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How NFTs will become more sophisticated

1 June 2022, 07:32


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    Companies, institutions, artists or even sports clubs, more and more of them are imagining the NFT as a utilitarian object, passport or access key, well beyond the sole use of collection popularized for a little over a year. 


    Drawings of monkeys (the Bored Apes), the line of the first tweet ever posted or the animation of a naked Donald Trump in the grass, here are some of the NFTs that have each sold for millions of dollars since the beginning 2021, under the eyes of a general public that is both fascinated and circumspect. Non-fungible tokens, unique and tamper-proof digital objects, have opened up a new collection market into which tens of billions of dollars have flowed.


    However, “NFTs are very rudimentary at the moment”, explains Sandy Khaund, founder of the start-up Credenza. For him, beyond the world of art, “they don't have many functions, usefulness”. “Most of them are monkeys or stuff like that that is useless,” abounds Juan Otero, general manager of the online travel site Travala, in reference to the famous Bored Apes. Starbucks, which will soon launch its own NFTs, sees it more as a “programmable asset, which can also be a pass”.

    Owning a non-fungible token in the colors of the coffee giant will open access to “unique advantages”, as well as a “community”, a new vision of a loyalty program based on the blockchain. This technology, on which cryptocurrencies and NFT are based, makes it possible to use the same module for different applications.

    On the institutional side, last July, the small Republic of San Marino, in the heart of Italy, launched a vaccine passport against the coronavirus, behind which was hiding an NFT. While the European digital Covid certificate was designed for the European Union, this passport was intended to be verified everywhere, without requiring a dedicated mobile app.


    A “guaranteed madness thanks to rarity”

    Credenza, for its part, is in discussion with sports teams and leagues to put in place a vision of the NFT in the Swiss army knife version, adapted to new uses. NFTs and the blockchain are “accessible in multiple universes, whether you want to go see an NBA game in the hall or a concert in the metaverse”, illustrates Sandy Khaund, in reference to this digital universe where one can lead a virtual existence, like in Roblox or Minecraft video games.


    “If you're a brand, explains Jenn McMillen, think about the most desirable experiences, the most exclusive access, or something that is certain to go viral, and wrap that in an all-access NFT. It will be guaranteed madness thanks to the rarity.”

    Among the most successful examples is the tourist booking platform Travala, which claims more than 300,000 monthly active users. In January, the site, which already accepted cryptocurrency payments, launched the Travel Tiger loyalty program. In appearance, each of the 1,000 NFTs distributed to platform customers is a digital drawing of a tiger, reminiscent of the Bored Apes. But it is associated with a series of privileges, from entry to exclusive events, in the real world and the metaverse, to discounts or loyalty points.

    With the Travel Tigers, Travala's ambition is not to generate revenue, but to create loyalty. “It is a question of retaining these users, that they continue to use the platform”, admits Juan Otero. Despite the attention they generate, “it will probably take two or three years before NFTs reach the general public and traditional businesses,” concedes the co-founder of Travala. But “when the next wave will arrive”, he announces, together with that of the metaverse and Web3 (new decentralized version of the Internet), “I think it will be unprecedented”.


    Future prospects - NFT Use Case: Merging of real and digital

    It is also possible to tokenize real-world assets such as real estate and stocks, or documents such as licenses, medical histories, birth and death certificates. One of the main benefits of this approach is efficiency. Converting a physical asset into a digital asset simplifies processes and eliminates middlemen. NFTs allow sellers and buyers to connect directly to each other on dedicated online marketplaces, choose the best deal terms, and use self-executing smart contracts to implement them. However, developments in this category are still at an early stage, as new blockchain regulations are needed and the use cases are relatively rare.

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