2021 was the year of NFTs.
CryptoPunks and BAYC, Axie Infinity and CryptoKitties, what started gaining traction in 2017 exploded in popularity — turning many of these brands into household names. And what began as an experimental market, soon led to people paying tens of millions for pieces of digital art.
However the collections which saw NFTs rise in such incredible popularity, aren’t exactly all that’s possible with non-fungible tokens. NFTs as digital art, or more accurately, tokens representing ownership of a piece of digital art, might even be considered a small subsection of what NFTs can be used for in the grand scheme of things.
NFTs are extremely good at one thing in particular — proving ownership. In the current meta, this is proving ownership of your favorite monkey JPEG, or algorithmically generated high art. But there are so many other use cases which revolve around the same mechanics of non-fungible ownership.
Concert Tickets. Membership Passes. Coupons. Programs. Even Property.
These are some of the common examples thrown around and being worked towards for the future as we speak.
People only tend to know NFTs from the perspective of digital art, even as other, more unique uses of NFTs begin to appear. Let’s dive into it, and explore some of the different ways NFTs are being used today.
Not too far off from the original experience, Bright Moments has revolutionized the experience of NFTs, expertly blending together the physical and digital to create something new altogether.
Some of you reading this may be familiar with that feeling of excitement you get when minting an NFT for the first time. The nervous wait for the sale to go live, for your transaction to finally be confirmed, and for you to see your brand new token appear in your wallet.
Bright Moments takes this experience away from the digital world, and focuses on creating an IRL minting experience. Yes, being part of an NFT drop feels exciting, but nothing quite matches the feeling of attending an event in real life (yes, it’s okay to touch grass sometimes).
Bright Moments hosts NFT art exhibitions all around the world, bridging the gap between collectors and creators — but more importantly, bridging the gap between those who are and aren’t familiar with web3.
Anyone can walk in and ask questions around blockchain, and by the end of the day, leave with a wallet created and an NFT minted in that same wallet. Maybe even more crucially though, those who leave with an NFT don’t just have access to the digital art, but had the ability to experience this digital art in person, displayed on the walls of a physical art gallery, and in the presence of the artists and creators themselves.
Turning a piece of digital art into a physical experience adds a brand new dimension to NFTs that is rarely explored in the world of anonymous Twitter avatars and Discord-heavy projects.
Bright Moments also offers mint passes to attend these events, in addition to exclusive drops for owners of their CryptoCitizens collection. Which brings us to a whole other use-case for NFTs — token-gated content.
One of the largest current use-cases outside of digital art (or sometimes in combination with it) is NFT-gating. This means requiring an NFT to be a member of a DAO (learn more about them here), or using NFTs to gate exclusive content in some shape or form. This also includes gating entire communities themselves to only those who hold a membership NFT.
Developer DAO is one such example where holding their genesis NFT unlocks access to their community. Their tokens are quite literally artless, consisting of a plain-white background with some text describing developer traits.
Despite this, they remain extremely popular and sought after because of the other utility they provide.
Developer DAO is a DAO centered around learning and building in web3. Gaining access to a curated group of like-minded individuals can lead to amazing opportunities — special events, job offers, mentorship programs, or simply finding another person to learn with. These are just some of the benefits of joining an NFT-gated DAO like Developer DAO. Aside from specific organizations, there are more modular options which enable NFT-controlled content, such as Lit Protocol.
Still in alpha, Lit Protocol controls their own network of nodes, which utilize threshold cryptography to allow users to encrypt or decrypt data. In simple terms, Lit Protocol can be used to control access to…well, almost anything.
The NFT-gated DAOs and communities we often see now are quite trivial. Own a certain NFT, and have access to a Discord community, or a private Telegram channel. These methods rely on specific tools or conditions, depending on what you want to gate. Lit, on the other hand, could be used to gate static content — e.g. own a specific NFT to gain access to videos or files (think content creators), in addition to dynamic content. In theory, you could use Lit Protocol to limit access to zoom calls, sensitive company data, or another live service based on NFT ownership. This takes NFTs from being ‘just’ digital art, all the way to becoming access credentials.
One of the newer variations on NFTs that is widely anticipated are SBTs, or Soulbound Tokens. Vitalik Buterin, one of Ethereum’s co-founders, speaks about them here, comparing them to World of Warcraft’s soulbound items.
In short soulbound tokens are NFTs, possibly issued by an organization or some party, which cannot be transferred or traded. This may sound counter-productive at first, but there are many situations where you may not want an NFT to be transferrable.
Consider a platform which offers online courses or credentials, with NFTs as a reward of completion. SBTs would prove that those owning the NFT reward truly did attend and complete the course, which builds up a verifiable identity for the owner of the SBT. Compare this to a standard NFT, where you could complete a course and ‘trade’ your earned credentials. Transferability in this instance devalues the token. Those who purchase the NFT from a marketplace didn’t actually complete the course, so they really haven’t earned any kind of qualification.
SBTs, therefore, work perfectly in crafting a digital identity for a user, and for us to start building towards what Vitalik refers to as ‘DeSoc’ — A Decentralized Society.
Along similar lines to SBTs, there are opportunities to create rewards and utility through regular NFTs. You could theoretically reward NFTs for completing a set of tasks, or for fulfilling a certain requirement within a community —as a result, NFTs can also be used to reward a user-base, and commemorate special events.
So who does this kind of thing? You guessed it — us!
Here at Layer3, you can earn NFTs from exploring and discovering all kinds of different protocols in web3. These can be awarded for completing a set of Bounties (a quest) on Layer3 or for reaching a certain level on our platform!
Each NFT has either a timeframe or a completion requirement to claim, making them exclusive to our most loyal users. We’re also working on gated bounties, restricted to those who own Layer3 NFTs or have reached a level requirement on the platform. Look out for some spicy rewards 😉
NFTs, love them or hate them, have emerged as a brand new asset class, and solidified themselves as a new means of storing and transferring value — not only through the means of digital art.