The Rise of Utility NFTs: What You Need to Know

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It’s 2023 and most people have heard of non-fungible tokens or NFTs. The nascent technology that began as a test to see if unique digital assets secured on the blockchain could have value via projects like CryptoPunks and Bored Ape Yacht Club (BAYC) has evolved to touch nearly every sector of the economy. And one way it’s done so is with utility NFTs.

Whether it’s digital art, sports, music, gaming, technology, automobiles, finance, or fashion — utility NFTs have proven they can infiltrate a myriad of industries in novel ways. From token-gated access to special events, in-game metaverse items, music NFTs, and much, much more — the versatility of NFT technology is flourishing through utility NFTs.

In fact, for many people in the Web3 space, the present and future belongs to utility NFTs. Let’s dive a little deeper.

What are utility NFTs?

In 2021, generative NFT collections like BAYC and CryptoPunks made headlines when they sold for hundreds of thousands and even millions of dollars. The same year, digital artists like Beeple took the art world by storm selling digital art NFTs for millions. But one thing seemed uncertain at the time: What was the real-world value, or utility, of these digital assets?

Fast forward to 2023 and the NFT space has answered that question in several ways. Since NFTs can be linked to nearly any digital or physical asset via a smart contract, that means they aren’t just JPEGs that can be copy and pasted — as the original critics of NFTs claimed. Instead, NFTs can have utility.

Utility NFTs are a type of NFT that go beyond your average smart-contract token and have practical applications in real and/or digital worlds. For this reason, they are sometimes called “NFTs with benefits.”

Utility NFTs can serve several functions, from granting token holders access to exclusive real-world events or use cases, participation in government, passive income opportunities, access to a community, or other rewards.

Many NFT collections that began with no utility have adopted real-world use cases to bring value to holders. For example, BAYC holders receive token airdrops, access to limited NFT drops, and entry to IRL events like nightclubs and conferences.

Through the process known as token-gating — locking products, content, or experiences behind an NFT — creators are finding new ways to add tangible value to their products. We are well beyond the days when NFTs can be dismissed as “worthless JPEGs.” Utility NFTs have power and people are starting to notice.

Common Types of Utility NFTs

Some NFTs, like 1:1 fine art NFTs, only hold value in relation to market demand. However, utility NFTs offer immediate value to holders by giving them access to specific privileges. Utility NFTs are designed not just for collectors and speculators, but to give holders actual use-cases for their NFTs.

Here are some of the different types of utility NFTs:

  • Tickets to events. NFTs are being used to grant holders exclusive access to real-life and digital events. Organizers of events can release digital VIP tickets just like they would with traditional tickets, but with NFTs, there is no fear of fraud. Holders can also hold on to their NFTs like ticket stubs, showing proof-of-attendance and even potentially trading them on the blockchain. Digital ticket NFTs are being used to provide access to nightclubs, sporting events, concerts, music festivals, galleries, etc.
  • Gaming and gamification. Blockchain-based gaming is one of the hottest sectors of Web3, and utility NFTs can be used in gaming to represent in-game items like skins, weapons, and other items that can then be traded on secondary NFT marketplaces. Gaming NFTs allow users to own items that in the past belonged to game developers.
  • Virtual real estate. Metaverse projects like The Sandbox and Decentraland sell virtual land plots as NFTs. NFT land plots allow users to create businesses in the metaverse, rent their land, or do other projects that simulate real-life real estate. Though these NFTs have no utility in the real world, they can be monetized in the metaverse and many companies and big brands are getting on board.
  • Digital wearables and fashion. NFTs have been invading the fashion industry at a rapid pace. One reason is because fashion houses can now sell digital utility NFTs of their products that are linked to real-world goods like shoes, clothing, or luxury watches. The digital wearables have utility in the metaverse, and holders often receive in-real-life (IRL) products as well.
  • Passive income. Some NFTs are linked to passive income opportunities through royalties, staking, gaming, DeFi, yield farming, fractional ownership, and other mechanisms.
  • Governance. NFTs are often used to grant holders governance rights within communities. By doing so, this lets creators create collaborative, decentralized communities. Sometimes developers grant NFT owners absolute say over decisions, or limited say, depending on the type of community they wish to create. The concept is similar to that of decentralized autonomous organizations (DAOs) — peer-to-peer communities that govern Web3 platforms.
  • Premium content. All sorts of companies, artists, and creators can use utility NFTs to give holders access exclusive content. For example, a musician might sell an NFT that grants holders access to unreleased songs or footage.
  • Offers, discounts, promotions, rewards. Companies can use NFTs to offer holders discounts on products and services. For example, Starbucks has created an NFT rewards program.
  • IRL products. NFTs provide a public record of ownership that makes staking a physical claim on nearly any real-life item easy. This is why more and more NFTs are being tied to in-real-life (IRL) items. NFTs have been linked shoes, clothes, cars, houses, land deeds, makeup products, and much more. This concept of linking digital NFTs to physical products is being called “phygital.”

The potential for utility NFTs to unlock doors and tighten the connection between creators and fans is limitless, and in the years to come we’ll likely see more types of utility NFTs launched. This is one reason many Web2 companies are investing more time and money into Web3 and non-fungible tokens.

Utility NFT Projects Worth Mentioning

One of the best ways to understand utility NFTs is to look at some recent projects. At Rarity Sniper, we’ve reported on all sorts of utility NFTs hitting the market in a myriad of sectors. These days, most NFTs have some form of utility: Utility has become a prerequisite to compete in the market.

Listed below are some of our favorite utility NFT projects in recent months:


You might have caught pop star Rihanna at the Super Bowl or Grammys this year. But a small number of her lucky fans were able to buy a piece of her hit song “Bitch better have my money” via a utility NFT that gives holders a percentage of streaming royalties. Fans who purchased one of the 300 NFTs for $210 a piece were given 0.0033% of streaming royalties for life. This creates a whole new dynamic between the musician and her fans — one where they have a chance to share in her monetary success.

  • ART

The tattoo artist Ivana Belakova partnered with Web3 company Cosmic Wire to offer a unique utility NFT tattoo art collection. The NFTs give holders access to VIP ticketed events around the world, fireside chats, access to live studio sessions, and the chance to win a tattoo of their own from the world-renowned artists.


Starbucks made a splash in Web3 when it announced its Polygon-based rewards program. Shortly after, it dropped its first set of NFTs called “The Siren Collection,” a set of 2,000 stamps that minted for $100 a piece. The NFTs will come with IRL rewards like drink mixing classes and even a trip to Costa Rica to Starbucks’ coffee farm for some lucky winners.


IKEA’s Space 10 linked NFTs to real-life furniture to encourage better care taking and a longer lifecycle of said furniture. Customers can buy a chair that comes with a code that when scanned, an NFT is minted on the blockchain. The longer the person owns the chair, the more the NFT develops. When the customer wants to buy a new chair, they can bring it in to a facility or trade it in. The next person that owns the chair will also get the NFT. The idea is called “Carbon Banks,” and it’s aimed at keeping carbon dioxide from entering the atmosphere.


There’s been so many NFTs in sports it’s difficult to keep track. The most premier leagues in the world in soccer, football, tennis, baseball, basketball, MMA, and even chess have all been involved in Web3, and many with ticket-based utility NFTs.

One recent example of a sports-themed utility NFT is the National Football League (NFL) teaming up with Web3 gaming studio Mythical games during Super Bowl LVLL to drop NFT player packs. The NFTs featured players from both championship teams and can be used in Mythical Games eSports game “NFL Rivals,” which is expected to drop later in 2023.


In December 2022, Nike teamed up with Division Street to drop a set of NFTs that will help Oregon University athletes build their own brand. The augmented reality helmet NFT collection features 291 digital wearable helmets, ten of which are signed by Phil Knight. Holders received NFT-gated access to, limited licenses to the helmet’s creative content, and 1/291 physical Oregon University football jerseys. Furthermore, the AR helmets enable Oregon athletes to seamlessly commercialize their Name, Image, and Likeness (NIL).


The Tourism Authority of Thailand recently launched a new travel-to-earn NFT experience for tourists. The “Amazing Thailand NFTs” reward tourists with NFTs for visiting top destinations. By scanning QR’s codes in popular attractions, tourists can collect one NFT per person, per location. These NFTs unlock benefits like discounts on accommodations, travel, food, beverages, and more. Each person must collect at least three NFTs from three different locations to be eligible.


The British luxury sports car company, Aston Martin, dropped a set of 3,000 NFT tokens based on three of its iconic cars — the “Vantage V8 Coupe,” “1980 Vantage V8,” and the “Vantage GT3 Racing Model.” Holders of the NFTs will have the chance to race them in the metaverse game “Infinite Drive,” created by motorsports game developer The Tiny Digital Factory. The cars reflect their real-life counterparts, and the game features two racetracks with daily rewards available.

Final Thoughts on Utility NFTs

Utility NFTs have infiltrated gaming, the metaverse, Decentralized Autonomous Organizations, art, cosmetics, film and TV, fashion, music, and much more.

Recently,the California Department of Motor Vehicles announced it’s putting car titles on the Tezos blockchain, potentially making it easier to switch titles for citizens of the Golden State. This might not be your typical utility NFT, but if avoiding the DMV isn’t useful, we don’t know what is.

And though there are thousands of utility NFT projects in the world today, it’s still early in the game when it comes to the evolution of utility NFTs. Ultimately, since NFTs can serve to give holders access to pretty much anything — the sky is the limit for utility NFTs.

For now, this type of NFT has become so popular in the space that utility is expected. In the long run, this competition should benefit NFT holders and force companies and creators to innovate and deliver for their communities.

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