Community benefits are key to the long-term success of utility NFTs

By Shaun Abdi, founder of Legendary Racers

NFT collectibles have often sparked bitter debates about their inherent value, with some people ridiculing their lack of long-term usability. People are now aware that NFT 1.0 derives its value from its indivisibility, non-replicability, and rarity. But the market extends beyond NFT 1.0, which was limited to the ability to own a digital collectible. We are now in the NFT 2.0 era, where utilitarian NFTs generate new value propositions beyond mere collection.

Utility NFTs are much more than Twitter profile pictures. They add real, long-term value for investors and content creators. The intrinsic value of utility NFTs varies according to the benefits, rights and opportunities they provide.

Holders of these NFTs can enjoy special perks like early access to product launches and exclusive passes to virtual and in-person events. Above all, utility NFTs provide access to exclusive communities with plenty of rewards and incentives.

Community: the cornerstone of utility NFTs

Community is an important aspect of any NFT project and crucial to its long-term growth. Fine art photographer Dave Krugman has compared the NFT community to a mycelium, a network of interconnected fungi that survives on collective nourishment.

Likewise, NFT communities provide a space where people can share ideas, collaborate and support each other. They can also disrupt creative industries and promote equity in arts and culture.

Community membership comes with several exclusive benefits for NFT holders. Users have access to members-only areas in the metaverses. They are also part of invite-only groups on social media such as Discord and Telegram. Some NFT projects collaborate with companies that manufacture physical products and offer special merchandise to token holders.

In addition, the community participates directly in the governance of the protocol through the DAOs and contributes to future development. Utility NFT holders can also attend exclusive offline chat sessions and members-only events.

For example, Legendary Racers, a collection of 10,000 Ethereum-based utility NFTs, offers several exclusive perks and benefits to its community. The project builds the Legendary Racers Metaverse on Sandbox, where the community can access the NFT Gallery, VIP Sandbox Events, and the Online Clothing Store. NFT holders will have access to luxurious, members-only events at Formula 1 and the Legendary Racers club.

Nonetheless, the current bear market conditions have been dire for the entire NFT industry, with $12 billion wiped out of the market. In these dire conditions, utility NFTs and their particular focus on communities are needed to weather the storm. It’s ultimately a strong, tight-knit community that can save a long-term NFT project.

Surviving the bear market with utility NFTs

The bear market provides an opportunity to screen NFT projects and understand their deeper intentions. Without market hype and exuberance, greedy communities looking for quick, short-term monetary gains will not survive long.

However, value-driven communities that believe in a greater cause and create innovative technology will continue to thrive. Thus, a strong community that benefits from utility NFT projects will invest and help generate long-term value.

Besides collection and artistic significance, communities look forward to the long-term utilities of their NFT collections. A tight-knit community continues to support an NFT project even when market conditions are volatile. This forces NFT projects to maintain a community-centric approach, especially during bear markets. After all, the utilities of an NFT project and a strong community form a powerful feedback loop where they reinforce each other.

During a bear market, organic promotion and naturalized affinity towards an NFT collection from a motivated community is crucial. Belonging to the community provides a satisfying sense of belonging while helping the project survive the dreaded crypto winter.

A strong community is the key driving force that is intertwined with the artistic value of NFTs. Thus, NFT projects must continue to provide utilities for the community while the latter will ensure the success and survival of the project.

About the Author:

Shaun Abdi is the founder of Legendary Racers, a collection of 10,000 unique realistic NFTs stored on the Ethereum blockchain whose designs were created from over 270 traits made by fusing a unique combination of “DNA” under -lyings. Shaun has spent years building his own company and team specializing in race car design. He now leads the world famous team for Legendary Racers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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