NEST Roundtable 13: What are the new NFT use cases, beyond music and art?
Woody at NEST Protocol
Wacky: Head Of Business Development at X2Y2
Solo: Head of Growth at SpaceID
Pedro Dandrea: CEO of Mouse Haunt
Clint Arthur: Co-Founder of OFM
Dorothy: Head of Growth at AltLayer
Ling: BD Manager at FB Master
Shreyas: BD Manager at OKXNFT
Doruk: Project Manager at LiveArt
What do you think of the current use cases of NFT, does it really solve the problem？
Wacky: I think NFTs are bringing additional value to some of the old web 2 issues that we had. Some of the recent ones for example have been with events and ticketing to go to a concert or to go to a sports event in the form of NFT, and then as an NFT holder, you could use that ticket as a collectible. For example, the people that went to a concert and still have those physical tickets those tickets that are real collectibles of the time, and effectively, now with NFT, this is something that could be replicated except you wouldn’t have to worry about keeping the physical item, you would have the item in a digital form. There are other ones like fashion and wearables, DEFI, and social platforms. I personally think NFTs are really the next revolution when it comes to how we are going to interact between ourselves and with particular brands and particular companies going forward.
Woody: In this world cup, I do believe a lot of NFT project teams have generated many of these kinds of tickets. Also, there are still many real-life things that can do by NFTs.
Solo: From the eyes of third parties, and non-crypto natives, the word NFT is hard to detach. Their initial reflex will be always a Ponzi, it’s a scam. because the image portrayed from the outside view is that people are ready to put thousands of dollars into these monkey pictures. The vast majority of NFTs are there out there, but it catches popularity because, under it, there’s true tech that solves use cases, like authenticating, giving loyalties, etc.
Clint: There’s a bit of debate between whether it’s 100 super fans or 1000, I think at the end of the day it’s all about rewarding the community and engaging that community, and through NFTs, creating that engagement and ownership. I think the use cases that are transferable outside of the music industry into the real estate itself have probably been one of the ones that we’ve been watching across the globe.
Dorothy: In the current crypto space, the main utility for NFT is still basically social identity and getting a quick return out of the investment. Many NFT projects are trying to identify themselves as fashion brands and lifestyle brands. I spoke with the project yesterday called Genki and they were calling for a healthy lifestyle and healthy diet. So we definitely see a lot of different types of social identities emerging from all these different communities and I still believe that is one of the biggest use cases of NFTs. Beyond that, DID, digital tickets, digital asset certificates, and in-game assets, etc. Especially for DID, many projects are trying to identify who you are in the digital world, and by using blockchain technology, we can identify your online road map, track your footprint and understand your behaviors as digital citizens and nomads.
Shreyas: NFTs have a lot of usefulness outside of just part of music, and the way I see it the number one job for an NFT is proving ownership, around real estate and certifications and licenses, not even mention the loyalties. The problem is that there are so many disconnected ownership documents, and with NFTs in blockchain, we can bring everything under one roof and have a system that is interoperable globally without the need for any intermediary party.
Doruk: NFTs are solving so many global challenges, and basically, they create the bridge between the crypto world and the physical world for literally everything. It helps with ownership but is also linked with distribution because you have the airdrops, you can distribute anything in any way you want, and also have the compensation. I cannot wait to see more fashion brands adapting to the metaverse.
What are the new NFT use cases, beyond art and music?
Solo: I’ll pitch here the use case for digital identities because imagine if you could trade your Twitter username, but even beyond that, because the wallet domain name is in fact your username for the whole chain it sits on right. Another amazing use case is being recognized as you everywhere you go online like it lets you keep your brand across applications.
Woody: As I see, a lot of projects are making money based on this domain NFTs, which makes a lot of investors actually lose money on it. Do you still think domain NFTs are still a good investment for normal users?
Solo: When it launches, there’s always a wave of speculation, because there are only limited amounts of good domain names that can be acquired, and there’s only one of each. But in the end, you’re not supposed to buy a domain name because you want to resell it at a higher price. It’s meaningful to you if it represents who you are. It will make sense that now secure a name that speaks to you.
Wacky: There is already so much money that has been put into the ecosystem. One of the things that is really developing at the moment is everything related to DEFI, like Board Apes. What has been emerging recently is that you may have loans that are being issued against those NFT since the value of those NFTs are more stable to a certain extent, then you have lots of applications that are coming on top of this, such as again loans potentially. Overall, the NFT market is actually quite healthy to a certain extent.
Which business model is the most successful one?
Woody: I personally do not like BAYC model, because above 90% of their money was used for marketing, eventually they do not gain money from the project itself.
Doruk: I think any of the business models would succeed in this current market. I think what matters right now is the level of transparency because what we see is that every day there are thousands of hundreds of projects that are coming alive. There are too many projects coming up and then everyone is claiming to be the best one. So the effort that you put in to show what you are doing is important.
Solo: It should be used to fund specific operations, there should be a very well-thought-out business plan out there before you release your collection. Mint users should be able to know exactly how much of each portion of the funds, not just “we’ll figure it out after”. On the other hand, if you do want to go through the long-term plan, then you can start trying to spin off some secondary collections, but this is why you start to take away a little bit of value from your original NFT. It must be done in a way where your collection will survive in the long term.
Wacky: The best business model is a business model that people will understand first and foremost. But in art, the NFTs basically have no model. They don’t offer any road map or other things. This is quite contradictory to some of the other projects.
Woody: If there is an artist making his physical artwork into NFT. Where is the value of this NFT come from, since the physical one still exists?
Wacky: It really based on what the rest of the world believes.
Shreyas: I think the two should not be necessarily separated, I’ve seen a lot of like people creating physical things and NFT being part of that physical sale that they’re making or the other way around where people are selling an NFT. You get a physical thing with it, I feel like it could add a lot more value if all things are connected.
Dorothy: I do want to bring up the example of Azuki. Rich people could use physical things to show off.
Woody: I think there is only a small part of people who want to show off based on it, but most of them are just investments.
Pedro Dandrea: Bring it to the game board, we usually segment people between like four types: the killer, the achiever, the socializer, and the explorer. The achievers want to have every little collectible to get huge happiness and get personal accomplishment, which is a behavior we see in the NFT market.
In terms of the model that is successful. The NFTs solve so many problems in the traditional world like real estate, so it would be the cross between the real world and the virtual world. Many projects are tokenizing real estate, and the value is that you can have a real estate exchange made of tokens and NFTs with regulation, which would be a revolution. In the virtual world, we’re always talking about building scarcity and having unique things, and in the real world, land is scarce.
Woody: Someone said there’s a huge gap between on-chain and off-chain, and still need a centralized institution to help, which is a conflict between the blockchain and NFTs.
Pedro Dandrea: You can still build a centralized institution using the blockchain. For example, in Canada, the government has been investing in blockchain systems for several years, and they do want to change a lot of their government processes using blockchain for its public transparency and validating ledger. There are a lot of challenges for sure.
Clint: A really successful model is one perfectly aligned with incentives for everyone that’s involved. The thing that stands out to me is to allow the free market to thrive as much as possible whilst maintaining the safety of everyone involved.
Woody: I met many GameFi platforms based on NFT value or play-to-earn. What do you think of this?
Pedro Dandrea: Then impressiveness is the key. Like our project is building some tech to allow artists to perform in real-time with other performances across the world from a remote location. The latency is the biggest issue.
Solo: I think one model that spreads a lot without people realizing it is the loyalty programs. For example, Gucci brand is spreading because people show up their Gucci bags. Online, people could still show off their Gucci items by moving their loyalty program online. You should be getting these NFT badges that represent your loyalty level, and people will want to show off that.
Pedro Dandrea: Agree. Also, if you are a member. You could have cash back or a discount with the NFTs.
Woody: HistoryDAO is also writing down the history using NFTs, which is quite interesting.
Dorothy: A lot of luxury brands want to penetrate the younger generations and the digital market because that’s where the growth is. And also, the current flow is very localized and very segregated. By offering NFTs in their loyalty program, they can easily access their global young customers.
How in the future, the use of NFT could solve real-world problems?
Dorothy: You could have an open database organized and stored on the blockchain. They could also cross-check others’ brand behavior across different segments, thus understanding the younger generations. But of course, I don’t feel like any of these brands have figured out how to do things exactly yet. I’m advising the project who could help in exploring some of the other brands too.
Clint: For ESG, the koala NFT was brought about six months ago. With their model, a proportion of NFT purchases went to a koala sanctuary. So, it had a social impact and environmental impact. This is a beautiful concept and image.
Woody: With World Cup now, a lot of NFTs are coming out with football players’ IPs. Do you have any suggestions for the audience on trading those NFTs?
Solo: Yes. Make sure the project is good because now it’s so easy to release an NFT. Also, buy the NFT for the community, not for speculation. Don’t scratch your head too hard because if it was truly undervalued, then all the other smart investors would buy this floor, and then it would not be at this price anymore. So, the displayed price here is either you are the first smart investor in the world, or this is the actual correct value of the NFT considering all the market conditions.
Doruk: I have the same idea as Solo, so just take care of the big traps set by smart people.
Dorothy: Actually, a lot of the blue-chip projects started off in a bear market. The floor price was pretty low for a very long period of time, so I would say the bear market is a good time to pick up a good project that you think is undervalued. But of course, the bear market may last for a long time, like 5 years. So, you need to understand what your risk appetite is and make sure you don’t over-invest into things you couldn’t bear.
@pandasome asked LiveArt: Regarding the recent incident of LiveArtX official wallet being compromised. What lead to that incident, anywhere the team failed to see it coming and any ideas on how to not let that happen, any mechanisms which can at least show that something wrong gonna happen next, and to sit tight.
Doruk: After that incident happened, we had so many advisors jumping in to support us with the new security measurements being installed. So, we are safe right now. You could join our discord to find more details.
@VaniSrinivasan asked Space ID: What makes an NFT collection and/or project “good” or “worth investing in”? Is it the quality of the art? Or maybe the knowledge that the artist will make more in the future? Or something else?
Solo: Good art it definitely can help like spread it. But it should not just be about the art unless it’s really what the project states it is about. Now the AI could generate collections. So just check the membership, and the roadmap to know how the team will spend the money, and their background.
@raochi asked Mouse Haunt: How did Mouse Haunt gain so much attention in such a short period of time? What was the success story behind it that motivates us?
Pedro Dandrea: We come to this industry as game developers. That attracts a lot of people, we help in development. I have my own experience in gaming, so we are a team that comes from the game development team, and we know how to make video games, which is better than other projects that just know how to develop game tokens. Also, the mouse haunt game is attractive and innovative.
@olamii3035 asked OFM: Beyond celebrating musicians, what are other current benefits of minting and use cases of holding your NFTs?
Clint: We’re actually releasing our ocean floor music marketplace tomorrow at a digital art gallery. We’re seeing a lot of artists release exciting perks for their fans along with the music NFTs. There’s just so much utility and value in the NFT, like unlockable collectibles with high-resolution digital prints, free physical painting attached NFTs, etc.
@AnkurAiran asked Altlayer: Can you talk about the benefits of minting NFT with Altlayer and does it support multichain or just Ethereum?
Dorothy: We are using this NFT drop that’s scheduled on December 9th to showcase our fresh layer technology. Once the 1200 NFTs complete the mint, the users do not have to do anything more, we will use the program to automatically send the NFT, and the remaining tokens they couldn’t spend back to their Ethereum wallet. Essentially this is a solution that helps users mint NFTs with no gas fee. There’s no segregation of liquidity, users can mint in the cheapest and easiest way, or trade the NFT. We of course multi-chain, and besides Ethereum, chains like Cosmos and Solana, and Aptos are also supported.