As adoption increases, the potential use cases of non-fungible tokens continue to rise across different sectors and industries.

What Makes NFTs Popular?

NFTs are unique tokenized versions of digital or physical assets such as images, music, videos, physical art pieces, legal documents, tickets, or other valuable items. The main objective of NFTs is to effectively assign a claim of asset ownership for a digital asset that anyone can verify via blockchain.

The inherent properties of non-fungible tokens, including transparency and immutability, are very useful for different industries within and beyond the technology and blockchain sectors. Other properties that have made these assets popular include:

Standardization

Non-fungible tokens on public blockchains have common, reusable, and inheritable standards relevant to all NFTs.

Interoperability

NFT standards allow these tokens to move easily across various blockchain ecosystems and applications. Once an NFT launches, it is usually transferable across multiple NFT marketplaces, metaverses, games, and more. This interoperability is reliable because NFTs operate using open standards with clear, consistent, and reliable APIs for reading and writing data.

Tradability

Through NFT interoperability, non-fungible tokens become available for trading on public marketplaces like Opensea. Users can move NFTs outside their original environments and into marketplaces where more potential buyers may view them and make purchases.

Rarity

NFTs allow developers to limit the supply of non-fungible tokens within a specific collection. This maintains the rarity of minted NFTs and helps define each token's value within the collection. NFT rarity is particularly important for art since the industry largely depends on the scarcity and provenance of an original piece.

Top NFT Use Cases in 2022

Some of the most innovative NFT use cases in 2022 include:

Content Creation and Social Media

NFTs have become an effective tool used by content creators to eliminate intermediaries known to clog the process of distributing to fans and followers. Content creators also use online auctions to give their followers a unique purchasing experience where several people can bid to buy the assets.

Furthermore, NFTs help artists earn from content creation by exercising their ownership rights in a digital manner. Artists can generate royalties by selling their NFTs to buyers who can verify the authenticity and ownership of the assets on the blockchain.

Intellectual Property Rights

Intellectual property (IP) refers to intangible assets, including patents and copyrights, resulting from a person or organization's creativity. Tokenizing patents as NFTs can open new ways for creators to make profits by commercializing their IP. Also, using NFTs to trade intellectual property makes business transactions more open, secure, and accessible.

Loans

Many decentralized finance (DeFi) platforms let people use NFTs as collateral to take out crypto loans via collateralization without credit checks. These protocols also allow users who supply NFTs into the trading pool to earn passively. Some of these protocols feature lending pools for various blockchain assets, including NFT collectibles, metaverse tokens, and cryptocurrencies. Examples of these DeFi platforms include Nexo, Arcade, and NFTfi.

Goods and Supply Chain

Blockchain technology has proven highly efficient for supply chains and e-commerce. Many well-established companies have already started using blockchain tech to track products through the supply chain. Since supply chains are simply a series of product exchanges, tokenizing these products immediately makes it easier to trace and verify each item, while determining who is responsible at any point of the lifecycle. Additionally, the transparency and immutability of blockchains ensure that the supply chain data is reliable and accurate.

Digital Fashion Collections

Digital fashion brands now leverage NFTs to sell and proliferate their products. The unique traits of non-fungible tokens strengthen the trust between designers and their potential customers since it eliminates the likelihood of a counterfeit purchase. Using NFTs, brands can track original collections and prevent the creation of fakes. This is especially useful for physical pieces or collections sold through third parties, such as auction houses.

Metaverse Real Estate

NFTs offer a unique way of creating and owning property in metaverses. Users can buy digital pieces of real estate in these metaverses and erect buildings for sale, personal use, or rent to other users or businesses in the metaverse. There are also several related metaverses with NFTs used for gaming that people can upload to diverse audiences via NFT marketplaces. Some popular metaverse platforms that utilize NFTs include The SandBox, Decentraland, Axie Infinity, and Enjin.

Proof of Credentials

NFTs are used in academia to store credentials, proof of qualifications, and verify sensitive information. Storing essential details on a blockchain creates a permanent and non-editable entry on a distributed ledger that prevents people from falsifying credentials.

Real-Life Examples of NFT Use Cases

The following are a few real-life examples of known brands that use NFTs to achieve various goals:

Coca-Cola

Coca-Cola entered the fast-growing metaverse sector by issuing the brand's first-ever NFT collectibles, successfully reaping a winning bid of $575,883.61 via an online auction. The beverage giant's use of NFTs shows how these assets can improve community involvement while providing an additional revenue stream.

IPwe and IBM Collaboration

IPwe, a blockchain-enabled intellectual property transaction platform, collaborated with IBM to use NFTs for corporate patents. IPwe and IBM aim to use NFTs to increase patent efficiency, make patents more easily commercialized, and ensure sufficient liquidity for innovators and investors.

Digital Fashion

Nike became the first global brand to purchase an NFT studio after it bought popular digital fashion collectible company RTFKT in 2021. Through this acquisition, Nike shoes will now be available for purchase and use by avatars across metaverses. Many other global fashion brands have explored NFTs, including Gucci, which created a digital version of the Gucci garden exhibition and sold NFTs of popular Gucci bags and other items.

NFTs Moving Forward

The NFT sector's popularity is bound to continue growing as more use cases emerge. Like the internet, many of the use cases of the future have not even been thought of yet and will continue to develop over time as more people get involved in the space.

Many sectors are now adopting NFTs by integrating blockchain technology into several operational processes and tokenizing varying assets. As the general use of blockchain technology increases, mainstream adoption of non-fungible tokens will also rise.

Interested users can begin by setting up an AtomicDEX wallet to purchase crypto assets that anyone can use to acquire NFTs across various marketplaces.