We are moving from creating NFT to using NFT These five areas are full of opportunity

NFT use cases are set to explode and these directions cannot be ignored.

NFT use cases are set to explode, and these directions should not be ignored.

NFT art surged past $200 million in March on some of the largest exchanges, but April’s volume shrank by a whopping 50%. In the eyes of critics, this means “the end of the NFT era. To be clear, artwork is just the tip of the NFT use case iceberg, and we are rapidly seeing new use cases for NFT emerge.

We are moving from creating NFTs to using them
The tools for NFT creators have become more powerful, and what is now required of all development teams is the ability to commoditize on NFT casting platforms. Platforms now provide interactive interfaces for creators to determine NFT scarcity, auction mechanisms, and royalty percentages for secondary sales on blockchains such as Ether, Flow, Tezos, NEAR, etc. NFT supply has increased significantly due to the ease of use of creator tools.

We are moving from creating NFT to using NFT These five areas are full of opportunity

Now in addition to making it easy to create NFTs, there are some interesting new ways to use NFTs. Let me use this article to highlight five new areas covered by NFT.

New benefits for sponsors
NFT is a wonderful tool for accessing exclusive content and opportunities

Creators are now using NFTs and social tokens to cash in directly through their fan base. Fans with these NFTs and social tokens can access exclusive content, receive exclusive perks, and can invest directly in his/her favorite creators.

In the future, we will see experiments with NFTs interacting with social tokens, with the rise of crypto-native platforms Patreon, Substack and OnlyFans.

Current concrete examples :

Giving back materially to early backers : Jack Butcher created an NFT through ‘InfinitePlayers’, sharing revenue with everyone who supported his previous NFTs.

Rewarding early supporters with access to exclusive content: American DJ 3LAU offers its subscribers exclusive access to his unreleased songs, or new opportunities to interact with him. To be eligible to purchase some of 3LAU’s latest sales, subscribers need to own a previously released NFT by 3LAU. Similarly, the astronaut character Aku (https://aku-dreams.com/aku), created by Micah Johnson, has an NFT airdrop, and only patrons who have previously received an airdrop can receive a newly airdropped NFT. Creators use these mechanisms to reward early backers and create utility for their NFTs .

We are moving from creating NFT to using NFT These five areas are full of opportunity

Prediction.

Decentralized Patreon: A decentralized, crypto-native Patreon will look very different from today’s Patreon, where fans are subscribing to content today. Creators will use NFT and social tokens to create an economic ecosystem around their fan community. Creators using the new platform can seamlessly (1) sell NFTs, (2) create access thresholds for exclusive content and images tied to NFT or social token ownership (3) have access to real-time stream payments depending on the type of access tokens their fans have (4) distribute revenue from NFT sales to the community based on contributions from active members. We will see more interesting experiments with NFT interacting with social tokens, for example, only using the creator’s social tokens to buy NFT airdrops, or NFT granting the holder the ability to give fans access to social tokens later. social token platforms such as Roll, Collab.Land (https://collab.land/) and Land (https://www.mintgate.app/) and Mintgate (https://www.mintgate.app/), and token-based community management platforms such as Unlock (https://unlock-protocol.com/) and Superfluid (https://www.superfluid. Streaming payment services such as finance/) will all be given the opportunity to participate in the new decentralized Patreon use case.

NFT version of Shopify: The current NFT minting platform follows the Amazon model, focusing on products and not on creators. New NFT platforms may follow a creator-driven model, allowing creators to build their own branded stores to sell their NFT. Some platforms that allow creators to create their own stores have recently emerged, such as Mintbase (https://www.mintbase.io/) and DAORecords (https://www. daorecords.org/).

Corporate NFT for big brands: Some of the world’s loudest brands (e.g., Adidas) and artists (e.g., TheWeeknd) today use NFT minting platforms (e.g., NiftyGateway) to sell their NFT. As NFT becomes an important part of their strategy, companies will need their own branded NFT platforms.

Ownership of co-branded creations and collaborations
Fans can now also create content, rather than just passively consume it

The line between fans and creators will blur. Fans will create rich worlds for NFT characters and exchange NFTs based on the content they want to see individually or through decentralized autonomous organizations (DAOs). fans will no longer be passive consumers. The biggest fans will become part of the creative process.

Specific current examples.

Communities building tools for NFT collections NFT: Meebits (https://meebits.larvalabs.com/) are collectible 3D characters created by the Cryptopunk team, and they already have community members building corresponding tools, similar to how Meebits can be transformed into Metaverse morphing products. Some community members have even formed DAOs like MeebitsDAO, creating tools and pipelines to make Meebits a digital avatar in the metaverse. In a similar vein, Axie Infinity (https://axieinfinity.com/) has created collectible characters called Axies that the community can create their own games to include in those games.

Collectors can create secondary creations of the NFTs they own: AsyncArt (https://async.art/) is an NFT casting platform for creating programmable NFTs and music. By owning a piece of NFT music or a portion of NFT music, collectors can recreate it to make it unique.

We are moving from creating NFT to using NFT These five areas are full of opportunity

Prediction.

NFT remixing: Fans can take NFT music, artwork, videos, fictional products, and more cultural products and create new NFTs through “remixes” while paying royalties to the original creators.

Fan-created worlds: The most popular characters will become NFTs and can be placed into fan-created worlds. Fans will be able to create games for their favorite characters, implement metaverse support, make the characters walk around as their avatars, and even place them in new creative works such as movies, novels, music, videos, and more, with a percentage of the proceeds going back to the creators. Artists have created NFT with world-building possibilities in mind. PUNKS comic (https://punkscomic.com/) has created comics using Cryptopunks. NFT holders can pledge their NFTs or burn them for PUNKS tokens, which make up a small percentage of the Cryptopunks used in the comic.

Fans can make secondary creations of NFTs: Fans can individually or collectively determine the look and sound of certain NFTs. For example, fans can own the album cover of singer Taylor Swift and change its background. As NFTs become part of the game, movie, or comic book world, fans can vote collectively, with the ability to vote on storylines or the demeanor of certain NFT-based characters.

Ownership and revenue dispute resolution: As NFT creation becomes more common and more complex, in-chain disputes will naturally follow. Creators who collaborate to create NFTs may dispute their share of revenue distribution and ownership. Some creators may create the same NFT on multiple platforms. There is also tampering with metadata on the NFT. Upshot (https://upshot.io/) is a platform for evaluating NFTs, and additional protocols will emerge in the future to verify the authenticity of NFTs, investigate NFT minting fraud, and resolve other on-chain disputes.

On-chain reputation and identity
NFT can be used as a unique identifier of past behavior and loyalty

People will receive non-transferable NFTs such as “badges” based on the actions they take.

The NFTs people have will be similar to a unique fingerprint that can identify them based on their past activities. This reputation history will be used as an on-chain identity to unlock new opportunities.

Specific current examples.

Credentials of past behavior: Uniswap now provides users with NFTs to prove their positions. Reality Cards is a prediction market that allows the largest holders of positions on both the long and short sides to cast the results as NFTs, enabling users to construct a betting history. POAP (https://www.poap.xyz/) is a protocol that enables activity creators to issue “proof of attendance” badges. Bankless’ community meetings issue NFTs to prove members’ attendance.

Proof of Membership: Orca Protocol grants NFT-based membership to working groups, such as the Governance Agreement’s Subsidy Distribution Committee. These NFTs can be used as credentials to unlock permissions or activities in the chain, similar to those that can be performed by members of the budget committee.

Prediction.

On-chain reputation: The chain application uses NFT ownership as a signal of the quality of the user. Users with specific NFTs will be considered high quality users and will have early or access to exclusive and up-to-date applications. For example, a user with certain Uniswap NFTs may imply that they are a liquidity provider (LP). Certain DeFi agreements will provide early access or higher spending limits for users with certain NFTs.

Communities that award NFTs based on contributions: NFTs can be awarded to community members based on their contributions. for example, specific NFTs can be awarded to the most active community member in governance, the top code contributor, or the most active community member in the comments section, etc.

NFT Ownership Determines Governance Seats: Users are eligible to join the Subsidy Grant Committee if they have NFTs that demonstrate that they have invested in the past or have actively participated in the Governance Agreement.

NFT determines credit score: If a user receives an NFT for good behavior in a lending agreement, the lending agreement may offer them a better lending rate. NFT ownership may be used to determine creditworthiness.

NFT Discovery and Curation Platform
A platform for finding, discovering and organizing NFTs

Similar to the 1990s websites that preceded Google, NFT is a new type of data that cannot be easily searched and discovered. In the future, powerful platforms will emerge to curate, organize, and recommend NFT.

In addition, because NFT forms the basis of reputation and identity on the chain, we will create social networks based on NFT ownership. Social signals will be an important part of the functionality we use to organize NFT.

Current concrete examples.

Social network based on NFT ownership: Showtime (https://tryshowtime.com/) is an Instagram-like platform that serves NFT creators and holders.

NFT curation and search platforms: Traditional web platforms like eBay are now supporting NFT on their platforms, which will be a way for us to search and find NFT. From general marketplaces like Opensea to select experience platforms like Foundation (https://foundation.app/), to hicet nunc, Mintbase and Paras.id outside of ethereum, there exists a large number of crypto-native NFT marketplaces. A more comprehensive list of NFT markets is now available from a number of resources, such as this list from Sean Bonner or this list from Tech Optimist.

Prediction.

NFT version of LinkedIn (contributor to this idea: CuySheffield): While we will earn non-transferable NFT “badges” for past actions such as attending events, voting in DAO, or providing DeFi liquidity, the social media platform will evolve based on the badges we accumulate. We may see an NFT version of LinkedIn where our bio is simply a visual representation of our reputation for past contributions. People can be identified and recruited based on their non-transferable NFT.

NFT search engines (Amazon, Etsy, etc.): We may see more NFT search engines for products. Both Amazon and Etsy already have a number of store owners selling collectibles, and in the future these platforms may also support NFT product searches. Like the previous summary, sophisticated NFT product search, discovery and recommendation capabilities may evolve.

NFT Financialization
NFT is a financial asset

NFT represents ownership of assets that can be used for financial transactions. there are many new mechanisms, such as revenue “unbundling” or NFT fragmentation, to make NFT a more useful financial asset. In the future we will see an exponential growth of NFT as a financial asset.

Specific current examples.

Raising money for charity and the public good: creators and artists can auction NFTs to raise money for charity. Multiple organizations have joined forces to create on-chain funds to fund charitable causes, and NFT creators can pledge to donate a portion of their NFT auction proceeds to such funds, with the proceeds paid automatically when the NFTs are sold. Now when an NFT creator wants to raise money for a specific cause, there is complete transparency about where the money is going behind the scenes.

We are moving from creating NFT to using NFT These five areas are full of opportunity

NFTs can be fungible through fragmentation: NFTX (https://nftx.org/) allows users to deposit NFTs into a pool and mint ERC20 tokens. B.20 is a “bundle” of fragmented NFT artworks from Beeple. WHALE (http://whale. me/) is a token representing a pool of 13,000+ fragmented NFTs initially owned by the pseudonymous collector Whaleshark. me/) is a token representing a fragmented pool of 13,000+ NFTs originally owned by the pseudonymous collector Whaleshark. Rats Vaults (https://rats.art/) allows users to deposit any NFT and receive tokens in return (hint: holders of the specific social token FWB holders have a dedicated pool of funds). Minting fungible tokens based on NFT is an unlocking feature, as the tokens can be used for liquidity mining via the DeFi protocol, improving price discovery for NFT projects, and making NFT more liquid as they can be exchanged via automated market makers (AMM). Members of these fragmented pools may have special rights, such as the right to vote to buy and sell assets in the pool, the ability to lease NFTs in the pool, the ability to collect dividends from NFTs generated by the pool, etc.

NFTs issue “dividends”: collectors can receive new assets based on the NFTs they own. These “dividends” can be issued informally. For example, some collectors receive airdropped new NFTs from artists who wish to promote their work to these collectors because they own famous NFTs. To receive a “dividend” may also require active participation, such as allowing Cryptopunk holders to redeem new Meebits when they launch a mining process. a “dividend” may be a direct distribution of the proceeds earned from an NFT. For example, Yieldguild is a collection of DAOs that buy NFT game assets (such as Axies in AxieInfinity) and then lend them to players so that they do not have to buy the assets up front and can earn income from playing those games. More revenue-generating NFTs are in the pipeline, such as the one Aito announced for integration with Aave.

DAO buys NFTs as an investment: PleasrDAO recently bought Tor’s NFTs for 500 ETH. FlamingoDAO, Whaleshark, and many other DAOs have also made NFT investments.

We are moving from creating NFT to using NFT These five areas are full of opportunity

Forecast.

Generating cash flow with NFT: NFT will soon be able to earn revenue. one way in which NFT can generate revenue is through land rights rent. For example, metaverse landowners in blockchain platforms like Cryptovoxels may charge rent to those who use their land. Today landowners on the Cryptovoxels platform can add ‘partners’ who are allowed to build on their land but don’t own it. Another way in which NFT could generate revenue is by owning the rights to music. For example, a music master could be an NFT that earns revenue every time a song is played. fan communities could team up to buy the music masters of their favorite musicians. such use cases already exist: individuals are renting out their Crytopunk, platforms like reNFT (https://twitter.com/ renftlabs) are experimenting with letting individuals rent NFTs, Varda (https://www.varda.vision/) is experimenting with pledging money used to buy NFTs to generate NFT revenue, and Charged Particles lets users put in a basket of ERC20 as NFT and earn interest on the basket.

Fragmented NFTs plugged into the DeFi ecosystem: Once we have fragmented NFTs into fungible tokens (e.g. ERC20), these tokens can be put into the existing DeFi protocol for liquidity mining. These tokens can be exchanged via AMM, put into lending machine gun pools, etc. For example, a user could fragment an NFT art collection by issuing ERC20 tokens and then trade those tokens through Uniswap. DeFi protocols may evolve with new features to optimize fragmented NFTs, or new DeFi protocols may emerge. Platforms like NFTfi (https://www.varda.vision/) already allow users to use NFT as collateral to obtain loans.

Influencer NFTs: Artists can permanently invest one percent of their NFT sales in a cause, even after they pass away. Creators can create “impact NFTs” that specifically support environmental or social themes.

Pre-token crowdfunding: Projects that have not yet launched tokens can issue NFTs to reward early supporters. Once a project token is launched, it can be airdropped to NFT holders.

Of course, there are many more frontiers to be discovered.

These ideas mentioned above are just the tip of the iceberg of what is possible with NFT. Recent key breakthroughs in the following two areas could lead to an explosion of NFT use cases that we have never seen or even imagined.

The new type of asset that NFT represents: At its core, NFT is a generic mechanism for expressing ownership of anything. So far, we’ve mainly used it to represent ownership of visual images, Gifs, crypto-native games, music, and more. And new types of assets will create new use cases. These could include game assets from traditional game developers, writing pieces (already available through the Mirror platform), movies and videos, sports figures, physical goods, real estate, characters from classic brands like Harry Potter or Disney, asset pools (already available through Charged Particles), and more.

Low transaction costs: Today, NFT use cases exist primarily on Ether, so their operation is hampered by high transaction costs. Use cases can be limited when the cost of minting NFTs or making transactions can exceed $50. This leads us to view NFTs as luxury artifacts most of the time. However, Tier 1 (e.g. NEAR, Tezos, etc.) can mint and trade NFTs for less than a penny of cost. Without the constraint of high transaction costs, developers and creators will create new use cases for NFT that we hadn’t even thought of.

Disclosure: Electric Capital has invested in some of the protocols mentioned in this article.

Thanks to Aliaksander “Sasha” Hudzilin, Curtis Spencer, Cuy Sheffield, Julia Rosenberg, Julia Wu, Ken Deeter, and Willie Maddox.

Written by Maria Shen, Partner, Electric Capital

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/we-are-moving-from-creating-nft-to-using-nft-these-five-areas-are-full-of-opportunity/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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