Five Industries that will be Revolutionized by NFTs
We’ve all heard about digital art NFTs by now. But what other industries will benefit from this new paradigm?
Worldwide lockdowns have catalyzed the NFT surge.
The pandemic has impacted society worldwide, and pushed it further online. Personal isolation, remote work, and the growth of digital nomad class has amplified the human habit of living in the online world. As a result, more people are participating in new immersive digital modes of living, and are increasingly investing in digital assets in preparation for a metaversal future. Thanks to the crypto economy, 3D worlds like Facebook Horizon, Fortnite, Decentraland, Roblox, and Sandbox became a daily routine not only for teenagers but also for tech entrepreneurs.
The virtual economy now has broadly accepted value for investors. Bitcoin’s rise continues, while a real decentralized economy develops around cryptocurrencies and NFT’s. People are ready to pay thousands, sometimes millions of dollars for digital art, digital lands, digital wearables. NFTs, once ridiculed as a lark, are fast becoming a part of a new digital reality.
Crypto and NFT proponents are now faced with the question of how to create and sustain real value for their digital assets. Who will use them, where, and with what purpose? NFT’s will be widely used as a form of economic exchange in Metaverses, but which metaverses will survive amongst the myriad emerging metaverses? And what about real-world utility?
NFT’s are the most promising revenue model for the Metaverse
What is an NFT again? According to the official Ethereum website: “NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain — no one can modify the record of ownership or copy/paste a new NFT into existence.”
Adoption of NFTs is growing at warp speed. In the first half of 2021 NFTs generated more than $2.5 billion in sales. According to data from market tracker DappRadar “NFT sales volume surged to $10.7 billion in the third quarter of 2021, up more than eightfold from the previous quarter”.
So far the most popular NFT’s projects are from the Art, Avatars, Gaming, and Music areas:
- CryptoPunks
- Beeple
- Art Blocks Curated
- Bored Ape Youcht Club
- Mutant Ape Yacht Club
- Dapper Labs
- Rarible
- Meebits
- Pudgy Penguins
- Cool Cats
- Gutter Cat Gang
- RTFKT x MURAKAMI
- Kings of lion
Outside of digital art, which industries will benefit most from NFTs in the future?
1. Carbon offsets
The BCT (Base Carbon Tonne) — Klima DAO’s reserve asset — is a carbon offset index token with an exciting model for incentivizing and capturing the value of carbon offsets.
TCO2 Carbon offsets can be brought on-chain using the Toucan Carbon Bridge. And each offset is equivalent to one tonne of carbon dioxide emissions mitigated or removed from the atmosphere from verified projects across the globe. Different TCO2 tokens can represent carbon offsets from different projects, e.g. a forestry project in Brazil or a soil carbon project from the US.
Key characteristics of the carbon offsets are brought on-chain when it is transformed into a TCO2, including Project Name, Serial Number, Project type (renewable energy, forest carbon project, blue carbon, etc.), Vintage Year, and Verification Standard
However, creating a liquid on-chain market for carbon requires standardization. This is the role of the Base Carbon Pool — each TCO2 can be locked into the Base Carbon Pool in return for a BCT token.
2. Real Estate
The benefits of NFTs for the Real Estate industry are obvious. Anyone who has bought or sold a property knows the reems of paperwork, labyrinthine process, escrow accounts, and crazy fees that are involved. NFTs have the power to clear all this away and make the transaction a lot simpler, proving a transfer of ownership has taken place with a single ledger entry on a blockchain.
By creating NFT’s for the property rights, real estate companies like Propy and The Crypto realty group are trying to save money and time on transactions:
“Imagine I could buy a house as an NFT, and instantly borrow against the NFT using DeFi or TradFi products with a 2–4% interest rate. Why would I ever go through the brain damage of using Wells Fargo WFC -0.4% or Chase, with their months of nightmare due diligence?” — Henry Elder, President of IBREA (International Blockchain Real Estate Association).
“This opens up an entirely new playing field for home ownership,” said Piper Moretti, CEO of The Crypto Realty Group powered by EXP Realty, “For years platforms have been attempting tokenization of real estate assets and closing processes with somewhat marginal success, but this adds a whole new level for democratizing real estate.”
It remains to be seen how quickly the real estate industry will adopt this new model, and whether governments will recognize the benefits.
3. Virtual Real Estate
With the development of the Metaverse, virtual real estate has emerged as an exciting, and unexpectedly lucrative trend. Surprisingly, very large amounts of money are invested in virtual real estate, e.g. pieces of “land” or buildings which exist only in the digital space and backed by blockchain technologies. The value of digital real estate is very difficult to prove, requiring a well-developed Metaverse with its own cryptocurrency and a large amount of constant users to guarantee demand.
Regardless, many people are willing to pay large amounts of money thinking that later they can create something valuable for Metaverse users on this land, like gaming experiences, NFT marketplaces or maybe a digital art exhibition. Virtual real estate may also serve as a new way of marketing your tangible products and services to Metaverse users.
As an example, Decentraland sold a virtual plot of land for over $900,000 in June 2021 — the most lucrative sale of a virtual land so far. Earlier, another blockchain-based virtual world The SandBox sold virtual lands for approximately $650,000. Boston Protoc bought a virtual plot of land in Decentraland for more than $700,000 earlier in June. Republic Realm, the company who invests in digital lands, received huge support from the largest investment funds in blockchain worldwide including Galaxy Interactive and Prosus.
4. Live Events
The $15.9 Billion second market for event tickets has become the scourge of event promoters and fans worldwide. Second hand ticket sites are mired in unreasonable prices, fraud, scalpers, and bad actors of all kinds. Meanwhile, promoters rarely see a dime of the earnings from the sale of tickets made on the back of their hard work and investment. Some fan-first players like TicketSwap and Tixel have tried to fix the problem with AI fraud detection algorithms, and strict price controls. But the bad actors seem to find a way around every barrier.
Enter the Ticket Fairy, with their NFT-based ticket platform. Combined with the rigorous KYC (Know Your Customer) and security of leading crypto wallets, Ticket Fairy has a chance at cracking the second market puzzle. NFT tickets can be validated and tracked back to the original creator to ensure authenticity. Moreover, NFT tickets can be use for virtual and metaverse events, along with proof of attendance. Event Promoters are watching closely as ticketing platforms look to solve the second market’s myriad problems with this new paradigm.
5. Consumer & Luxury Goods
Consumer packaged goods (CPG) companies like Ben & Jerry’s and Stella Artois are launching NFTs, while fine whiskeys are being bought and sold on BlockBar.
Luxury collectible automotive brands and yacht brands are tokenizing their products too. You can now create your own digital McLaren formula one car, and tokenize it. “Back in 2019, an anonymous buyer paid $110,000 for the NFT that represents the first digital Formula One car made for the blockchain-related game F1 Delta Time.”
While to many, the NFT craze appears to be a reckless gold rush, the debate about the value and utility of NFTs appears to be over in the eyes of major brands.
As ever, the advertising industry is licking their chops in anticipation of a new frontier of consumer attention.
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Thank you for reading!
The article was written by Anastasia Vitruk, Growth Manager
Editor: Joe Foxton
Visual Curation: Justyna Cyrankiewicz
With love, HOO KOO E KOO 💛
