Welcome ‘Phygital’! The Rise of Utility NFTs

Utility NFTs: Over the years, the rapid rise of non-fungible tokens (NFT) and the metaverse has resulted in new sorts of projects and use cases.

The utility NFT, a sort of NFT meant to offer holders additional value beyond the actual digital asset, is one growing use case in this field. Let’s have a look at this emerging sector.

What are Utility NFTs?

Utility NFTs are a class of NFTs that have particular practical uses. They, like any other NFT, are created with smart contracts and are one-of-a-kind. They also have the same immutability, transparency, and security features.

But unlike ordinary NFTs, the primary focus of utility NFTs is not collectibility but rather the real-world uses, benefits, or perks they provide NFT holders.

Utility NFTs enable those seeking to interact with brands and participate in the project’s culture through access and things. For example, you can buy a Shoe NFT (by Adidas, Nike or any other company) for your Avatar in the Metaverse, and the company ships you a physical pairs of same shoes. Now, you have same thing in physical and digital world.

This increasingly popular combination of the physical and digital worlds has earned its own term: phygital.

Simply put, the phygital term refers to the fact that the project exists not just in the digital or physical worlds, but also bridges the two, linking them in some way.

Use Case Example

Funko Teams and Warner Brothers announced a partnership for DC comics-based NFTs on WAX in September 2022. DC fans were offered the option to participate in an NFT drop for the digital edition of DC’s “The Brave and the Bold” comic through the collaboration.

To better connect the digital and physical experiences, the companies also announced the availability of a physical edition of the comic book through Walmart. You would gain access to the other by purchasing either the digital or physical copy.

Also Read: NFT IP: Who Owns the Intellectual Property of Non-Fungible Tokens?