10 NFT Use Cases of Klaytn

Author: Klaytn

Non-fungible tokens (NFTs) have seen exponential growth in recent years, becoming the new darling of the cryptocurrency and blockchain industry.

With their potential applications across multiple industries, the future of NFTs is bright. While much attention has been focused on crypto art and digital collectibles so far, the prospects for NFTs do not end there.

In this article, we will take you through innovative NFTs, how they contribute value, their different use cases, and how they go beyond simple art investments or sales for income. Are you new to cryptocurrency, and do some of these crypto terms sound unfamiliar? Check out the glossary at the end of this article for further understanding.

Use Case 1 --- Gaming

Since the introduction of NFTs a few years ago, the gaming industry has witnessed tremendous growth. With the existence of different gaming models, playing games has evolved from Play-to-Win and Pay-to-Win to Own-to-Play and today's Play-to-Earn.

Play-to-Earn platforms typically require players to use cryptocurrency to purchase items to play games and collect unique in-game items. These rare in-game items, such as swords, potions, and shields, reside on the blockchain using NFTs. Items can be sold based on their rarity and functionality within the game.

Examples: Axie Infinity, MIR4, Sorare, Zed.Run, MyCryptoHeroes, GodsUnchained, Splinterlands

Use Case 2 --- Domain Management

Just like traditional domains work, you can access content located at the address [news.yahoo.com] in your browser. NFT-powered domain names exist on public blockchains and provide users with complete ownership of the data they store.

Not sure what this means?

It simply means that with NFT domains, we can:

• Simplify crypto transactions by replacing wallet addresses with domain names
• Use your domain name as your universal web3 username to log into applications
• Easily create and host websites, from personal sites to NFT galleries

Sounds cool, right? Yes! NFTs open up a whole new realm of possibilities.

Examples:
Ethereum Name Service (ENS), Klaytn Name Service (KNS), Unstoppable Domains
So, when you see something like brantley.eth, vitalik.crypto, or pampam.klay, make sure to refer to it as an NFT domain.

Use Case 3 --- Music and Entertainment

Do you think NFTs will have real-life use cases in this industry? Well, let's find out!

Music NFTs allow fans to invest in their favorite artists. Creating and selling music NFTs is as simple as uploading audio files to an NFT marketplace or music NFT platform. NFTs have various uses for artists, record labels, and producers.

Fans can purchase NFTs of their favorite artist's songs. This not only provides funding for the artist to support his/her music but also helps fans gain financial returns in return. When purchasing an NFT of a song and the song's value increases, the artist's fans will receive returns.

In short, NFT platforms provide artists with a more attractive and intuitive way to interact with fans. These platforms offer better monetization opportunities by eliminating intermediaries in traditional music distribution systems.

Examples:
Soundxyz, BeatFoundry, Mintbase, DAORecords

Use Case 4 --- Real Estate

The tokenization of any asset makes it possible for physical/virtual land or property to be represented as NFTs on the blockchain.

The introduction of NFTs is significant for the real estate industry as they can be used to represent:

• Physical real estate: Physical houses in the real world are tokenized, i.e., NFTs are created.
• Virtual real estate: Digital land in virtual worlds, such as Sandbox and Decentraland.

You might wonder how physical houses are tokenized?

As mentioned earlier, NFTs allow us to store unique information about assets on the blockchain. This specific feature can be used to store the location, price, and measurements of physical/virtual houses or properties on the blockchain. The immutability of the blockchain makes it difficult for malicious actors to tamper with land ownership.

• Physical real estate can be tokenized as:
• Whole assets: Tokenization of the entire asset; or

Fractional ownership: Any number of people owning a part of the property.

Considering these factors, we can still explore the possibility of obtaining NFT-backed loans. As long as the real estate NFTs and their underlying assets provide sufficient value, they can be used to support loans.

Use Case 5 --- DeFi NFTs

NFTs in decentralized finance (DeFi) will usher in a new wave of possibilities. For example, a Bored Ape (BAYC) could be valued at $100,000 or more. Once you acquire and verify ownership of your Bored Ape asset, you can borrow against it as collateral.

Here’s what happens under the hood:

• Need liquidity and don’t want to sell your NFT?
• You offer the NFT as collateral to a lender, who in return provides you with the liquidity you need.
• You repay the loan according to the terms of the agreement.
• The lender returns the NFT to you.

Examples of NFT lending platforms:

NFTfi, Arcade, Nexo

Not only are NFT-backed loans possible. Several DeFi platforms offer NFT staking services and financial incentives. For example, the MOBOX crypto gaming platform allows holders to lock their NFTs and earn staking rewards in return.

Use Case 6 --- Fashion and Wearables

From Dolce & Gabbana to Gucci, Louis Vuitton, Adidas, Givenchy, Burberry, and Diesel, luxury brands are at the forefront of entering the digital realm by actively investing time. These brands are exploring ways to introduce NFTs into their various products and marketing campaigns.

So, what are NFTs in the fashion industry? Fashion NFTs can be categorized into:

• Virtual clothing that customers can wear in virtual environments (Decentraland, Sandbox, Roblox)
• Digital content that owners can interact with; or digital twins of physical creations.

The major explosion of NFTs in the fashion industry was due to the cancellation of fashion shows and the closure of stores during the pandemic. Since then, fashion brands have sought ways to connect with customers and create revenue by leveraging the possibilities of the digital world (augmented reality clothing, Metaverse fashion, virtual stores, etc.).

The importance of NFTs in the future of fashion cannot be overstated, especially as the Metaverse expands, providing consumers with new platforms to showcase their digital purchases. Why? Because Gen Z shoppers crave digitization and personalization.

Use Case 7 --- Certifications and Diplomas

Whether in physical schools, boot camps, or virtual universities, blockchain verification of students' participation in training or completion of courses is the next big thing. This constitutes another method of validating academic achievements.

NFTs are also a great way to store information about training, validity, and ownership in a distributed database (blockchain). NFTs can provide proof of attendance, degree certificates, and other important information that will be stored on the blockchain, immutable and hack-proof.

Issuing paper certificates will no longer be an issue. NFTs will serve as records of academic achievements and will be used to prove individuals have participated in courses/training.

A practical example is the University of Nicosia: the first university to issue NFT certificates. You can click this link to view Opensea.

Use Case 8 --- Concerts and Ticketing

The events and ticketing industry cannot be excluded from the possibilities of NFTs. We have witnessed a trend in the industry where tickets have shifted from paper ticketing to digital ticketing—scanning QR codes. Now, with the emergence of NFTs, the industry is expected to take a new form from here. Currently, traditional ticketing systems face challenges such as black market sales, counterfeiting, and fraud. Therefore, NFTs have arrived to help event organizers:

Mint the desired number of NFT tickets on their chosen blockchain platform.
Prevent counterfeit tickets and fraud
Reduce costs
Earn more money
All of these things happen without intermediaries, eliminating unnecessary fees that could lead to unreasonable ticket price increases.
Examples of ticketing platforms: DigiTix, Ticketmaster

Use Case 9 --- Sports NFTs

NFTs have revolutionized the concept of sports memorabilia—memories and noteworthy experiences. Fans can own cards of their favorite players or even game highlights. As a result, sports clubs and teams have established long-term relationships with fans and increased revenue.

Sports NFTs provide fans with new ways to support and interact with their favorite teams. One of the most popular series is NBA Top Shot: a basketball collectibles marketplace. The platform allows fans to trade moments, digital collectibles of NBA and WNBA games and players. For example, a video clip showcasing LeBron James mimicking Kobe Bryant's famous dunk sold for nearly $400,000 at an auction in April 2021.

The application of NFTs in the sports industry is reportedly working overtime, and this trend is likely to continue. This trend could lead to a surge in NFT transactions in the industry, as a report predicts that Sports NFTs could generate over $2 billion in transactions in 2022.

Examples of sports NFT platforms: Sorare, NBA Top Shot

Use Case 10 --- Supply Chain

For supply chains, NFTs enable participants to access the same immutable records on the blockchain, reducing and potentially eliminating discrepancies in information flow between parties. The inherent characteristics of blockchain—transparency and immutability—only enhance the reliability and authenticity of supply chain data.

Thus, NFTs can improve efficiency and reduce costs incurred during the procurement and acquisition of goods and services needed by companies. NFTs can also generate an end-to-end view of parts' locations, quantities, and other useful information.

The uniqueness of each NFT is specifically defined by the information stored in the NFT metadata—pointing to valuable digital assets that are updated in real-time on the blockchain. The transparency of the supply chain enabled by blockchain benefits end consumers, allowing them to know that products are safe, fresh, free from GMOs, and devoid of unwanted additives.

With the inherent characteristics of blockchain—NFTs, organizations have begun using NFTs to track their products throughout the entire supply chain journey from origin to customer.

Conclusion

NFTs have been driving fundamental changes across various industries. This is evident in the increasing real-world use cases and their significance across different sectors. As the world evolves and people's online habits become more prevalent, digital innovation is now receiving increasing attention in many industries.

Similarly, NFTs have expanded beyond the realm of art investment and are now benefiting many industries worldwide.

Klaytn: Metaverse Blockchain for All provides all the solutions needed to build Metaverse use cases, offering the performance, decentralization, scalability, and interoperability required to drive the trust layer of the Metaverse. At Klaytn, we combine:

• Open-source development infrastructure packages: L2 solutions, SDKs, smart contract libraries, wallets, oracles, bridges
• High-performance mainnet: high throughput/TPS, instant finality (~1 second)
• Community co-creation: Launchpad, alliances with global players
• Management and financial support: Treasury Advisory, Klaytn Growth Fund

To provide the best experience for developers and projects.

If you are looking to build your NFT use case, Klaytn is home for all. Learn more about our platform here.

Glossary

• Digital collectibles: Digital collectibles are unique or limited edition copies of virtual items. This can include digital art, video clips, or digital trading cards, etc.
• DeFi: Short for Decentralized Finance. Refers to financial applications built on blockchain technology.
• Metaverse: The new wave of the internet, where a person's 3D digital representation can interact, share, work, and entertain with others and machines.
• Augmented Reality (AR): The real-time integration of digital information with the user's environment.
• Virtual stores: Virtual stores are e-commerce experiences powered by VR and AR technologies.