There’s no question that NFTs have become synonymous with hype — and with the booms and busts that are so inherently tied to the crypto sphere. Yet, NFTs are gaining new ground beyond the realm of NFT profile picture (PFP) projects alone: the technology behind digital collectibles gives creators more options than ever to engage with their community.
Novel Revenue Streams
NFTs may also help them create novel streams of income that were not feasible prior to the invention of blockchain.
Now, this new medium offers an unexplored form of digital rights management, allowing artists to secure their digital legacies while providing an elegant way for them to monetize and earn income from their art in perpetuity.
That’s why the next wave of NFT development will marry the physical and digital by tying NFTs to real-world places, expanding the tools at creatives’ disposal for generating revenue, and connecting artists to markets that they might otherwise never have access to.
There’s little doubt that builders and creators will work to create new links between physical and digital items and spaces. “Phygital” is one of the most common neologisms used to describe this phenomena, and it’s a word that’s gaining more popularity across our vernacular each day.
NFTs can be tied to real-world places, offering artists the opportunity to link their work to specific locales. And in fact they have been tied to physical objects, such as Unisock’s experiment that linked NFTs to wearable socks and Azuki’s partnership with Ambush, an emerging streetwear brand. This partnership allowed Azuki, one of Ethereum’s blue chip PFP projects, to use a chip stitched into the hoodie to create an NFT linked to the physical item that verifies ownership and authenticates its value.
Now, similar things can be done with physical places: artists can use NFTs to link digital works of art to the physical places that they come from. By capturing the artistic sensibility and culture of a particular city or region, local artists and entrepreneurs will gain more opportunities for income generation and business expansion.
Moreover, NFTs have the ability to solve some of the most insidious issues that artists face — namely, those that arise in relation to digital rights management and royalties. Today, many traditional artists sell their work that might later gain major value on the secondary market.
When this happens, the artist herself does not see benefits from these secondary sales. NFTs can solve this problem by ensuring that artists see royalties from secondary sales.
These royalties are enforced through blockchain technology: smart contracts make sure that a portion of secondary sales are delivered to the original artist or project owner in perpetuity – something that allows artists to employ NFTs as tools for new sources of revenue.
On top of this, NFTs can also help artists establish improved digital rights management. Proof of ownership – especially when it comes to digital content – can be challenging to protect.
However, because NFTs are created on the blockchain, they can be used to trace the art back to its original creator and protect the creator’s rights to his or her work. Plus, by empowering creators through proof of ownership, NFTs also allow artists to secure their digital legacies and protect their rights to their work for generations to come.
NFTs Reach and Market Share
Tying NFTs to physical places also imbues NFTs with newfound meaning: the ability to merge the physical with the digital can help artists directly link their work with where they come from and offer a new way to celebrate their identities and cultures.
For example, artists can create NFTs that might only be able to be bought by a patron who visits a specific historical site or culturally significant locale in person. And because blockchain technology functions as a distributed ledger, NFTs can also be used to preserve information tied to one’s lineage and cultural history.
These NFTs would offer patrons an emblematic memory of their travels and give them the opportunity to share their experiences with others in new and interesting ways. They can also protect and preserve sensitive historical data in a way that’s immutable and secure.
Additionally, NFTs can help artists strengthen the bonds they share with their patrons and their communities: digital wallets and on-chain transactions make it easy for creators to give special NFTs to their repeat buyers, allowing them to create rewards for early support and continued loyalty.
These use cases for NFTs will inevitably create new markets for digital collectibles and help artists reach patrons that they might otherwise not have access to.
By tying NFTs to physical places, artists can not only propel the phygital narrative forward, they can also expand their reach on the cultural landscape and instill their work with newfound place and meaning.
As a result, they can generate more opportunities for reach and revenue and make deeper connections with their supporters.
Lindsey Roussel is part of the founding team of NieuxCo, a Web3 venture studio and Managing Director of The Nieux Society.