Three tools that will put an end to NFT speculation

By Mattias Tengblad, CEO and founder of Corite, a blockchain-based crowdfunding platform

Investors seek reliability as the NFT market remains volatile. These use cases show how you can design an NFT that offers more than just a quick return.

The recent market collapse has affected all aspects of cryptocurrency, and non-fungible tokens are no exception. The floor price of most NFT collections has fallen by almost 80% in recent months. Many investors are confused. What if all the hype surrounding NFT was just a fad based on pure speculation? What is worse is that several industry reports say that the laundry trade was a big reason why the NFT sector grew so fast the year before.

Still, musicians are coming up with new and interesting ways to use non-fungible tokens. Let’s look at three of these: revenue sharing, digital tickets and VIP access, and charitable NFTs.

Revenue sharing

When an investor buys an artist’s NFT, they can also get rights to the revenue generated from their music. This is the concept that can be implemented by tokenizing income rights. This business model is of great benefit to independent artists. They can receive money in advance to cover production and marketing expenses while retaining ownership of their work. Users contribute money to musicians they believe have a chance to succeed, hoping to take part in their success.

Announced in May, Alan Walker’s “Unity” campaign was a breakthrough in the music industry, raising $ 25,000 in just a few days. Walker’s song is predicted to reach its stated streaming goal years earlier than expected. The success led to the start of a second, even bigger campaign for DJs’ latest Origins EP. To expand this crowdfunding model, musicians can use “fan missions”. The idea is that users should be able to be rewarded for completing various tasks. For example, they can share songs on social media or fund multiple campaigns by the same artist.

To sum up, sharing income rights will give investors a reason to keep the assets and wait because the value of the rights will increase as the artist’s popularity grows.

Fan clubs and tokenized tickets

Using NFTs as digital tickets or passports that give users their special privileges is another idea that is gaining momentum. The partnership between FTX and Coachella, which led to the production of the Coachella Collectibles collection, is a remarkable illustration of this. The Swedish Way Out West (WOW) festival is also working on its NFT collection, which will include captured moments from festival participants.

A number of musical groups have used NFT collections to give fans VIP access. Avenged Sevenfold was one of the first bands to implement this concept, releasing their Deathbats Club NFT collection. The band has also given owners IP rights to their own Deathbats and continues to offer opportunities, such as incorporating three Deathbats into Iron Maiden’s mobile game “Legacy of the Beast”. Another unique example is deadmau5’s HEAD5 collection. Those who have already purchased official deadmau5 NFTs were given the opportunity to start making more fan club NFTs in advance. The blockchain makes it possible for artists to thank their most loyal fans.

So when people buy tickets to exclusive events or join fan clubs, they are more likely to be interested in the benefits of digital passports than to sell them.

Tokens for charity

Finally, NFTs can be used for charitable purposes. Grimes, a Canadian singer-songwriter, released the WarNymph Collection in 2021 to fight climate change. Part of the money from the first sale, which raised more than $ 6 million, was donated to Carbon180, a non-profit organization that works to reduce carbon emissions and combat climate change. This trend is not limited to the music industry, as comparable charitable projects can be seen in a number of industries. UNICEF started a NFT fundraiser last year to collect donations for school connection.

According to this logic, if investors invest in tokens to reduce carbon emissions, it is unlikely that they will use them to gamble, as transactions also cause pollution.

The age of speculation is coming to an end

Changing how people think about NFTs is a long-term process. Over time, NFTs will no longer be seen as “overpriced JPGs”. The fact that these three use cases exist shows that the NFT industry is slowly moving from speculation to the area of ​​utility.