and this could (one day) include “staking” your ticket, meaning that you could earn a profit on what you plunk down for the ticket.

Read more: Daryl Morey on Crypto and NFTs: ‘It’s the Start of a Major, Major Trend’ | Jeff Wilser

Some of these capabilities are still off in the future, but even at the Lisbon festival (held Oct. 26th), Wend expects them to “QR the heck out of the space,” so that people can scan QR codes to do things like redeem their NFTs for burritos. This last bit is not hypothetical. In Lisbon, said Wend, “We will be doing burrito NFTs.”

NFT community platforms

Remember those Dolce & Gabbana NFTs? Now imagine that you’re the lucky person who bought one. Pretend you’re the proud owner of the crown jewel of the set – literally a crown – called the “Doge Crown,” an almost comically ornate piece of jewelry. (Alas, the “Doge” refers to the Doge Palace in Venice, not the Shiba.) The crown looks like it came straight out of “Game of Thrones.” How do you store it? Maybe you keep the physical crown in your private vault, or perhaps you showcase it, modestly and tastefully, atop the throne room in your Mykonos villa.

But what about the digital NFT? What do you do with it? Or as Burke puts it, “Where do you flex that?” Think about it from Dolce & Gabbana’s perspective. “If you’re a high-end luxury brand, it’s all about controlling the retail experience,” said Burke. He guesses that trying to render such a lovely, intricate crown in a pixelated metaverse like Decentraland might – at least in today’s version – make for a “pretty sh**ty wearable.” (Burke notes that for this very reason, Dolce & Gabbana is giving the buyer of the NFT two years to figure out where to render it.)

So Burke predicts some kind of environment where people can gather, chat and flaunt their NFTs. Maybe it’s a form of AR, or maybe virtual reality (VR), or maybe something Web 3.0-ish or maybe something else entirely. The point is that there needs to be a good environment for experiencing NFTs. “What are the platforms of networks? That’s going to be the big trend,” said Burke.

Shen has a similar idea with a different twist. She envisions “a home for NFT communities,” or, more precisely, “a social network that’s made for NFT owners.” Perhaps this network is connected to your wallet that owns a Bored Ape, and it can only be accessed by verified users who own certain NFTs.

Or maybe they just hang out in the metaverse? Which leads us to…

Metaverse

“The metaverse is going to be one of the future game-changers of the NFT space,” said Maxime Laglasse, the head of content at Nonfungible.com. The short version: the metaverse can be a place to store and appreciate NFT art, it’s a hub for gaming, it’s Zuckerberg’s new mission in life for a reason and perhaps it’s an evolved version of how we’re all hanging out online anyways. (You can get my long version here, and an even longer version here.)

Virtual land

A wise investor once said, “Land. It’s the one thing they can’t make more of.” The investor was Lex Luthor. And his advice might ring true in the metaverse. Virtual worlds like Decentraland, The Sandbox and Cryptovoxels give their real-estate a hard cap, meaning that – in theory – a finite supply will become more valuable if the demand soars.

Read more: Here Comes the Virtual Real Estate Boom | Janine Yorio

“This is quite promising,” said Matty “DCLBlogger,” an influential voice in the NFT community who has been something of an oracle, dashing off a widely-shared Twitter thread in 2020 – over a year ago! – that outlined 25 future use cases of NFT. The thread looks prescient, correctly calling the rise of art, collectibles and gaming. Matty is just as bullish on virtual land. “Look at Axie Infinity,” he said. “There are a million-plus players,” and some of these players will think, “maybe it makes sense to own that land.”

Once you begin to wrap your brain around the idea that people could profit from digital real estate, the possibilities are dizzying. Maybe you own a plot of land, you build a virtual office building, and then you rent out the building for a virtual conference. And when the conference attendees want to blow off some steam, maybe they’ll want to gamble during their cocktail hour, so you rent out a casino game that lets them win and lose real cryptocurrency. As Matty said, “It gets real crazy.”

The CryptoKickers showroom
The CryptoKickers showroom

Digital identity

Self-sovereign identity (SSID) has long been one of the most intriguing applications of blockchain technology, and NFTs could be the key that unlocks the door. (Why does SSID matter? Here’s my primer from last year.) Laglasse views Ethereum Name Services, or ENS, as a useful example. “Now you can link your Instagram account, your Twitter account, and almost every social media account to ENS,” said Laglasse. “Since it’s decentralized, you can truly own the name you show to the community.”

Laglasse categorizes these as “Utility NFTs,” in the sense that you can’t typically exchange them for money (like art and collectibles), but instead they exist to prove that you own something. Another idea in the same vein: NFTs of college diplomas. This would let a Vietnamese student travel to the U.S., for example, and decisively prove that she has a diploma. Laglasse predicts, “It’s going to happen one day.”

Social media and influence

This one’s a little squishy, a little tough to visualize. But stick with it. “Think about all the digital value created through social media platforms,” said Burke. He’s referring to that elusive and hard-to-quantify concept of “online influence.” Currently, Burke argues, the only real way to monetize that influence is through advertising, and the influencer only earns a small slice of the revenue pie. But what if this influence could be quantified, scored, and captured as an NFT?

Read more: The Bored Ape Founders Haven’t Yet Joined the Yacht Club | Jeff Wilser

This “Influence NFT,” let’s call it, wouldn’t be as simple as just rewarding the number of Twitter followers. “It’s a form of atomized socialness,” explained Burke, where “I can atomize every bit of content, and I can quantify the relationship I have with my community.” He said this NFT might factor in variables like online reputation, trustworthiness or even the ability to curate and create good content. “This is the hardest one to explain,” he said with a laugh.

Remember the “Klout” score, in Twitter’s early days, where an algorithm tried to quantify users’ social mojo? Klout never seemed to catch on, and it went belly-up in 2018, but you can see the idea’s (arguably evil) appeal. “Literally any form of digital value flow could, in theory, be turned into an asset,” said Burke, who also envisions this NFT being plugged into a DeFi ecosystem, such as being used as collateral in a loan.

Shen thinks of this concept as a more refined version of a credit score, but one for credibility and influence. “You can actually have NFTs that form parts of your identity and reputation,” she said. She points to the example of Rabbithole.gg, where users can earn cryptocurrencies, tokens or NFTs by proving that they have certain skills or have completed certain tasks, such as registering for an ENS name.

Steinwold likes another example: Galaxy.eco aims to use on-chain data to reward people for certain verifiable activities. Maybe if you have 1,000 trades on Uniswap, you earn a Master Trader badge. Or if you’re a big and longtime holder, you get Diamond Hands. Maybe I should mint you an NFT if you can prove you’ve read this far in the piece.

Music

“The industry as a whole definitely needs some disruption,” said Matty, who expects that music will eventually take off in the same way as art and collectibles. Perhaps this has started. Shawn Mendes, Grimes and Snoop Dogg have all dipped into NFTs, discovering new ways to both monetize and engage with fans. Kings of Leon weren’t content to simply release an album as an NFT; they were so enthused that they played their NFT in space.

Live Nation wants to do for music what Top Shot did for the NBA – capturing “moments” as collectibles. “We’ve all learned from Top Shot at the NBA,” CEO Michael Rapino said on an earnings call, adding that he wants Live Nation to create “magic moments that we could mint and attach to our ongoing ticket festivals and special moments.”

Or maybe NFTs, music and DeFi could all merge. “If music masters could be actually pooled and then fractionalized, you could then receive income as dividends for streaming,” said Shen. She then whips up another possibility: Imagine if the rights to each song are captured as an NFT, and then you pool together the top 40 songs of the month, you fractionalize the pool, and then you could buy a piece of that pool and receive streaming income. “That would be interesting,” she said, “We just haven’t gotten to that point yet.”

Four more quick ones

Health care: “In the health industry, it’s going to be huge,” said Laglasse, who imagines that NFTs can be used to safeguard the confidentiality of health records, as well as tighten supply-chain tracking of medications.

Advertising: Here’s a curveball. “Advertising is not something people pay attention to,” said Matty. But he asks, “Why wouldn’t websites sell NFTs that give people the right to certain media spots?” All of this is in play.

Read more: Play-to-Earn Is Already the Biggest Star in the Metaverse | Jeff Wilser

Fantasy Sports: Sorare already has a foothold in the global game of soccer. It doesn’t take much imagination to see this catching fire with the NFL and the mega-industry of fantasy football.

NFT Search: “Right now, NFTs are this interesting but muddled and chaotic category,” said Shen, adding that they “look a lot like websites in the 90s before Google came in.” She has a point. There’s no clean search function for NFTs … yet. Imagine a Google for NFTs. Or a decentralized Google for NFTs.

And finally, the most maximalist scenario:

Digitalization of everything physical

“A lot of people still don’t realize how large NFTs are going to be,” said Steinwold. “They’re going to be used for anything. All forms of value will be represented as an NFT.” This is a bold statement. I ask him if I heard him correctly. All forms of value will be represented by NFTs?

Why is he so confident?

“We’re spending most of our waking hours online,” Steinwold reasons, arguing that this is a trend that will continue to accelerate in the next 20 or 30 years, and that soon “we’re going to have a lot of digital goods.” In the future, said Steinwold, if he buys a cool pair of Air Jordans (physical ones that go on your feet), he’ll want its NFT companion. He’ll want the NFT so he can flaunt it, flex it and perhaps to use it in a metaverse or a play-to-earn game.

“Maybe not this chair,” he said and pointed to his chair over the Zoom, laughing a bit. But he expects people will eventually want NFTs of their wine, baseball cards, rare coins, watches, cars – you name it – and “that’s the way the world is going to go.”

Maybe that sounds far-fetched. But only a year ago, so did the idea of mainstream NFTs for art and collectibles.


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