Practical Ways How To Add Utility To An NFT

28 AUG 2021
2 min read
When you sell an NFT, it is crucial to keep in mind that you are selling to an audience that differs from the traditional market. While most people still buy solely on the basis of art, a major part of the market consists of collectors and investors who are looking for digital items worth collecting and that will increase in value in some way.

So, how to add utility to an NFT? In this article, we'll go over the most practical methods.

What Is NFT Utility

Standard NFTs are non-replicable cryptographic tokens that exist on a blockchain and can be bought with cryptocurrency and any fiat currency. But what is NFT utility? Utility NFTs are sold based on their real-world applications and opportunities. This is why they are commonly referred to as NFTs with real-world application.

The essence of NFT utility meaning is that the NFT's value is determined by the physical opportunities, entitlements, or applications of token ownership in the buyer's life. Investors have a high level of trust in the creators of utility NFTs because their projects appear to be created to provide access to a utility rather than cash out.

Examples Of Utility NFT

Coca-Cola NFTs are one of the latest NFT utility projects. The world-known brand has been selling collectables in the real world for a long period of time, including the $500 vintage German plastic cooler. Coca-Cola was promoting four NFTs. One of them is a wearable NFT jacket modelled after their old delivery uniforms. The jacket's wearability is an example of how to add utility to NFT.

NFT projects like VeeFriends and BAYC add utility to their NFTs by making them look like VIP membership cards. So when you buy their NFT, you receive a lifetime membership in the BAYC community and access to VIP parties and digital merchandise. In the case of Gary Vaynerchuk's VeeFriends, the buyers of utility NFTs get access to physical events and lectures.
What is NFT utility

Benefits Of Utility NFTs

The popularity of adding utility to an NFT is rapidly growing worldwide because of the following advantages:

  1. Reliable technology. The NFTs are powered by extremely safe and secure blockchain technology. As a result, it is nearly impossible to hack or delete stored data. Blockchains protect the authenticity and scarcity of digital NFTs.

  2. Transparency. With the use of blockchain technology, the NFT market ensures the highest level of transparency in business activities, which in turn makes deception and corruption impossible.

  3. Investment diversification. There are significant differences between traditional assets such as stocks and NFTs. It enables investors to diversify their holdings.

  4. Ownership. NFTs serve as evidence of ownership of a digital good.

How To Add Utility To NFT

Today's most popular NFT projects have a strong utility focus, as many collectors seek the increased value and opportunities for engagement that it provides. As an independent artist, how can you provide this kind of value to your NFT buyers? Keep on reading, as below we share the most practical ways how to add utility to NFT.

▶️Create A Good Utility Strategy

A great plan means a great roadmap in the world of NFT. Therefore, you should promote your roadmap on your website to engage and excite potential buyers about what's to come and make their trading experience memorable. You also need to deeply research what NFT utilities are there and recognize that different utilities can do different things, such as increasing consumption and retention or providing opportunities to remain appealing in the long run.

▶️Add Value Over Time

NFTs serve as proof of patronage, meaning you can always monitor who is holding your NFT at a certain time and reward your supporters. Many creators later send free NFTs or merch to consumers of their first NFT collections. As a result, the NFT becomes more valuable as purchasers receive multiple products with a single purchase.

This model also helps to strengthen your consumers' loyalty as long as they feel rewarded for supporting your work. One of the ways of how to add utility to your NFT is to consider what additional content or products you'll be providing your supporters in the future. A wise idea is to inform your consumers about what each purchase entitles them to in the long run.
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▶️Connect NFT To The Real World

One of the ways of how to add utility to your NFT is to blur the distinction between digital and physical benefits for token holders. Look for real-world areas where you can add value with your NFT, and your holders can benefit. For example, you could bind your NFTs to specific content and grant transferable ownership rights. You may also provide your clients exclusive access to some IRL events, such as members-only parties, sports events, concerts, etc.

NFTs are ideal for ownership verification due to their non-fungibility. Are you selling show tickets? Instead, you could sell NFTs. Do you want to change the real estate industry? Then, move on to real estate NFTs. Do you work as a fashion designer? You can sell NFTs of your original designs and allow holders to use NFT 3D printing to create beautiful garments.

▶️Link Physical Goods To NFTs

One of the first utilities provided to owners of NFTs was goods. Most likely because a physical good enhances a digital one. The kind of NFT you've built has a significant influence on the products you sell to your holders. The key objective is to give your customers brand-appropriate items. One of the most common ways to link physical goods to NFTs is to sell merchandise – clothes, toys, and accessories.

Legendary digital artist Beeple, who has provided physical tokens linked to his artworks, is an excellent example of this done well.

▶️Make Your NFT Redeemable

The NFT utility foresees making it redeemable. It means that its owner will be able to trade it in for a certain tangible item or digital asset. For instance, Fewocious - a crypto artist, and RTFKT - a well-known producer of digital collectables and shoes, collaborated to create a line of digital sneakers. In their NFT project, owners of specific NFTs may exchange them for real shoes. Each of the three utility NFTs replaced a separate pair of real shoes. As an artist, you can send a digital painting or the actual artwork in tangible form to the buyers of your NFT.

▶️Make NFT Usable In The Metaverse

As the Metaverse is an immersive 3D virtual space, people who use this environment require products and services in order to fully integrate into the community, or simply flex on others in the Metaverse. It means that if you're active in the Metaverse, you can't live without NFTs because they represent your assets. As a result, the first and perhaps most obvious way of how to add utility to an NFT is to make it usable in the metaverse.

Keep in mind that you can earn significant profit by trading items and commodities in the metaverse. For example, RTFKT, a virtual shoe company, sold over 600 pairs of sneakers for more than $3.1 million.

▶️Add Unlockable Content

Additional content that can only be accessed by the purchaser of your NFT is known as unlockable content. When you buy a DVD as opposed to when you stream it, you get supplementary stuff like the director's commentary or bonus scenes, all in one convenient bundle. Adding more material is a simple way of adding utility to your NFT.

Your unlocked content can be anything you want it to be. The only restriction is imposed by the platform you are using. The most typical attachments made by authors are high-resolution photos, lengthy films, or even URLs to off-chain assets.
NFT utility meaning

▶️Provide A Service

Providing a service with a certain value for your NFT holders is definitely one of the best ways of how to add utility to your NFT. Keep in mind that not all buyers of your NFT are local to you. As a result, you may propose personalized critiques or diverse training videos to each of your consumers online.

Based on the type and concept of your NFT, you may provide cooking, art, music, and sports lessons, offer your expertise via a consultation, etc.

Service provision also allows you to improve your relationship with your customers. You can charge more for your knowledge and one-on-one critiques, which means you don't have to sell as many NFTs to make the same amount of money. Instead, you simply concentrate on providing the best service possible to a small group of people.

▶️Donate To Charity

NFT utility meaning also implies charity donations, regardless of what kind. Compared to other utilities, it may have the most impact and is the easiest to implement. Selecting the charity that best aligns with the NFTs you provide is one approach. If the charity you select resonates with your initiative, your community is likely to find it significant as well. Additionally, you may ask your holders which charity they like by picking several charities and creating a poll.

▶️Use NFT For Fundraising

Fundraising is often used as a method of how to add utility to NFT. You may offer an NFT as a prize for raising a specific sum of money for a charitable cause. NFT is similar to investment because its value might rise over time. As a result, this would likely be a more enticing award and may encourage people to raise more money.

What Are NFT Utilities For Holder-Only

Holders of NFT will be able to gain a significant number of different utilities. So what NFT utilities are there only for NFT holders? Below you will find a detailed description of the most effective utilities.

▶️Holder-Only Voting Rights And Governance

In essence, each NFT that someone owns earns them one vote. As a result, those with the most NFTs have the most voting power. But what exactly is there to vote on? Brands make numerous decisions on a daily basis. Giving their customers the ability to vote on such issues can help them create a better product and service. After all, customers tell brands exactly what they want and how they want it. At the same time, NFT holders highly value granted voting rights because they get to help build the brand and improve their own experience.

▶️Premium Content

You may add utility to NFT by locking top-notch content behind an NFT and developing a devoted following while facilitating an influencer trade. Project managers publish material that their audience wants to read. Separately, the market value of the NFT will be closely tied to the influence of a brand.

In March 2021, Kings of Leon pioneered the world of music NFTs with the release of When You See Yourself as an NFT series. Of course, in addition to the NFT format, the album was also released in regular formats on platforms such as Spotify and iTunes. A whole series of Utility NFTs was included in the album, consisting of different types of NFTs that provide different privileges.

One type of NFT was digital images and digital versions of songs which could also be redeemed for an actual limited edition physical vinyl copy of the album. Another type of NFT offered as part of the series could be redeemed for the best Kings of Leon concert tickets.

You may also provide whitelist opportunities to the owners of your NFTs. For example, if you are planning to create a new collection of products, your clients on the whitelist will access it first.
How to add utility to NFT

▶️Exclusive Service

Your NFT holders should also be able to receive some exclusive services. As it was mentioned before, it could be free workshops, sports, cooking, and art lessons that are personalized for each consumer. Therefore, customers will be able to get additional benefits and receive your comprehensive feedback.

▶️Exclusive Access To Events

Giving your token holders exclusive access to in-person events and meetups adds utility to your NFT. However, having an event does not necessitate renting out an entire stadium. Instead, you can host a banquet at a nice restaurant in a specified city. Alternatively, you can select a park where you and your holders can gather to create art together. The possibilities are truly limitless.

Exclusive-entry events have a long history as a successful marketing strategy. IRL events may range from business conferences to full-on riots, and they can take place both offline and online in the Metaverse. Other formats include community group calls, webinars, expert panels, and networking get-togethers.

▶️Holder-Only Offers

Among the most appreciated holder-only offers, one can highlight the NFT airdrops. It simply means that your holders will receive an additional token for free. Remember that the primary goal of integrating utility into an NFT is to provide value to your customers. If the only utility your NFT provides is an airdrop of another worthless token, there's no reason to do it. For an airdrop to be considered valuable, you must have a well-established brand.


Offering discounts and promotions similar to a membership loyalty program may be more adaptable than hiding a regular supply of premium content behind an NFT. Promo codes and discounts are an easy way to add utility to an NFT, giving holders the opportunity to get free stuff or a low-cost bargain while also keeping them engaged and loyal.

▶️Free Merchandise

The question "what are NFT utilities?" cannot be fully answered without mentioning free merchandise. The type of merchandise you provide to your holders is heavily influenced by the type of NFT you've created. If you create a sport-themed NFT, perhaps you can design a jersey or baseball cap that holders will receive. Of course, the merchandise does not only include clothing. It may also be stickers, toys, accessories, and even physical prints.

Why You Should Add Utility to NFT For Business

Since NFTs have been around for a while and have had a big impact on the market, a number of businesses have also entered the Metaverse. Your business can benefit from an additional revenue stream in an emerging market space regardless of the size of your company.

To begin with, adding utility to NFTs has the potential to be a profitable investment. Moreover, utility NFTs can be linked to physical items and ensure transaction traceability, authenticity, and transparency.

In addition, customers may be rewarded for their loyalty by entering loyalty programs and getting exclusive access to information or discounts, which encourage them to do business with you again. Some businesses might consider using a digital NFT loyalty card. They scan the loyalty NFT code each time they visit your establishment to earn loyalty points. When certain thresholds are met, you can push prizes, discounts, or blockchain tokens to be used in stores and enlarge your customer base.

What Is The Future Of NFT Utilities?

Through the sales of goods like concert tickets and access to gatherings or events, utility NFTs have already incorporated themselves into the web. However, the potential of NFTs is even more than this. Utility NFTs are anticipated to have a bigger impact on real estate transactions. To streamline the closing process and ensure that papers are safeguarded against fraud, destruction, theft, or loss, the deed to a home, for instance, might be an NFT rather than a physical document.

The same logic might be used to justify other significant purchases, such as vehicles. The blockchain creates a system of extreme transparency as the whole transaction history for that specific item is recorded in the digital ledger of the blockchain.

As you can see, the potential of adding utility to NFTs is enormous, as it will make the future safer.

Final Thoughts

While an NFT offers a valuable digital asset, its utility also helps increase its value by providing a physical product, passive income, or access to unique events and information. The utility NFTs give their owners a sense of belonging to a select group of people. The creation of that exclusive society for NFT owners can be assisted by NFT developers and platforms in a variety of ways.

The buyer you're looking for may be attracted by a well-designed roadmap and eye-catching utilities. Additionally, amenities like activities and products can strengthen a sense of community among users. Although you might not need many utilities for your project to succeed, you can do it easily, and it will provide a lot of value. Carefully consider all the ways of how to add utility to an NFT that we have described above and select those that comply with your NFT project the most.

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