NFTs, with their smart contract functionalities, are already a source of revenue for their creators. That happens on the secondary market where they can commission a percentage of all sales. Plus, they have that first sale income. However, can those that buy the NFTs use them to generate revenue? There are some very specific cases right now. For example, gaming. With the inception of blockchain technology, we have more and more games that have a play-to-earn (P2E). So you load your NFT (which usually is an avatar with which you play the game) into the game and earn in-game tokens that can be traded in an exchange. So those tokens are actually worth money. There’s also the possibility of renting an NFT, in which case the clearest use is —once again— related to P2E gaming. Axie Infinity has a “scholarship program” where there NFTs can be rented out to those that can’t afford to buy them, so that they can play the game and earn money. So your Axie Infinity NFT can provide revenue even if you are not yourself playing the game.
With smart contracts, the possibilities are almost as far-ranging as in real life. For example, you could use an NFT as proof that a service is currently underway and that could give you access to customer service. And in return, ownership of that NFT means that payments are made regularly. Once again, thanks to smart contracts. An NFT could act as a gatekeeper to other NFTs. Like an art gallery that unlocks the viewing of NFT art. But it doesn’t have to be used for exclusively the viewing of NFTs. A pay-to-attend event could be one such format of obtaining revenue from the Non Fungible Tokens. The venue, metaverse real-estate, is the the NFT.
Once revenue is constantly obtained through NFTs, then you can adequately establish a value for that investment. Which is great news, because that is one way you can eliminate the speculative nature of crypto and NFT investment and actually start to assign value based on more objective criteria.
As of now, most NFT business efforts seem to be directed at brand engagement. Making sure that the consumer feels part of the brand and part what is being done. While that is absolutely valuable, it is not harnessing the complete potential of smart contracts. Can NFTs be used to power entirely new business models? Many seem to think so.
So, what are the possibilities in the art world?
Well art has been the pioneers of how to use NFT. After all, there was amazing value for them in the blockchain. Previously, the Internet was a place of immense supply of JPEGS, that had no owner. Now, you have scarcity and a way of verifying that an artwork is truly the work of a specific artist. The vast majority of what is sold, is usually art. Now, NFTs can be anything, from the first tweet ever made or an article. But still, that is still within the realm of JPEGs. The truth is that even though JPGs are the majority of NFTs, they are not limited to this type of file or medium. They can be used for music, for example. And audio doesn’t have to be only music. It can be used in the voice-command assistant market. This way, AI can have a more friendly and human interface, and the creators of such voices can get their fair share. Can you imagine an art installation that is fully powered with all of these NFTs capabilities? Music, different types of voices, and combined with the visual component.
Because the NFTs allow for many different types of files (all they have to be is non-fungible, or unique) you can have different types of business models applied to that NFT. An image file could be a ticket to an event, artwork that you can license, or a club membership. It could also be clothing for your metaverse avatar.
Now, just as you could buy clothing for you avatar, you could buy a voice modifier that fits a particular mood. Or perhaps you’d like to sound like Batman from the Christopher Nolan trilogy. An audio NFT could also be an avenue to get an artist some royalties when his or her music is played at an event with a large crowd. Just like licensing a visual artwork. Fashion, music, voiceovers, branding, and visual arts. All of them disrupted by blockchain.
The way for an art gallery
An art gallery can be a place for like-minded people to gather, and enjoy and discuss art. Thinking of the metaverse, an art gallery is place where events take place. Of course, you’d expect that those events are art-related. And mostly, visual arts. But that is open to including some sort of music, showcase fashion or furniture. On occasion, one could have events that are not related to arts.
For the family-owned art gallery SOPRG, this means that the possibilities that were available to bigger art galleries are now there for them as well. And also, at a much larger scale because now there are no physical, with a metaverse parcel at Somnium Space. For up-and-coming artists, they can harness the potential of being able to be seen in a sector that is filled with enthusiasts and dreamers, who are willing to invest in a new technology. Those who are curious of its potential. After all, blockchain and Web3 is full of people that are willing to try new stuff.
Artists and tech savvy people are always looking new things to try.