Learning to increase your project’s NFT usefulness comes down to identifying the value you create for your customer, community, and stakeholders. We go in-depth on how to create such value.
Understanding the difference between these three audiences and how your nft project serves them individually is essential.
Of course, each project is different; however, the projects with more utility or usefulness tend to have more value in the long run.
Whether you are still in the early stages of planning to launch an NFT or already have an existing NFT project on the market, you’ll want to consider your project’s usefulness. The more beneficial your nft collection is, the more sales you’ll get. It’s a snowball effect.
First, define what makes nft useless and common mistakes nft project owners make when defining their nft utility. Lastly, we will go in-depth on nft utility examples which are helpful and doing their best.
Let’s dive in:
What Makes NFTs Useless?
Some nft projects only offer a photo like a JEPG or PNG, which doesn’t provide enough value to their customers, community, and stakeholders. While the artwork is valuable, it doesn’t stop someone from asking ‘what does it do?’ once they have it.
Instead, your nft projects need these three ingredients to become useful; accessibility, convertibility, and viability. The actual nft utility has one or all of these three ingredients. What matters most is having some form of these ingredients to produce a successful nft project.
- Accessibility: Giving permission or access through excluding and including. For example, if your Non-fungible token becomes a ticket to an exclusive event in-person, only those with the NFT can get in.
- Convertibility: Turning an NFT into something else. For example, if you have a digital piece of art and your nft collection provides the utility of converting that digital art into physical art. Another example is liquidating an NFT into cash.
- Viability: Keep alive or survive when others can’t. For example, building a community around your nft project where you have a competitive advantage others can’t easily replicate. Another example is a well-established brand known as a blue chip nft. Then, even during a crypto winter, you will survive with ease.
Are NFTs Useless?
Not all NFTs are useless; in fact, the majority of NFTs have utilities already. However, there are two distinctive ways to look at the usefulness of a non-fungible token.
- The token itself. What value does the token bring, or what doesn’t it bring?
- Everything else beyond the token. What value wouldn’t exist if the token wasn’t there?
Fundamentally, non-fungible tokens show proof of ownership on the blockchain’s digital ledger. That’s the value the token itself brings.
However, the non-fungible token doesn’t give you ownership over the asset’s copyright (photo, video, or text file); it is only verifiable and acts as a certificate that is sharable to others.
The value beyond the token becomes the actions others take.
If someone were to buy an NFT and trade it, the exchange would create new value for both parties.
Another example is if an NFT gives you access to an exclusive concert for a musical performance only nft holders can see. Showing your NFT as a ticket to get permission or access becomes the nft utility.
Biggest Mistakes When Thinking About NFT Utility
The most common mistake nft projects make when deciding on nft usefulness is giving their inventory away. For example, buy three mint nfts of our project, and you get nine more.
It dilutes the value of the first nft, and while it sounds like a compelling strategy to get your nfts sold out, it’s like you’re discounting your artwork. It sounds like buy 1 gets two free at a supermarket.
1. Thinking Your Community Is Your Customer
Remember, there’s a big difference between your customer and your community.
You can have community members who become customers. However, your community is a living, breathing organization growing and changing.
2. Asking For Payment First Before Providing Value
Throwing up a landing page with a ‘mint your nft‘ copy does not make your collection unique or original.
You’re putting up a sign saying ‘pay me’ and providing nothing in return.
No one would take that deal, even if it were the only deal available. So first, provide value and then monetize. Minting an NFT isn’t the value. It’s the story, artwork, or message that’s the value.
Best NFT Utility Ideas & Examples
Understand different audiences value different utilities.
We share a few nft utility ideas based on whether you are a collector, community member, or project stakeholder.
While some utilities can be attractive to more than one type of individual, it’s also possible only one utility speaks to one type of individual. The best nft usefulness comes from having something for everyone; remember accessibility, covertibility and viability.
It’s helpful to collectors, but stakeholders and community members, wouldn’t see much value in it. So here’s a list of utility ideas that go beyond the basics:
For Collectors
As an NFT collector, you care most about what you’re getting when investing in the nft project and if the benefits outway the upfront cost.
How the nft project delivers on those promises matters most to them because, without the collector, there’s no existing project.
- Accessibility: Merchandise (For example, Rebel Rabbits hoddies)
- Convertibility: Physical Artwork of Digital Pieces
- Viability: Supportive Discord Mods (For example, NFTNEWSPRO)
For Community
As a community member, you care most about how the community benefits most and the overall health of the community.
Are others engaging and friendly? Do they network and make you feel like you belong? Will they be around for a long time, or is this temporary?
- Accessibility: In-Person Events (For example, three years of access to VeeCon)
- Convertibility: Community Wallet (For example, 99 Originals DOA from Logan Paul)
- Viability: Voting System (For example, BatCowl voting to impact DC comic storylines)
For Stakeholders
As stakeholders, you care about NFT sales volume, floor price, and how you are progressing on your nft roadmap. Teammates are your most valuable assets, and making them feel secure means the most to you. Without a team supporting this nft project, it wouldn’t be successful.
- Accessibility: Whitelisting (For example, CoolPigs rewarding early supporters)
- Convertibility: Royalties Percentage (For example, Doodles gives royalties)
- Viability: ‘Blue Chip’ Reputation (For example, BoredApes or Azuki is a well-known brand)
Why NFT Usefulness Starts With Proper Roadmap Thinking
The number one reason why most nft projects fail is due to a lack of planning and creating a proper nft roadmap. So you’ll want to make the best decisions on nft utility during your roadmap planning phase and avoid making this common mistake. Here are some tips to ensure you get this right:
Start With Your Roadmap & Define Your NFT Utility
Smart contracts help influence action, and roadmaps support the future planning of those actions. Remember these three different audiences as they each appreciate different utilities.
- Customers – Individuals interact with your NFT collection (Buying, Selling, Trading).
- Community – Twitter or Discord Members, Email Subscribers, or Social Media Followers.
- Stakeholders – Other teammates like the CEO, Marketing Manager, and Creative.
Creative Utility Examples Every Roadmap Needs
Here’s how you should be thinking about NFT utility:
1. Go beyond giving away your product
- All expense paid trip.
- Access to community wallets
- Voting options
- Ability to impact the story
- Hosting IRL events
- Free to Play / Play to Earn
2. Limited Utility That Proves Very Little Value
- Reach 1000 followers on our Twitter account
- Exclusive discord in-chat access with nft project founders
- Giveaways of your own NFTs
After ironing out which nft utilities you plan on rolling out, consider what benefits you want nft holders to have.
Especially for those nft collectors who plan to hold for a long time, you want to reward them appropriately.
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