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Now that the market is in turmoil, NFT market players are expecting more than just a quick comeback. These use cases show what NFT looks like when utility takes precedence over speculation.
The recent market decline has had a significant effect on non-fungible tokens (NFTs). Most NFT price floors have fallen by 75% or more over the past few months. As prices fell, many investors lost confidence and are now wondering if all the NFT craze was just speculation.
This Chainalysis report suggests that 2021’s meteoric rise was caused in part by “wash trading”, which is when someone sells an asset to themselves to make it look like there’s demand. of the market.
But even in this chaotic situation, musicians are finding exciting new ways to use non-fungible tokens. Let’s look at three examples of how NFT could be usefulrevenue rights, digital tickets and VIP access and NFT-based charitable efforts.
Streaming Revenue Sharing
Investors who purchase an artist’s NFT may also obtain rights to the revenue generated from their music. This is the idea that can be achieved by tokenizing revenue rights. Artists receive money immediately to help pay for production and marketing costs, but they still own the rights to their music.
For users, it’s like giving money to artists they think have a chance of succeeding, in the hopes that they can share in their success.
by Alan Walker Unity Campaign, which started in May and raised $25,000 in just a few days, illustrates how this model works in practice. The song is on track to reach its release goal sooner than expected, and it inspired an even bigger second campaign around Walker’s Origins EP.
This crowdfunding model can also include “fan missions”, which reward users with additional airdrops and perks for completing specific tasks.
Since the value of the rights increases as the artist becomes more popular, investors have a reason to expect the artist to succeed.
Tokenized tickets and exclusive membership
Another growing trend is to use NFTs as digital tickets or passes that offer their owners special benefits. A great example of this is how FTX and Coachella worked together to create the Coachella Collectibles series. The series offers unique opportunities such as lifetime passes, meet and greets and more.
The Way Out West (WOW) festival is also working on a similar collaboration to create an exclusive NFT collection of moments captured by festival-goers. Web 3.0 experiences seem to be in high demand at events around the world. So organizers are working to provide more such opportunities to encourage people to keep their digital tickets longer.
Several music groups have also launched NFT collections in order to turn their most dedicated fans into VIPs. Avenged Sevenfold were one of the first bands to tap into this concept, releasing their Deathbats Club NFT collection. The band has granted owners intellectual property rights to their own Deathbats and continues to offer options, such as incorporating three Deathbats in Iron Maiden’s “Legacy of the Beast” mobile game.
Another good example is the HEAD5 collection from deadmau5. Those who previously held official deadmau5 NFTs were offered the opportunity to start creating other fan club NFTs sooner than expected. It shows how blockchain technology allows artists to thank their most loyal fans.
People who have passes to exclusive events or fan clubs are more interested in using them than selling them, making speculation less likely.
Using NFTs to Solve Global Problems
Last but not least, proceeds from NFT sales can be donated to verified charities. Grimes, a Canadian musician and producer, did just that in 2021 when she released the WarNymph collection. The sale of the collection raised over $6 million, and an undisclosed portion of the money went to Carbon180, an NGO working to reduce carbon emissions and fight climate change.
Another notable example is UNICEF, which launched an NFT collection to raise funds for school connectivity.
If investors put their money in tokens for such purposes, they are unlikely to use them to speculate in the future.
The speculation will not end
Changing the way people think about NFTs takes a long time, but projects with real benefits and big effects on the world should definitely try to do it. Slowly but surely industry will move beyond speculation and into the realm of utility.
Mattias Tengblad is an experienced CEO and entrepreneur with over 20 years of unique experience in management, business development and marketing, from telecommunications and games to music and media.
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Feature image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia