NFT Utility 🪃

Short, practical drops on culture and technology. 🚀

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To the community 🙏

Happy Monday! ☀️

We're starting this week thinking about NFT utility. I had a fun conversation on the weekend with my friends about what NFTs actually do in the world. Mixed answer! Sometimes it's nothing (maybe most of the time right now?). With the right community, it's something (and that something is fascinating).

Let's get into it. 🚀

Tweet of the Day (TOD)! 🐦

Packy tends to be good at thinking.

NFT Refresher 🌍

Wait, what are NFTs?

NFTs are digital assets whose ownership is tracked on a blockchain. They're called Non-Fungible Tokens. If you break down the term it become clear. Non-Fungible means that it's a unique asset. It's 1-of-1. Token simply means it represents something. It does something in the world.

We did a deeper dive earlier in the life of this letter. Check it out! 

NFT Utility 🤝

What NFTs actually do is a hot topic. For the right reasons. Because sometimes the answer is, it does nothing. Those on the outskirts of the Web3 movement find it borderline insane that the floor price of a Bored Ape is 100ETH, or that you can use an NFT as collateral for a dollar loan. At times, I think it's insane too.

But there is cause to dig deeper. If the precious art market, for example, can be as valuable as it is, I see no reason why the digital version can't simply be a modern evolution of that.

As far as I can tell, the current utility (or value) of an NFT is a variation of one of the following.👇

PS: I ordered them based on what I find the most interesting.

IT'S ART!

The first use case is simple. The NFT you're after is art that means something to you. This is no different than the traditional art market, except what NFTs solved for is digitizing the chain of custody and making transactions simple.

In this category I think of humans like Reuben Wu and Pete Halvorsen.

RARITY

The second use case is that it's rare. It's limited edition. It's a collectors item. Rare work x rare talent = high demand. 

I think of someone like Robert Greene doing a limited edition run for his audience.

AN UNLOCK

This by far is the most compelling utility category for me. NFTs are being used as an unlock for a nearly unlimited number of different things. It can be your ticket in to a closed community of like-minded people. It could, in theory, be a one-use token for a rental of some kind. It could be to raise money for the cause you care about most, or it could be your ticket to events IRL.

When I think of NFT unlocks, I think we're all going to be looking at Coinbase x the NBA. The retained revenue on secondary sales of tickets alone makes this a compelling use case. I'm so curious how they'll leverage Non-Fungible Tokens.

Thanks for reading. I hope you start building today. 🚀

Gratitude 🙏

I feel lucky to have you on the other end of this newsletter. If you haven't yet, join the community, and a bring a friend! Have a great week.👇

See you on the path.

- MG