Monetisation, return on investment, social impact: What is the utility of NFTs?
The demand for NFT digital art has expanded the collection and possession of digital artwork into the world of utility.
Guaranteed ownership, provenance, and IP protections are core innovations that have defined the emergence of NFT artworks.
However, the continued exploration of Non-Fungible Token technology together with digital art is revealing a range of interesting use cases in monetisation, ROI, and social engagement.
Why do people pay for NFTs? The answer is utility.
The unique value of NFT art is a combination of artwork ownership and utility. Creating new merits for NFT holders through a sense of inclusion, empowerment, and appreciation, utility is aiding the long-term sustainability of NFT art.
What are real examples of NFT utility?
Unlike any other art investment, creators of NFT art can integrate access to communities, physical replicas or prints of digital art, merchandise, redeemable experiences, and even voting rights with the purchase of their artworks.
Doodles NFT collection has multiple community functions including a community treasury called DoodleBanks which raises funds for community projects which are voted on by Doodle holders. 1 Doodle = 1 Vote.
NFT utility in monetisation
NFT-enabled royalties have created real benefits for artists creating new pathways to monetise their work and generate revenue.
Smart contracts, written into NFTs and automatically executed at the point of sale, allow creators to pay themselves a percentage of each transaction for their art in perpetuity.
Prominent digital artist Mike Winkelmann (Beeple) is a shining example, having a 10% royalty payment written into each transaction of the NFTs he produces.
NFT utility is a platform for social endeavours
Large NFT collections can be fractionalised, which enables multiple users to own a percentage of a single NFT - The NFT is then able to be shared amongst individuals united by a common goal.
This common goal can materialise through access to digital and real-life communities, events, and voting rights for decentralised autonomous organisations (DAO) creating a powerful sense of community.
The commonality through NFT ownership has been consistently leveraged into fundraising for a range of humanitarian projects, charities, and social causes, funding programs like Afghan Family Emergency Needs, Suicide Prevention, and Médecins Sans Frontières.
NFT utility is a powerful tool for brands and artists
The ability for NFTs to drive brand awareness, increase customer loyalty and monetise user bases is a winning combination for artists and brands alike.
‘Transformative Tacos’ Just one of the 25 gifs sold by Taco Bell for only $1.79 initially, eventually raising $200,000 from resales for their Live Mas Scholarship.
Brands like Taco Bell have embodied this dynamic, selling 25 unique GIFs to support their Live Mas Scholarship.
By attaching tokenisation, merchandise, and corporate social responsibility with digital art, brands can engage consumers while delivering a new platform for artists.
Why is NFT utility important for art consultancy? What does this mean for artists?
NFTs have changed the way buyers and sellers of digital art interact by creating additional utility for consumers at the point of sale.
With each NFT purchase, individuals unlock greater investment in a brand, community, and the artist. This is redefining the value proposition of owning, selling, and importantly creating digital art with a purpose.
Repositioning the NFT art marketplace away from speculative bubbles and arbitrary prices is a fundamental development for the longevity of the digital art industry.
Working to affirm the sustainability of digital art, Sugar Glider Digital is championing better opportunities and a stronger platform for artists
Words by Cam Thach