Introduction
Every day we receive news about NFT collections that are very successful and that provide great benefits to their creators. But we overlook the thousands and thousands of collections that populate the Marketplaces day by day without any kind of value or possibility of success. This is demonstrated in a study published by the specialized magazine Business Insider.
This leads us to wonder what makes some collections so successful that sometimes even seems disproportionate and others fail.
I will try in the following lines of this post to develop some ideas of what in my opinion gives value to these assets.
“We overlook the thousands and thousands of collections that populate the Marketplaces day by day without any kind of value or possibility of success”
Pillars that give value to an NFT
Some authors mention these three concepts as the pillars that give value to an NFT.
Utility:
This characteristic is associated with its real application, whether in the physical or digital world. For example, some NFTs are more than just collectibles, since they can be used in games, allow us to access a certain community or simply function as a ticket to any event both in the metaverse and in the real world.
Tangibility:
Some NFTs are tied to real-world objects, providing value in terms of tangibility. In essence, anything can be supported by an NFT, for example Alfa Romeo for a new model SUV certifies the car upon purchase in an Nft and then records and retains the data for the life of the vehicle.
Rarity:
This factor means how rare and “hard to get” a specific NFT is within your collection. Another rarity factor is the effect that such an NFT would provide in, for example, a video game if it had a rare feature.
Other value propositions:
In my opinion, this initial enumeration is very good, but there are a number of factors that can give value to these digital assets. Below I will list some of the ones that I think are important, but the list of possible attributions of value can be as long and inexhaustible as creativity. from its developers.
Community:
An NFT can be, for example, the entry ticket to a certain community. Where, for example, influencers or content creators give access to the holders of said NFT to exclusive content, talks or even physical or virtual meetings with the creator.
Marketing and customer loyalty:
Many brands that already have a well-developed community, loyal and with a high sense of belonging, could use the strategy of launching NFT collections whose owners can access certain limited editions, access to VIP rooms, meetings, events or even simply discounts for a limited time or lifetime on your products.
Experiences.
What if the holders of a certain NFT have access to certain experiences in the real or virtual world, access to a concert, one week a year at a vacation resort, a balloon flight or a clinic for their favorite sport with an athlete from elite.
Registry.
We have advanced in other posts about the advantage of decentralized registries. The possibility of using an NFT as a means of registering the ownership of an asset in the physical world will automatically assign the value of said asset.
Solidarity:
Why not use NFTs for charitable causes? What if a digital asset certifies that we participate by collaborating with a certain cause and that the funds raised and their use can be seen in a completely transparent way in a certain blockchain. The advantage is double, on the one hand, whoever makes the contribution will receive a digital piece in return in gratitude for his donation, which he can treasure and keep as a memory of his action; and in turn, due to the very nature of NFTs, the collection and use of the funds collected can be tracked with total transparency.
Giveaways:
Another way to assign value to an NFT could be by raffling off certain physical assets or other digital assets among the owners of the pieces in the collection.
Stake:
Aiming for a decentralized network means that no entity can decide whether or not certain content remains on a certain platform.
This a priori has pros and cons since we might think that inappropriate, abusive or offensive materials could be available to the entire public. But if these platforms provide ways to remove certain content at the suggestion of a user by voting in DAOs, this would a priori make such decisions more democratic. Then, the access and participation to those DAO’s could be validated by an NFT.
“the list of possible value attributions can be as long and inexhaustible as the creativity of its developers.”
Conclusion
In conclusion, the value of NFTs (non-fungible tokens) can depend on various factors, such as utility, tangibility, rarity, community, marketing and customer loyalty, experiences, narrative and authenticity. Some of these factors may be more relevant to some NFTs than others, and the value of an NFT is not necessarily determined solely by its market price, but also by the holders’ emotional connection to the NFT and its token value. It is important to note that not all NFTs have the same value or success, and some may have higher market demand and value than others.
At NFT Smart Design we can advise you on how to assign value to your NFT project. Click here and register to get in touch and together we can see how we can help you.
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