NFTs have taken quite the beating as of late.
After a stellar 2021, hopes that the market would reach new highs this year are somewhat fading amidst repeated scandals, digital heists, regulatory crackdowns and a downturn in the crypto market. But despite all the bad rap, blockchain technology has continued gripping investors, collectors and newcomers.
Non-fungible tokens are slowly emerging as a central element of digital projects across a number of industries, from fashion and music to gaming and finance.
Soon, we might be using this technology in our daily lives, so we’ve decided to put together the list of the different types of NFTs - and NFT projects - you might want to get familiar with today.
10 Types Of NFTs You Need To Know About
Digital Artwork NFTs
It was March 2021 and the world was stunned by the sale of what was widely dubbed a “JPG File” for an eye-watering $69 million. Except, that this file was in reality the NFT of digital artist Beeple’s ‘Everydays: The First 5000 Days’, auctioned by Christie’s. Although the NFT market had been gathering some momentum up until that point, in large part thanks to viral tokens like the Nyan Cat and CryptoPunks, the multi-million sale marked the true beginning of the hype.
Digital artworks became the preferential source of NFTs, with high-profile artists like Pak, Grimes, FEWOCIOUS and Micah Johnson debuting their first collections.
Banking on the benefits enabled by blockchain technology like digital scarcity, proof of authenticity and ownership, and economic opportunity creation, a number of NFT collections rose to fame.
The Bored Ape Yacht Club and CryptoPunks are widely considered some of the most influential digital art NFTs, each featuring unique tokens with distinctive traits and characteristics.
More recently, we’ve seen the emergence of generative art NFTs as a novel category of digital assets and NFT art created not by the human mind but by artificial intelligence.
It’s easy to see why there are so many non-fungible tokens of digital artworks as creators can easily create an NFT of their work and monetize it freely through NFT marketplaces such as OpenSea and Rarible.
The gaming industry has been one of the first to adopt blockchain technology across several elements of its ecosystem. We’ve delved extensively into the new gaming paradigms arising from the surge in crypto games before, namely Play-to-Earn.
NFTs stand at the center of this revolution, where players have total ownership and control over their in-game assets. This has been a great incentive for video game fanatics who, now more than ever, are willing to go to great lengths to purchase in-game assets to get the best out of their gaming experience.
Clearly, NFT games are a massive departure from traditional gaming as in this case developers are the sole entity overseeing the entire gameplay.
Within a blockchain game, NFTs can play the role of in-game currency and can also represent gaming assets. These normally include any characters or avatars, skins, equipment, add-ons, original content and a wide variety of props. Token holders can trade these both inside and outside the game, opening up the opportunity for real-world financial benefits.
The metaverse has played a big role in furthering the use of non-fungible across gaming and other experiences. Users of Sensorium Galaxy, for example, will be able to mint their own avatars and original content, which can then be bought, sold and traded through the platform’s marketplace.
The music industry has seen its fair share of controversies. From artists who claim they don’t get a fair cut of their profits to publishers acting more like cartels than managers, many contentious issues continue surrounding copyrights, royalties and the current model upon which the industry relies.
Music NFTs have become an alternative many musicians are happily embracing. Superstars like Eminem, Steve Aoki, Jay Z, Kings of Leon and The Weeknd have released their own NFTs, but so have independent artists seeking a more democratic and fair way of monetizing their content.
This is why NFTs have been dubbed a game-changer: they open up access to the industry, safeguard ownership rights and allow artists to have direct access to the profits of their work. Moreover, when an artist or band creates an NFT, they can set up the percentage of royalties they’d like to get for every token resale. So every time a song is sold or streamed, musicians get automatically paid without having to go through intermediaries like streaming platforms or money hungry labels.
There is a wide number of dedicated marketplaces such as OpenSea and AirNFT that are aimed at helping musicians create and tokenize their music.
After digital artwork, one of the most popular types of NFT is undoubtedly collectibles. Given the digital scarcity and rarity enabled by blockchain technology, collectible NTFs have naturally become some of the most sought-after. Much of the hype comes from fans rushing to buy sports memorabilia, trading cards and limited-edition NFTs by some of the world’s biggest celebrities.
These types of tokens have become hugely popular in large part thanks to Dapper Labs’ NBA Top Shot, a digital platform dedicated to selling NFT-authenticated collectibles like trading cards and digital packs dubbed “moments”, which include memorable sports moments and video highlights from NBA games. The rarer these “moments” are, the higher the value of the underlying NFT. One of the most expensive NFTs ever sold in the sports category is the LeBron James Dunk Throwdowns (Series), which had a price tag of $380,000.
The issuance of sports NFTs has been seen as an opportunity for athletes, clubs, and sports brands to have a new monetization avenue while it also gives fans a very compelling way of connecting with their favorite clubs and athletes in a new way.
Much like the real-world items they might represent, trading card NFTs and other collectibles have varying degrees of rarity and value. And while sports collectibles are some of the most popular, collectible NFT can be found across many other categories, such as music, memes, digital art, tickets, and more.
Virtual Fashion NFTs
As part of a trend-setting industry, fashion houses wholeheartedly embraced blockchain technology and NFTs, even before they became more widely known.
Gucci has built a permanent town inside Roblox after holding a flash campaign inside the same platform last year that was visited by over 20 million players. Burberry has collaborated with Mythical Games to launch a non-fungible token collection in their flagship title, Blankos Block Party. Dolce & Gabbana has managed to sell a nine-piece NFT collection for $6 million, while a slew of other brands including Nike, Adidas, Prada and Balenciaga have entered the market with significant investments in NFTs and blockchain technology. Suffice to say, NFTs are in. So in - in fact - that virtual clothing has made it to the cover of the world’s most prestigious fashion magazines, including the fashion bible itself - Vogue.
As the metaverse becomes a more tangible platform that users will be interested in using, it has helped fuel the growth of digital-only brands, dedicated to creating virtual clothing (or wearable NFTs) that metaverse participants can style their avatars with.
The Fabricant, Aurboros and RTFKT Studios are just of the names tech-fanatic fashionistas are already likely to know, while fashion-forward users are now flocking an NFT marketplace like DressX for eccentric garments that are impossible to replicate in the physical world. The advantages of creating virtual fashion NFTs are hard to overstate:
Creativity: Without the constraints of the physical world like gravity or fabric durability, designers can take their collections to places never before explored. Be that liquid gold, fire, smoke or water, fashion NFTs can be a unique blank canvas upon which truly original and edgy designs can be created.
Body and gender inclusivity: In the metaverse, users won’t have to worry about not fitting into a pair of jeans or be concerned about following fashion norms. That’s because fashion NFTs can cater to whatever specificities users have, be that the appearance, size, shape or gender of their avatars. Moreover, there are a number of brands dedicated to developing genderless NFT collections.
Accessibility: Sure. Gucci bags, Hermes flats and Dior t-shirts might be considered (by some) the epitome of fashion, but they’re out of range for most of us. Now, the great thing about NFTs is that you can buy the digital version of your top wishlist item for a fraction of the price - and flaunt it in the metaverse. On the other hand, fashion is a notoriously hard industry to break into. With non-fungible tokens, however, aspiring designers get a chance to release their work in their own terms and across virtual platforms with millions of users, as is the case with Roblox and Decentraland.
Ticketing is a multi-billion dollar industry, but it’s one still dogged by flaws that hurt consumers in more ways than one. For starters, there’s a huge black market that not only means higher prices for fans who missed out on the opportunity to purchase tickets through the primary market, but also paves the way for fraud and security risks for event organizers and other official entities.
In addition, it’s generally impossible to track customer data beyond the main ticket supplier. What this means is that if a ticket is resold to someone besides the primary buyer, the event organizer can’t know who the attendee really is.
Lastly, the sale of fake tickets has been on the rise in recent years, leading to not only loss of money but diminished trust in the wider ticketing system.
In a bid to counter many of these issues, NFT tickets are already being tested by many event holders and promoters. Some of the benefits of leveraging blockchain technology in this context include:
Fraud prevention: NFTs establish the uniqueness and authenticity of each ticket, making it easily verifiable by the issuing entity. Even when being out through the secondary market, all transactions are recorded and made publicly available. Bottom like: it’s virtually impossible to duplicate or fake an NFT ticket.
Economic opportunity: Thanks to blockchain, event tickets can be more than a piece of paper or QR code. Using smart contracts to establish the mechanics of tickets, organizers can add features such as royalties and secondary market fees, so that every time a ticket changes hands, the primary entity might get a cut. In addition, an NFT ticket could double as a collectible, for example. This way, fans are able to keep the memory of a memorable event forever - or sell it for a profit to other fans and collectors.
Speed and cost-reduction: A non-fungible token can be easily and quickly created, while the costs associated with minting tokens is significantly lower when compared to the traditional ticketing system.
Industries such as entertainment, events and the metaverse stand to reap the immense benefits of NFT ticketing, distributing added value of tickets across attendees and organizers, all of which results in a better experience all around.
Who doesn’t love a good meme? From funny pictures to short video clips and pop culture moments, there’s a meme for everything. They’re an ubiquitous presence in social media and it might seem impossible that someone could claim ownership over a meme. In many ways, they belong to the people.
However, blockchain technology is making your favorite viral memes a lucrative enterprise as well. Just take ‘Doge’, everyone's beloved Shiba Inu internet dog. That meme sold for an eye-watering $4 million last year.
Other classic memes such as ‘Overly Attached Girlfriend’, ‘Bad Luck Brian’ and ‘Side-Eyeing Chloe’ have also managed to reach impressive price tags, further underscoring the financial potential simple pictures have in the crypto world.
With imagination being the only limit in memeville, we can only expect this to be a particularly lucrative use of non-fungible tokens in the NFT space.
Virtual Real Estate NFTs
Going down Metaverse Avenue, one thing you’re sure to find is plenty of virtual real estate up for grabs. And if you’re assuming - as one would - that snapping up pixels worth of digital real estate is easy on the pocket, the numbers show otherwise. After all, the most expensive plot of virtual land was sold for a staggering $4.3 million, with other virtual properties following closely behind. Real estate prices in some of the biggest metaverse-like platforms saw a surge of as much as 500% last year, in part thanks to big brands like Nike and Gucci investing in their presence in virtual worlds.
For many, having a real estate non-fungible token is a much better use of blockchain technology than many of the other types of NFTs we’ve mentioned so far. It mostly boils down to the usability and profit opportunity the plots of land enable:
Flipping: Token holders can opt to re-sell their property for a higher price than what they originally bought it for, thus pocketing the difference.
Brokering: With virtual real estate attracting so much interest, metaverse users can try their hand at connecting buyers and sellers or simply give out advice, just like a real-life real estate agent.
Renting: One of the most obvious uses of a real estate NFT is to become a metaverse landlord and rent out your virtual spaces to others.
Advertising: Just like in real-life, real estate in the metaverse is also all about location, location, location. As such, plots of land located in areas considered to be high visibility can become extremely valuable, in particular to advertisers.
Event hosting: Whether a music festival or a fashion event, many metaverses are now the go-to place for a number of entertainment events. Users can choose to host these events and experiences, monetizing their non-fungible tokens by selling tickets, renting out spaces, promoting artists, and more.
As the crypto sphere continues evolving, NFT fundraising is emerging as a valuable tool for generating capital and raising funds, in particular for charitable organizations and NGOs. Typically, this process unfolds in two ways:
- Standard sale of NFTs for profit
- Raising money towards a specific cause
In addition, nowadays, people have become interested in donating in the form of NFTs and cryptocurrency. This has many advantages for a charity institution as they can choose to keep the funds and let the investment grow over time (as an endowment) or convert the crypto donation into fiat money.
Not only are wealthy donors choosing to give away virtual tokens for worthy causes, renowned digital artists and NFT creators are also choosing this avenue to do good and raise awareness towards causes they support.
Domain Name NFTs
Non-fungible tokens are centered on the idea of ownership and authenticity of digital assets. On the internet, domain names allow users to find specific websites, connecting people to the information they’re looking for. NFT domains follow the same idea, but allow users to purchase a specific name without having to use a traditional domain register. More advantages include:
No recurring fees: You only pay once when getting your NFT domain and there’s no expiration date or need to renew your registration.
Wallet Address: NFT domains are more than just a website address. They can also double as a cryptocurrency wallet, replacing multiple wallet addresses (in case you have them), with a single memorable name. And since they are also NFTs, you’re free to sell them as ordinary tokens if you choose to do so.
Cryptocurrency storage and Web 3.0 features: A domain name that's been minted on a blockchain can be used to receive and manage cryptocurrencies across different networks, as well as act as a quick way to log into Web 3.0 applications.
On top of all of these benefits, users might also feel tempted to invest in an NFT domain as it can’t be purchased or used by anyone else, unlike traditional domain names that can be easily swooped away if the owner fails to renew their domain registration or is less attentive about it.