Expanding NFT Utility: Token Bound Accounts

Key Trends: NFT Utility

With Blur's incentive mechanisms and new NFT lending protocol, Blend, top-of-the-market NFTs are becoming more like financial assets instead of the initially envisioned community assets. Effectively, the purchase of these NFTs has maturated into a speculative use case where perspective buyers care almost entirely about price appreciation.

That is not a consumer product; it’s a financial product. It has little difference compared to a DeFi token whose purchase thesis is likely driven by an expected increase in demand due to product developments or market conditions.

However, while the top-of-the-market NFTs with the majority of attention become financialized, there are a number of new projects and consumer infrastructures aiming to bring utility-driven use cases back to NFTs. This is important as new utility models drive new consumer products and interaction models that have the potential to usher in sustainable growth to the sector, unlike worn-out speculative appeals (speculation has its place, but to get significant and sustained capital inflows, there needs to be a novel growth narrative).

Some of the most promising new NFT utility cases are being driven by:

• Social Profiles: Upcoming social graph protocols like Lens give users an interoperable profile to be used across crypto. The social graph also establishes the rules for minting content from that profile. Together these primitives, which are stored as NFTs on-chain, are the foundation for content-driven use cases for creators and communities.
• Multiplayer Creation: Crypto, at its core, is a coordination mechanism that allows various parties to work together trustfully. Bringing this to content creation allows for the creation process to be divided up amongst a large community, effectively establishing a digital supply chain at a global scale for the first time. Creators are using this function to co-create stories, digital fashion, and more, all powered by a bubbling creator infrastructure ecosystem.