The Utility NFT Classification Guide
What is an NFT
A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain. Non Fungible means that it’s unique and can’t be replaced with something else.
NFT’s can be anything digital including photos, videos, and music. But there has been a lot of excitement around using the technology to sell digital art and build personal brands.
What are Utility NFTs
Utility NFTs have outlined intrinsic value based on the access, perks, rights, and opportunities they bring to the holder.
When an investor, collector, or user buys an NFT, they are automatically entered into an exclusive and limited community of holders.
This can be leveraged and unlock exclusive experiences, access, and rewards only available to the NFT holder. Since we are in the early stages of NFTs, the possibilities are limitless for NFT creators with creativity, vision, and strategic mindsets.
Let’s look at all types of utilities and where they can potentially go for NFTs.
Types of Utility
DAO
A Decentralized Autonomous Organization (DAO) is an organization run by a group of people with no structure who establish their own rules and make decisions through a smart contract.
They are not controlled by a single central authority which is great for NFT communities. This gives power to NFT holders to make a decision on where the project will go.
This also adds a level of transparency to organizations as they can influence decisions in the organization by creating and voting for proposals. To participate, typically you need a governance token; the more tokens a person has, the higher their voting power.
Staking
NFT Staking or farming involves locking an asset on a blockchain protocol to yield interest. This supports the security and operations of the blockchain network, potentially creating a form of passive income for the holders.
This is done through the Proof of Stake (PoS) mechanism which blockchains use to validate transactions. When the owner puts their NFT or token as collateral, the blockchain will reward them for the validation of blocks.
This is why you need to pay gas fees for any ETH transactions. Instead of NFT’s and tokens, these are ETH miners that are validating the blocks.
When you stake an NFT, the staking platform will determine the worth of your asset and establish an annual percentage rate (APR) that you will earn. This will depend on the rarity level of your NFT and the ability of the community to generate a continuous stream of income such as royalties.
The staking system rewards investors who are more invested in the projected. The more NFTs, the more and better rewards they will get with their exclusive ownership benefits.
Burning and Sweeping The Floor
Sweeping The Floor is where the project buys back NFTs at the current floor price. This increases the overall floor price and the overall value of your NFTs. These NFTs can ever be put back into the marketplace, given as an airdrop, or burned.
Burning an NFT destroys the token and removes it entirely from the blockchain. This is done by sending the NFT to a verifiably unspendable address, however, the transactions leading to the burn will remain on the blockchain ledger.
This restricts the supply and increases the overall value of the project.
Utility Token
A utility token provides access to a specific product or service with a blockchain ecosystem. These tokens allow users to perform some action on a certain network.
These utility tokens are not mineable and are usually pre-mined. Meaning they are all created at once and distributed in a manner chosen by the project team.
These tokens are usually rewarded from staking in your NFT project. There is also a concept called rationalization, where NFT projects buy specific NFTs and distribute the value through their utility token as they appreciate.
Projects with Promising Utility
Mutant Cats
Mutant Cats is a DAO that uses its treasure funds to buy potential blue-chip NFTs. Their original first purchase was Cool Cats NFT.
They also provide access to and voting rights over the Mutant Cats DAO, 10 $FISH token per day per Mutant Cat NFT (Passive Income), and staking & airdrops.
Every time Mutant Cats acquires a new NFT, it fractionalizes it and gives ownership back to Mutant Cat holders in the form of a $FISH token.
They currently own 11 Cool Cats after spending over $380K of treasury funds.
Fishonomics
Here’s how it works:
Every day each Mutant Cat NFT receives 10 $FISH tokens per day. Since the $FISH token gives you partial ownership of the fractionalized NFTs, getting your hands on $FISH tokens seems important for your investment.
To get $FISH tokens, you have two options:
Buy $FISH on SushiSwap
Stake Mutant Cats NFTs
If you stake your NFT, your wallet is credited with $FISH tokens throughout the day that can be withdrawn at any time.
Roughly over 80% of all Mutant Cats NFT are staked and earning passive income through $FISH.
They are planning to move to breeding, new mints, and more for their utilities soon.
CyberKongz
CyberKongz launched in March this year with 20,000 NFTs split amongst 3 different types. These have perks and features for holding them seen below in the illustration.
This NFT project is probably one of the most sophisticated utility token systems in this space at the moment. With constant innovations and big plans for The Sandbox Metaverse, it is one of the best projects in OpenSea currently.
For the lands that they have bought, they are planning to build:
Kongz Island: a 24 x 24 sprawling estate with dangerous jungles and ancient ruins that spans different biomes.
Neo Kongz City: a 12 x 12 futuristic urban landscape where the city Kongz like to hang.
Shrine of Kongz: a 3 x 3 estate featuring our 1 of 1 Shrine of Kongz build which is the spiritual home of CyberKongz and a beacon of hope for all lost souls.
Bananaomics
The $BANANA token seen in the utility image above is used for everything in the CyberKongz Universe.
Aside from the standard use cases such as breeding Baby Kongz and changing the name of their PFP (2D and VX), they are planning to implement their token into the Sandbox metaverse.
These items could include wearables, mobility items, weapons, and more.
They are also introducing $BANANA to weigh in their governance voting system allowing the community to have a say through their DAO.
In the ecosystem, only Genesis Kongz can yield $BANANAs. They yield 10 of these tokens per day, with 1,000 Genesis Kongs, the daily supply is 10,000 new $BANANA per day.
With the only utility at the moment is to breed Baby Kongz, after the demand has died off, they will have to find new ways to innovate for the token supply to circulate and be used.
Wild Goat Gang
The Wild Goat Gang is a collection of 9,999 NFT's with hundreds of elements for fans who appreciate those who've achieved GOAT-status.
Each artwork is original and completely hand drawn with its own color palette.
At the moment they are the first Charity and Educational NFT that focuses on helping newcomers enter the space seamlessly.
Their utility is multidimensional where it doesn’t focus on monetary or gamification, but the enrichment of each member to reach their best version of themselves, the GOAT.
Charity
Wild Goat Gang is a big believer in giving back. Their first charity that they are going to donate from a % of mint revenue is to Black Goat Farm Sanctuary. They have already donated 30K and will be donating the rest is mint is completed.
Proceeds will be donated to help rescue and care for orphaned, injured, and neglected animals.
Sandbox Game Integration
Upon 50% mint sellout, we will use the funds to purchase land inside The Sandbox. Buy & Sell Attributes, Engage in Play-To-Earn games, Party in the barn, they are making a virtual and real-life community of GOATs.
They have completed this promise and spent over 27 ETH for a piece of land next to Snoop Dog!
They are discussing internally at the moment if they should continue to expand or look around in other metaverses.
If you want to learn more about Sandbox, here’s an article explaining Everything you need to know about Sandbox.
$HAY Tokenomics
Wild Goat Gang’s unique currency to their ecosystem. Similar to CyberKongz, they are planning to integrate the token to be used for purchasing merch, renaming goats, services, and more.
Cyber Goats
Holders of a Wild Goat will be airdropped a circuit board that will allow you to augment your Wild Goat NFT, into a Cyber Goat living in a hyper-futuristic, neon cityscapes, dystopian future.
GOAT University
GOAT university is a community where experts in their fields will teach you exactly how to make money and level up in life.
This is a community where you will have access to crypto analysis, DeFi, E-commerce, Copywriting, Freelancing, and more.
We will have an educational library on the blockchain only available to NFT holders where they can choose the subjects that they want to learn while being able to keep up with all the NFT news and info.
Full resources, full lesson plans, in-depth articles, everything you need to get rich and become educated in that chosen industry.
Bringing It All Together
I’ve ignored the community aspects of NFTs such as real life events, merch, and more. These are very simple utilities that every project can implement. I’m here to teach you about the topics that are confusing to beginners.
Regardless of these intrinsic utilities, the most important utility is creating a deep sense of genuine connection to your brand with your community base.
Your project is nothing without your community members so listen to what they are looking for. They’ll stay with you even when they have options to pay more, cost less, or offer up more status.
Can you imagine a fan, switching teams just because their rival’s jerseys were on sale?
What's Next?
If you enjoyed my article, I will be writing more education guides for The Wild Goat Gang to help improve your confidence as you continue to dive deeper into the NFT Space.
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