By Dr. Ravi Chamria
“A JPEG just sold for $69.3 million amid the NFT craze”
“Nike sold an NFT sneaker for $134,000”
“Rare Bored Ape Yacht Club NFT Sells for Record $3.4 Million USD”
Unless you’re living under a rock, you must have come across such gripping headlines while browsing your news feed or social media over the past year. Even a host of celebrities like Eminem, Paris Hilton, Justin Bieber, Amitabh Bachchan and Salman Khan have been spotted launching their own NFTs or flaunting their goods.
But, is NFT only about art or collectibles? Monkeys and pixels are cool, but NFTs have so much more to offer. Non-Fungible Tokens (NFTs) are blockchain-based asset-backed tokens that provide clear proof of an asset’s provenance and ownership, an immutable audit trail of asset transactions, and compliance standards. interoperability.
More Than Art – The NFT Use Case Palette
According to a report by AI-based market intelligence platform Report Linker, the global non-fungible token market is expected to grow by $147 billion over the next few years. The study indicates that a larger portion of this, almost half, will be driven by growing demand for digital art and collectibles, followed by games, entertainment and commercial assets.
So thinking of NFTs as just digital art or game collectibles is like thinking the internet is just for sending emails – that’s just the tip of the coin. iceberg! Here are some other interesting uses of NFTs that you might want to explore:
1.Real estate
The real estate sector today is burdened with costly investments, illiquidity, cumbersome procedures and a lack of innovation. If that’s not all, NFTs could solve some of these problems.
With fractional NFTs, a property can be divided into smaller pieces and put up for sale. Now, if someone wanted to buy a $100,000 property but only had $10,000, they could buy a 10% fractional share. Not only would they gain appreciation for physical property, but they could also earn rental income commensurate with their share using smart contracts and wallets.
Also read: OpenSea allows direct access to NFTs for users
Mortgages will become transparent where tokenized real estate assets can participate on decentralized finance (DeFi) platforms to take out a loan with just a few clicks. It eliminates friction resulting in tedious paperwork. The life cycle of a property can also be tracked with an NFT, ensuring you know who the first owner was, whether the mortgage has been paid off and income records are relevant.
2. Consumer goods
Tether co-founder Quigley once said in an interview, “Every consumer product – that can’t be eaten – in the next 10 years will have digital twins. They will have NFTs.”
Here is a small addition. Even though it is an edible product, it will have NFTs, which will help track their journey through the supply chain.
For example: Suppose a company provides wine. They could use NFTs to track every bottle through the supply chain, from factory to customer door. This would allow them to track things like where each bottle is placed at any given time, when it was made, who worked on it, and more. This would ultimately lead to a more efficient and streamlined supply chain.
3. Financial assets
Financial asset management has improved dramatically on the user layer with the fintech revolution, but the legacy backend infrastructure is still plagued with inefficiencies such as longer settlement times, data traceability issues, cost of security and compliance. NFTs and DeFi have shown immense potential to disrupt financial infrastructure.
For customer due diligence and KYC/AML compliances, tokenized KYC using NFTs and smart contracts can solve issues related to data redundancy, security, and updating. This will not only lead to cost savings, but also better compliance compliance.
For invoice discounting, tokenized invoices in the form of NFTs will provide a full trail of transactions behind the invoice, reducing risk and providing much-needed transparency. This will also open up the secondary market for the discounted bill wallet, which will facilitate liquidity for major lenders.
For financial bonds, a Blockchain-based platform can manage the full lifecycle of assets, from issuing digital bonds in the form of NFTs to trading in the secondary market and distributing the return to the market. using smart contracts. The resulting process is much more efficient, user-friendly and compliant.
4.Music and royalties
NFTs have the potential to revolutionize the way artists are compensated for their work. Currently, artists receive a small percentage of the revenue generated by music streaming platforms.
The State of Crypto 2022 report suggests that less than 0.2% of musicians on streaming services earn more than $50,000/year. In 2021, Spotify paid just $7 billion to its 11 million creators, an average of $636 per artist.
With NFTs, artists could sell their songs or albums directly to fans and receive a much larger share of the revenue. NFTs could also be used to create exclusive fan experiences, such as access to VIP concerts or behind-the-scenes footage.
Royalties for all different types of creative work, embedded in smart contracts, will accrue to the creator in perpetuity, without the involvement of intermediaries.
We’ve only scratched the surface
NFTs are still in their infancy and the possibilities of what they can do beyond art and collectibles are endless. We’re on the cusp of a whole new era of digital ownership and the creator economy, and it’ll be exciting to see where that goes from here.
(The author is the co-founder and CEO of Zeeve, a Blockchain infrastructure automation platform.)