From Cryptopunks to Rare Pepes, and even Fidenzas, the most famous and financially successful NFT collections fall into the categories of art and collectibles. While some generative art collections are beginning to gain the attention of the mainstream art world, most NFTs remain a predominantly crypto-centric niche, with mainstream media often failing to grasp their cultural value. Despite this limitation in the types of popular NFTs at the moment, several emerging use cases promise to bring the benefits of decentralized ownership—such as composability, transparency, and security—to a variety of new asset categories.

In this article, we will examine five of the most promising emerging use cases for NFTs beyond art and collectibles, and how these applications can be transformed by bringing them onto the blockchain.

The Current NFT Landscape

Currently, we are in a bearish NFT market, with Nansen data showing reduced interest in all NFT categories compared to a few months ago, although the art category is showing relative strength.

Despite this downturn, several recent research reports predict significant growth in the size of the NFT market over the next decade. For instance, SkyQuest Technology, Verified Market Research, and FactMR predict an NFT market that could reach between $120 billion and $320 billion in the next 5-10 years. This growth is likely to be driven not only by art but also by a much broader range of tokenized assets.

Beyond Art and Collectibles

The five main categories that have recently seen new use cases emerge include:

1. Subscription Tokens

2. Financial NFTs

3. Legal Documents

4. Real World Assets

5. Event and Media Tickets

Much of the development of these new use cases occurred during and immediately after the 2021 NFT boom, when opportunities were in the spotlight and there were ample resources to fund development. If some of these use cases prove their effectiveness, we could see enormous interest in these new applications in the next growth cycle.

In the following paragraphs, we will explore each of these categories in detail, examining how NFTs can revolutionize sectors beyond traditional art and collectibles.

Subscription Tokens

One of the earliest advanced uses of NFTs, beyond collectibles, has been subscription tokens. This concept emerged as early as 2017 with the @HAIRPEPE Rare Pepe card, which allowed holders to access an exclusive Telegram group called The Salon. Since then, various NFT-based clubs have emerged, such as proofcollective, Metaverse, and GrailersDAO, initially targeting mainly NFT collectors.

However, some of these clubs are pushing the boundaries of this idea. For instance, Crypto Packaged Goods operates as a business club and startup incubator, offering benefits that go beyond mere collecting.

Nouns DAO: A New Governance Model

A significant example of how subscription tokens can combine with decentralized governance is Nouns DAO. This organization manages a treasury of over 27,000 ETH, aiming to use these funds to create value for Nouns token holders. Each Nouns token grants one vote and access to private chats to discuss proposals and coordinate the use of the treasury. This governance model allows members to have an active role in the decisions and growth of the community.

Advancing Tools and Accessibility

With the improvement of tools and user interfaces, interacting with NFTs is becoming easier and more accessible even for those without advanced knowledge of digital wallets and self-custody. This progress could lead to an increase in NFT-based membership clubs, with more varied use cases and increasingly diverse sectors adopting this model.

Brand Loyalty and NFTs: The Starbucks Case

An interesting application adjacent to subscription tokens is the use of NFTs for brand loyalty programs. Several brands, including Reddit, Inc., Nike, and adidas, have explored the potential of NFTs and Web3. An innovative example is Starbucks, which launched the Starbucks Odyssey loyalty program in December 2022. This program allows members to earn and purchase digital collectibles called Journey Stamps.

These stamps can be used to obtain discounts, access exclusive content, and win special experiences, such as visits to Starbucks coffee plantations. This type of program not only creates a more engaging and personalized experience for customers but also allows holders to trade or sell their rewards.

Financial NFTs

Financial NFTs are gaining ground in the world of decentralized finance (DeFi), starting with Uniswap V3 positions that introduced the use of NFTs as receipts for user positions in DeFi protocols. This approach allows more information to be embedded in the metadata compared to traditional ERC-20 tokens, offering greater flexibility and transparency.

Uniswap V3 and NFTs as Receipts

In Uniswap Labs V3, NFTs act as digital receipts that store specific details related to the user’s liquidity position. These details include:

• Trading Pair: The pair of assets that constitute the liquidity position (LP).

• Minimum and Maximum Tick: The limits within which liquidity is concentrated.

• LP Position Size: The total amount of liquidity provided.

• Accumulated Rewards: The rewards accrued by the LP position.

This level of detail in the metadata allows for a new dimension of DeFi applications that can leverage these NFTs as base assets, though they have not been widely explored so far.

Other Examples of Financial NFTs

Financial NFTs go beyond Uniswap V3. Some notable examples include:

• LiquityChickenBonds: NFTs here serve as deposit receipts for bond positions, representing a new economic mechanism. Some of these bond NFTs have been sold above face value for their collectible worth.

• Superfluid: This protocol enables streaming payments and has recently started using NFTs to represent money flows. Although currently, these NFTs are primarily visualizations, they will be transferable in the future, offering better transparency and composability.

• NFTfiPromissoryNotes: Used as digital promissory notes, they allow users to pledge NFTs as collateral to obtain loans.

• BendDAO bNFT: A platform that allows pledging NFTs as collateral for loans.

• Solidly veNFT: Introduced by Solidly, these NFTs represent governance votes based on emission tokens.

The Future of Financial NFTs

The use of NFTs in finance is just beginning. NFTs not only provide proof of ownership and details about the position but also open the door to new forms of financing and economic interactions within the DeFi ecosystem. For example, streaming payments through Superfluid show how NFTs can facilitate transparency and composability, improving transaction efficiency.

As the adoption of these tools continues to grow, we will likely see a proliferation of innovative solutions using NFTs for various financial purposes. This will not only make the DeFi system more robust and flexible but also open new opportunities for users and developers to explore creative ways to use NFTs in the financial world.

Legal Documents

Traditional legal documents, often paper-based and complex to manage, present numerous issues related to verification and security. NFTs offer an innovative solution, allowing for the creation of secure, immutable, and easily verifiable digital documents.

Wrappr: Innovation in Company Formation

One of the earliest examples of NFT-based legal documents comes from Wrappr. This platform focuses on transparency and efficiency in creating U.S.-based companies. By using NFTs for incorporation documents, Wrappr facilitates secure record-keeping, rapid incorporation, and document accessibility. The security and transparency of the blockchain enable more efficient management and verification of documents compared to traditional methods. With Wrappr, the formation and management of companies become more streamlined and secure, especially for crypto-native legal structures.

RBB Labs: Legal Summons via NFT

Another interesting case involves RBB LAB, which innovated in the legal field by sending a court summons via NFT in a copyright infringement case. As reported by Cointelegraph, this method allowed RBB Labs to create a verifiable digital document and easily distribute it to the defendants, even if their real identities were unknown. By using only a digital wallet address, RBB Labs ensured that the summons reached the recipients securely and traceably.

Using NFTs for Legal Documents

NFTs can revolutionize the management of legal documents, offering significant advantages in terms of transparency and security. Leveraging blockchain technology, it is possible to create digital legal documents that are:

• Secure: Documents are protected against tampering and fraud.

• Immutable: Once created, documents cannot be altered, ensuring the integrity of the information.

• Verifiable: The authenticity of documents can be verified quickly without the need for intermediaries.

Real World Assets

The tokenization of real-world assets represents one of the most promising opportunities for NFT usage. According to consultancy firm BCG, the tokenization of illiquid assets could reach a market value of $16 trillion by 2030. While some of these assets will be represented by ERC-20 tokens, a significant portion will be NFTs (ERC-721). Currently, tokenized assets via NFTs mainly include luxury goods such as high-end watches, physical collectibles, and real estate.

Advanced NFT Usage for Real World Assets

Historically, NFTs have been used primarily to denote ownership of a physical asset. However, some projects are exploring more advanced uses. A significant example is Silta, a project using NFTs to store and update critical information on infrastructure projects financed through the platform. Silta’s NFTs contain structural, financial, technical, and sustainability data, ensuring easy access to information and preventing unauthorized modifications.

Another innovative example is 4K Solutions, LLC, a platform enabling the tokenization of any physical object. Physical objects are stored in secure facilities by 4K’s partners, while NFTs act as certificates of ownership. NFT owners can redeem their physical items at any time. Among the most popular items tokenized by 4K are luxury watches like Rolexes, which are also used as collateral for loans.

Collectible sports cards have also been tokenized. As the user base expands, the types of tokenized objects are expected to diversify further.

Real Estate Tokenization

One of the largest and most significant assets to tokenize is real estate. The global real estate market was estimated at $326 trillion in 2020, representing a vast opportunity for blockchain tokenization. Several high-profile real estate transactions have already been executed on-chain, indicating growing interest and feasibility.

Real estate tokenization could significantly reduce legal costs and speed up transactions, incentivizing both buyers and sellers to explore this avenue. Currently, legal complexity poses a barrier, but with evolving regulations and resolving legal uncertainties, this sector could see a radical transformation.

Benefits and Future of Real Asset Tokenization

The tokenization of real-world assets offers numerous advantages:

• Easier Access: NFTs can facilitate access to high-value assets, making them fractional and more easily tradable.

• Transparency and Security: Using blockchain, transactions are transparent and secure, reducing the risk of fraud.

• Transaction Efficiency: The digitization of documents and processes related to ownership can significantly reduce transaction times and costs.

Event Tickets

Issuing event tickets as NFTs is emerging as one of the most promising applications of blockchain technology, offering numerous benefits for both event organizers and participants. NFTs ensure exceptional security, making ticket counterfeiting practically impossible, a common and costly issue for many events. This feature is crucial in reducing fraudulent activities and scalping, protecting both organizers and participants.

Benefits of NFTs in Event Tickets

One of the main advantages of NFTs is the ease with which they can be transferred between buyers and sellers. This makes the process of buying and selling tickets much simpler and more secure, even in last-minute situations. The ability to track every transaction on the blockchain adds an additional layer of transparency and trust in the ticket market.

Perhaps the most fascinating aspect of using NFTs for tickets is the ability to offer personalized and engaging experiences for fans. Event organizers can use NFTs to provide access to exclusive content or special experiences, creating a stronger bond between the audience and the events. For example, NFT tickets can include perks like early access to events, behind-the-scenes content, exclusive merchandise, or meet-and-greets with artists.

Examples of NFT Ticket Usage

Several companies are already successfully experimenting with the use of NFTs for event tickets. For example, YellowHeart has partnered with artists like Kings of Leon and Grimes to sell NFT-based tickets. In 2021, Grimes used NFT tickets for her performance at Art Basel, allowing fans to customize their tickets with personal photos or artwork. In 2022, Kings of Leon adopted NFT tickets for their tour, offering fans access to exclusive content, such as behind-the-scenes videos and photos.

@LiveNation, in collaboration with Ticketmaster, has also developed a platform for selling NFT tickets, marking a significant step towards mainstream adoption of this technology. These examples demonstrate how NFTs can be used to create a more secure, efficient, and engaging ticketing experience.

Potential Future of NFTs in Event Tickets

The use of NFTs for event tickets is still in its early stages, but the potential is enormous. By utilizing blockchain technology, organizers can offer a ticketing experience that is not only more secure but also more dynamic and interactive. NFTs can revolutionize how tickets are issued, transferred, and used, enhancing the overall experience for fans.

The Future of Non-Art and Non-Collectible NFTs

In the previous sections, we explored various emerging applications and use cases for NFTs that go beyond collectibles. But what is the true value of tokenizing existing assets? Financial NFTs introduce innovative functionalities in DeFi, but why use NFTs for event tickets, loyalty rewards, or real estate? Some critics might argue that simply putting existing things on the blockchain is pointless. Let’s explore the real advantages and opportunities that could emerge for NFTs beyond collectibles.

Advantages of Tokenization

The new use cases for NFTs can be divided into two main categories: assets with intrinsic value and documentation/information.

Assets with Intrinsic Value

This category includes real-world resources such as real estate, event tickets, subscription tokens, and loyalty rewards. Tokenizing these assets can bring significant financial benefits, including ease of transaction, elimination of intermediaries, capital efficiency, and transparency. The five main NFT financial primitives currently available are:

• Collateralized Loans: NFTs can be used as collateral to obtain liquidity without selling the asset.

• Fractionalization: NFTs can be divided into smaller parts, allowing multiple investors to participate in the ownership of an asset.

• Derivatives: NFTs can serve as underlying assets for options or futures contracts.

• Renting: An NFT can be lent to others for a fee.

• Liquidity Pools: NFTs can be used in automated markets to provide liquidity and earn transaction fees.

These financial tools pave the way for new products that would not have been possible in the traditional financial system.

Documentation and Information

This category includes legal, procedural, and informational documents. Using NFTs to represent documents such as deeds, contracts, and court summonses ensures they are secure, immutable, and easily verifiable. For example, projects like Silta use NFTs to store structural and financial data on infrastructure projects, improving transparency and traceability.

Specific Advantages of Tokenization

Removing intermediaries in the transaction of goods and services can make markets significantly more efficient. The reduction in transaction fees and increased transparency are reasons enough to adopt tokenization on a large scale. Imagine a world where smart contracts can perform legally binding transactions for goods such as houses, commercial properties, or airplanes, saving on legal and intermediary costs.

The subprime mortgage crisis of 2008 is an example of how the lack of transparency contributed to a financial catastrophe. If NFTs had been used to record the ownership and debt of these financial products, it might have been possible to inspect the underlying mortgages and better assess the risks, potentially preventing the disaster.

Moreover, NFTs offer tangible benefits in decentralized ownership and self-custody. For example, imagine being able to rent out your Starbucks rewards or an unused subscription, or obtain loans secured against a variety of assets, such as houses, cars, watches, or art collections.

DeFi and NFTs: An Integrated Future

Decentralized finance (DeFi) and NFTs could increasingly integrate, allowing for the creation of new financial products. Options and derivatives on individual properties, speculation on real estate prices in specific neighborhoods, or insuring property prices through put options are just a few possibilities. This could not only attract institutional investors but also revolutionize how individuals and companies manage their assets.

Conclusion

NFTs show enormous potential beyond art and collectibles. Tokenizing assets can unlock illiquid resources, improve transparency, reduce transaction costs, and offer more personalized services. However, there are challenges to address, such as legal and regulatory clarity and the technical sophistication required of end-users.

By overcoming these challenges, NFTs can revolutionize sectors such as real estate, legal documentation, and financial activities. With ongoing innovation and collaboration among developers, users, and regulators, we can expect a future where NFTs play a crucial role in transforming industries and creating new opportunities.