With its promise to transform the internet into a more democratic and inclusive space, Web3 has quickly earned abundant praise. Among its many advancements, Non-Fungible Tokens (NFTs) have proven to be among the most dynamic, gaining traction worldwide.
Certain industry reports predict an astonishing surge in the NFT market, estimating its value to reach a staggering US$231 billion by 2030.
Let’s explore some of the existing and emerging real-life use cases of NFTs.
Brand use cases for NFTs
Many global brands with household names, such as Nike, Starbucks, Adidas, Tiffany, Gucci, Budweiser, and McLaren, have entered Web3 and made NFTs a core component of their Web3 strategies.
From avatars to collectibles to in-game assets - NFTs have become a mechanism leveraged by brands across industries to extend their presence in the virtual world, reaching existing fans and new fans alike.
Meanwhile, globally-revered brands like Renault have emerged with full-fledged immersive NFT stores rather than a line of unique NFT collectibles - creating new revenue streams in the process.
Digital collectibles
Apparel and sportswear brands like Nike, Adidas, and Lacoste have adopted NFTs, demonstrating different use cases for NFTs with their drops.
Nike, for instance, released CloneX digital avatars and Cryptokicks digital sneaker NFTs. Adidas collaborated with famous NFT lines like Punk Comics and Bored Ape Yacht Club after releasing its initial 30,000-item-strong NFT collection aptly-named 'Into the Metaverse.'
Lacoste's UNDW3 NFT collection had more than 11,000 unique digital collectibles that blended fashion into Web3.
Phygital & NFTs corresponding to product lines
Fashion and lifestyle brands like Tiffany and Gucci also embraced NFTs to encourage community engagement and loyalty. NFTiffs, an initiative by Tiffany, helped guarantee ownership of physical pendants with the owner's crypto punk collectible. Gucci launched multiple NFT initiatives, including Gucci Vault, Grail, and Town.
Budweiser launched an NFT collection corresponding to their unique beer can designs, while McLaren developed NFTs corresponding to their cars. An exciting initiative from Nickelodeon allowed consumers to buy PFP collectibles of their cartoon characters from retro Nickelodeon shows.
Web3 loyalty programs
Brands are also leveraging NFTs as part of their next-generation loyalty programs. Starbucks' Odyssey famously brought a version of coffee brand's rewards program on-chain with an NFT platform, inviting members to purchase or earn NFTs which can be used to unlock rewards. In other cases, brands have used token-gating to reward their loyal fans with access to products, sale prices, or other perks.
NFT Event ticketing
Ticketing and event access are other emerging use cases for NFTs. Companies like Yellowheart and Guts have brought event ticketing on-chain in an effort to solve for some of the event ticketing space's challenges related to ticket fraud and often unfair secondary sale prices. In 2022, Ticketmaster enabled event organizers to issue NFTs tied to tickets, expanding its NFT support in 2023 by enabling artists and event organizers to token gate access to their ticket sales and reward their most dedicated fans with early access to tours.
Speaking of events and NFTs, we can't forget to address POAPs (Proof of Attendance Protocol), these NFTs can be issued to attendees of an event to demonstrate someone attended, or as a virtual memento of an event or interaction.
Property ownership
It's already pretty well known that you can purchase property in the metaverse, but NFTs can also represent ownership of physical property. Perhaps the most well-known example thus far of using NFTs to represent physical property ownership is the California DMV's digitization of vehicle ownership. By moving titles and ownership records on-chain, the state hopes to help prevent fraudulent vehicle sales, as well as enable things like fractional vehicle ownership through DeFi protocols.
NFTs in supply chain management
Solving supply chain challenges is one of the direst needs of the hour. Data suggests that close to 85% of an organization's environmental, social, and governance-related impacts occur in the supply chain.
Yet, 49% of businesses do not have any knowledge of major fault lines that exist at key touchpoints within their own supply chain. The reason is lack of visibility.
Counterfeit goods are one of the severest outcomes of lack of supply chain transparency. In 2018, counterfeit goods cost global brands more than US$230 billion. The pharmaceutical industry suffered losses close to US$200 billion.
NFTs can make significant improvements to supply chain gaps and issues by making them more transparent and efficient. Acting as "digital twins" of real-life goods, NFTs could help improve traceability.
Phygital NFTs have already proven their worth when tagged to real-world goods. The immutable and transparent digital record of an NFT can improve supply chain efficiency with effective settlement and documentation processes.
Furthermore, using real-life-mimicking NFTs empowers customers with the knowledge of a product's trajectory - where it comes from and the routes it takes before reaching their hands. At the end of it all, the presence of a digital twin also helps brands improve community engagement and interaction.
NFTs for cause
Charities and social impact organizations have discovered the potential of NFTs in raising funds for causes. For instance, Edward Snowden's Freedom of the Press Foundation auctioned an NFT to raise more than US$5 million in 2021.
Globally known creators, like Beeple, have chosen NFTs to create foundation-specific works they could auction and donate the proceeds. Charities have also turned their creative assets into NFTs to raise funds.
Corporations, too, have risen to the trend. Taco Bell sold 25 taco-themed NFT GIFs to raise funds for Taco Bell Foundation's Live Mas Scholarships.
Helping Web3 reach its future potential
Above we discussed several examples of existing and emerging use cases, but what we currently see in the ecosystem represents just the tip of the iceberg of possibilities for NFTs in the future. Enabling the future potential of Web3 requires a robust ecosystem that enables builders, creatives, brands, and developers to innovate rapidly.
Mnemonic provides the growing ecosystem with NFT data, analytics, and insights. Our APIs power Web3 products including the leading Web3 wallets, marketplaces, and accounting tools. Our insights enable businesses to understand their audiences and create tailored experiences for them.
