The next version of NFTs is what tokens were meant to be
NFT 2.0: Early NFTs showed us that provable property is even more valuable than we thought. But that’s what NFT 2.0 will be it’s exciting, says Victor Zhang, CEO of Smart Token Labs.
The speculative wave of NFTs has surely reached its peak. We are ready for the underlying technology to unlock a new wave of innovation. This will be based on adopting the mainstream brand and new types of customer relationships.
This time last year, a buyer could have landed a Bored Ape Yacht Club for around $300. Today, even the cheapest primates will cost at least $90,000. Conversely, projects like Cool Cats have seen their value halved in the past two months, dropping from an all-time high of 16 ETH to less than 5 ETH.
The best NFT collections are brands. Don’t get me wrong, BAYC or WoW membership says something about you and means something to you. Using your NFT as your profile picture or as your vehicle license plate is a very public form of brand association.
In the next wave – NFT 2.0 – we will see exciting innovations from the best NFT collections. They will extend to metaverses, games, and real-world partnerships with mainstream brands.
But perhaps more interestingly, we’ll see mainstream brands entering the fray with a purpose. It will take us beyond the disappointing promise of “usefulness” to a new level of sophistication in the adoption of NFT technology. Its heart is to bring people closer to the brands they love.
The utility hunt
To date, utility tends to include anything from merchandise to the promise of future airdrops. Or access to an upcoming game where NFTs can be used to earn income.
Either way, usefulness most often tends to be confused with empty promises that are unlikely to ever materialize. For NFTs to deliver their perceived value, it is crucial that collectors are granted utility beyond ownership of the asset.
Nifty Tailor is one such platform that has revamped the NFT utility to generate continued value for collectors. While owners of the Bored Ape (BAYC) and Mutant Ape Yacht Clubs (MAYC) are surely thrilled to be in such an exclusive company, the usefulness of ape ownership doesn’t have to end there. Nifty Tailor has launched the first-ever collection of on-chain verifiable derivatives, allowing BAYC and MAYC holders to create derivative monkeys dressed in different outfits chosen by the original holder.
The holder receives royalties on sales of derivatives on the secondary market. Not only does Nifty Tailor provide collectors and designers with a secondary economy, it also allows major brands to enter the world of NFTs without having to launch their own collections.
Perhaps the value of a Cool Cat or a pixelated stoner isn’t obvious to the traditional Web2 consumer. However, as more and more brands like Nike, Adidas and Asics make concerted efforts on NFT, it is clear that they are recognizing the value of digital assets. That said, for NFTs to provide meaningful utility to Web2 or Web3 audiences, brands need to rethink the tokens and how they present value to users.
NFT 2.0: reinventing tokens
Looking beyond static images is crucial to truly extract value from NFTs. Although the recent Cambrian explosion in NFT space is only a year old, a variety of future NFT use cases have begun to emerge. From healthcare and passports to real estate and art verification, the endless possibilities of NFTs are emerging. But for NFTs to truly emerge and realize their potential, it’s imperative that builders reinvent what these tokens represent. This is how they can provide a utility that interests their users. And for NFTs to be truly useful, there must be immediate and real application. Especially when it comes to Web2 audience – clear and tangible benefits far outweigh future roadmaps.
Smart Token Labs claims that tokens will be the foundation on which the future of Web3 is built and that they can act as a bridge between worlds. To this end, the team has established a wide range of partnerships to help Web2 brands integrate NFTs into their digital strategies.
A clear example of this can be seen in event ticketing. Smart Token Labs has worked alongside several high-profile events including the FIFA Cup, UEFA Cup, and Ethereum Foundation DevCon. This involves providing viewers with derivative NFTs based on attestations, which they have used as entry tickets.
Additionally, event websites would recognize the NFTs held in their wallets and give them access to particular parts of the event based on the NFTs held. This would simplify the ticketing process for attendees. They would not need to carry a physical ticket. And, they can carry their assets with them.
NFTs as a Web3 gateway
The overwhelming sentiment among blockchain enthusiasts is that for Web3 to succeed, Web2 must crumble. While conventional wisdom may contribute to this notion, the reality is that Web3 will have more success working closely with Web2.
How, then, will Web2 seamlessly interact with Web3? Perhaps surprisingly, the answer is NFTs. While NFTs are admittedly limited in their use cases at the moment, the potential of NFTs should not be underestimated. Beyond the digitized animals, these tokens represent something much bigger: a verifiable property. Focusing on ownership allows us to foresee a wider range of potential use cases – from provable identification to something as simple as a vehicle title.
Although many Web2 members remain skeptical of the NFT movement, once Web3 consistently demonstrates its value to those in Web2, NFTs will become a gateway through which users will be welcomed into Web3.
Carla Chan’s recent partnership with La Prairie is indicative of how NFTs present the Web3 ramp for major Web2 brands. As two of the biggest names in their respective spaces, Chan and La Prairie have collaborated to unveil an NFT campaign that both offers unique NFT to collectors and drives social good in the real world. Each NFT features 31 of the world’s most populated cities and is tied to current weather conditions, providing holders with ever-changing NFT artwork. Most importantly, with the proceeds from the sale of the artwork going towards the protection of glaciers in Switzerland, this initiative has proven that NFTs can and should have a positive and tangible impact.
NFT 2.0 Towards the future
The NFT space has yet to realize its immense potential. Of course, the emergence of new projects, huge sales, and incredible community engagement are all exciting and worth celebrating. Even more exciting, however, is what NFTs will be be. This current iteration of NFTs has shown us that provable property is even more valuable than we thought. The next iteration of NFTs, or NFT 2.0, will highlight the fact that tokens can revolutionize how we approach all verticals of life – from marketing to healthcare and everything in between. As major brands continue to enter the space, it is crucial that they are thoroughly introduced to Web3 so that they can understand the impact of their NFT initiatives and how to dream bigger when thinking about tokens.
About the Author
Victor Zhang is the CEO of Smart Token Labswhich creates a new standard for a tokenized future with TokenScript, the smart token interface for composable smart tokens on NFTs, PlayFi, DeFi and the entire Web3 spectrum.
Got something to say about NFT 2.0 or something else? Write to us or join the discussion on our Telegram channel. You can also find us on Tik Tok, Facebook or Twitter.
All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.