Reports about developments in the non-fungible token (NFT) space have overly focused on one aspect: the price. After all, with this emerging asset class, the main driver of interest so far is built purely on how much it’s worth, not so much why it’s worth that amount. Numbers give context to the story, which explains the obsession for many in following the highs and lows of the NFT market in dollar terms.
One of the most high-profile instances of this, of course, is the spectacular collapse in value of Twitter founder Jack Dorsey’s first-ever tweet, “just setting up my twttr,” a once-hyped NFT that initially fetched an eyebrow-raising price of $2.9 million, though it hasn’t seen anywhere near that level of investor interest since.
However, if you look beyond the prices and closely examine the types of NFTs that are being minted today, as well as who’s buying them, there’s a much more interesting story emerging: Once a plaything of the crypto affluent, new NFT projects are becoming more popular with a wider demographic of users because of what the NFTs are designed to do.
From crypto-native insiders to the heart of pop culture
Beginning as a digital asset innovation, NFTs were exclusively catered to crypto natives. Look no further than well-established NFT projects like the Bored Ape Yacht Club (BAYC). These algorithmically generated images were designed to appeal mainly to people who already held crypto wallets, understood cryptocurrencies and were comfortable with using them. Their value existed mainly in Web3 communities and inside the emerging digital asset industry.
Today, a new generation of NFTs are cropping up, designed to appeal to individuals who aren’t crypto natives, but novices. What makes these NFTs so desirable to people who weren’t born or bred in crypto culture is that they give the holder of the NFT tangible value in the physical world, not just in their crypto wallets alone.
In some cases, the value may come from exclusive lifestyle and social opportunities afforded by ownership of the NFT. In others, it’s the NFT’s association with established traditional luxury brands that makes it appealing. Just as when the now-ubiquitous QR codes first appeared, NFTs are a social experiment in potential use cases. While the financial rails have yet to be built, it is possible to currently envision real-world items of value, such as wine collections or club memberships, being associated with NFTs and transacted as digital assets.
Konnect is a great example of an NFT project that has one foot in the virtual world and the other in the physical one. As the name implies, its appeal is directed to individuals who are passionate about social networking – gaining access to exclusive parties and the latest, most on-brand physical designer goods, more so than the token value of what they’re holding in their crypto wallets.
In addition to exclusive invitations to token holders, such as to VIP parties held at some of the world’s hottest destinations for example, Konnect members can reap other benefits from their NFTs like lifestyle rewards and product offers. For example, Konnect Product Card NFTs, issued at random to members, are redeemable for luxury fashion items, jewelry and other designer products. Members can also acquire NFTs that provide exclusive access to services, loyalty points and product discounts offered by Konnect’s strategic partners and participating brands, such as the upscale retail brand Shilla Duty Free.
Another example of the successful intersection of NFTs between physical and digital worlds is NFTiff, a collection built out of a partnership between CryptoPunks and Tiffany & Co. (TIF).
NFTiff highlights how digital art can be further amplified to the mainstream rather than just targeted towards crypto natives. CryptoPunks issued 250 “NFTiffs” which entitled buyers to not only receive a digital CryptoPunk artwork, but also an 18-karat gold, gemstone-studded physical pendant version of it. Given that only 250 of the NFTs were ever issued, these limited-edition jewelry items are certain to become some of the hottest fashion items combining luxury goods, elite global branding and Web3 technology.
Unsurprisingly, these NFTiffs were quickly snapped up by buyers, demonstrating the voracious appetite for NFT projects that have desirable real-world luxury items tied to digital assets. The project’s basic premise of turning a digital artwork into a physical one has unlimited potential. This may be a winning formula for tomorrow’s NFT image collections, and creators are taking note.
NFT novices need to keep their assets safe
Konnect and NFTiff show that as more NFTs integrate into consumer experiences – whether in fashion, lifestyle or exclusive communities – the more appeal they will have outside of crypto-native circles.
With growing mainstream interest, though, comes greater institutional risk. High-profile cases such as the 2022 OpenSea phishing attacks, in which valuable NFTs were stolen – Bored Ape tokens among them – demonstrate that those who don’t have much experience with digital asset custody need systems in place to keep their NFTs safe when using, trading and storing them for their respective use cases.
One such safeguard could be an independent and regulated custody service, such as Matrixport’s Cactus Custody. Crucially, this service offers “cold” (i.e., physically separate from the internet) storage facilities in secure bank-grade vaults located across the globe.
Moreover, Cactus Custody allows NFTs held in its “warm” storage (i.e., online) to be traded via NFT marketplaces connected via MetaMask Institutional, one of the most secure decentralized wallets and crypto gateways used by the industry. As an additional layer of security, Cactus Custody also subjects all partner marketplaces, chains and protocols to rigorous approval standards before they are allowed to interact with wallets on the platform, ensuring that users are protected from bad actors and scam sites that lurk within the NFT ecosystem.
If the new generation of lifestyle-focused NFT projects is tempting you to make your first investments in NFTs, using Cactus Custody, to ensure that you have a safe and stable environment to buy and sell in, is a great way to give you peace of mind. For more information, visit Cactus Custody.