- Summary:
- In particular, the addition of utility is enabling NFTs to be used to promote social good by incentivizing positive behaviour.
NFTs, or non-fungible tokens to give them their correct name, are digital assets that cannot be altered or split into smaller parts. Because their ownership can be recorded on the blockchain, they’re often used to represent digital collectibles or art.
The NFT industry has generated a lot of excitement and buzz, with multi-million dollar sales hitting the headlines last year. But unfortunately, the vast majority of NFTs don’t serve any purpose other than being a status symbol or a member of an exclusive club. But that’s changing as developers begin adding utility to NFTs. In particular, the addition of utility enables NFTs to be used to promote social good by incentivizing positive behaviour.
Such NFTs have a lot of potential to promote positive social impacts and contribute to a better world for us all.
To understand how they can do this, we need to understand what utility NFTs are. Essentially, they’re digital tokens that provide use cases beyond simply representing digital assets. They’re NFTs that grant special privileges, rights, or rewards to their owners that could not be accessed without holding it.
The most straightforward example is an NFT representing a digital ticket. Instead of issuing paper tickets to a concert or an event, you can use NFTs. Like the paper tickets, each NFT would be unique, giving the holder access to that event with a specific seat.
Utility NFTs For Social Good
As far as using NFTs for social benefits goes, one of the most obvious use cases is to sell the tokens and use the proceeds to raise funds for a specific organization, such as a charity. The sale of NFTs can provide an alternative source of funding compared to the usual methods of raising money. Moreover, such NFTs don’t just provide income from a one-off sale, as they can be programmed with smart contracts to ensure that the charity which issues them receives a portion of each subsequent sale. For instance, the charity would receive 5% of the money paid each time an NFT changes hands.
A recent example of this is Leyline, a startup that mints NFTs for social good. Last year, it was able to raise over $60,000 to go towards the medical bills of child cancer sufferers through the sale of NFTs. It did so by gathering a number of prominent digital artists who created a collection of NFTs, especially for the purpose.
NFTs can also enable nonprofit organizations to create a source of income by monetizing their physical assets without losing access to them. For instance, a museum can create an NFT-based digital copy of famous artworks and sell them to collectors while keeping the original, physical copy of that image. Such sales are proving popular, as shown by the efforts of Saint Petersburg’s world-famous Hermitage Museum. People are becoming more interested in this new way of owning digital assets, with NFTs able to prove who owns exclusive digital artefacts. For example, the Hermitage Museum has raised significant cash by auctioning off one-off digital copies of its most famous works of art as unique NFTs that prove their originality and provenance.
Saving The Environment
A more beneficial application of NFTs could be their ability to help fix environmental problems. For example, apple co-founder Steve Wozniak’s EFFORCE project describes itself as a blockchain-based energy-saving trading platform for companies that want to boost the energy efficiency of buildings or industrial processes. It allows them to find contributors willing to invest in their energy-saving efforts in return for a percentage of the energy savings they achieve.
NFTs are key to EFFORCE’s platform, as they effectively tokenize those energy savings, allowing companies to negotiate a portion of their future energy savings to secure funding for their projects. By tokenizing their energy savings, companies can sell them to obtain capital to implement their plans. The model is similar to that of Energy Service Companies that invest in energy efficiency projects to obtain positive economic returns. The NFT-based energy savings can then be traded on secondary markets.
Once a project is completed, the value of the energy savings it derives is then shared between the company, which sees lower energy costs, and NFT holders, who earn a return on their investment.
EFFORCE is just one example of an environmentally friendly NFT utility. Another is the German project CleanOcean, which has created yield-generating charity NFTs that aim to promote sustainable and eco-friendly trading with minimal carbon emissions. As part of this effort, its NFTs raise funds from donors, which are then used to incentivize volunteers to get together and clean up the world’s oceans. Those volunteers earn rewards for their efforts in cleaning up contaminated lakes and seas with additional tokens.
A similar effort was mounted by the Ukrainian women’s clothing TTSWTRS, which recently presented an NFT-based film called “Mission”, covering a funding expedition by local groups in Argentina and Chile with the aim of cleaning up the shoreline in remote regions of Patagonia. The NFT film was sold on “Truesy”, a clean NFT marketplace and platform, with the earnings donated to the “Parley for the Oceans” charity organization.
Protecting Animals
Beyond saving the environment, NFT creators are also using the technology to safeguard animal populations. A great example of this is SaveAnimalsNFT, a collection of NFTs created by Nuzai Network, which was sold to raise money to campaign against the testing of cosmetics and pharmaceutical products on animals in labs. The money raised was donated to organizations such as the Worldwide Fund for Nature, the International Fund for Animal Welfare, and the National Anti-Vivisection Society. SaveAnimalsNFT is hoping to raise over $1 million to fight animal cruelty by the end of 2022.
Meanwhile, Real Nifty launched the “Ultimate Green NFT” last year, an eco-friendly initiative that aims to protect Brazil’s Amazon rainforest. The NFTs were sold at a hefty price of $10,000 each, with the proceeds used to fund the purchase of agricultural land in Brazil that was formerly covered by rainforest. The project is all about “reforestation”. To that end, each NFT sale was used to fund the purchase of 1,200 acres of rural land and finance the planting of trees upon it. In return, the NFT holder gets to officially name that new forest while benefiting from the positive environmental impacts with a 30-year license on its carbon credit.
Other examples include “Extinction”, a collection of tokenized gummy bears created by WhIsBe that set out to highlight the plight of endangered animals. Proceeds from the NFT sale were donated to support groups aiming to protect the world’s most at-risk species.
NFTs As A Force For Good
The above are just a small selection of inspiring examples of NFTs that bring real value into the world by promoting social responsibility. At a time when NFT values are in sharp decline, the rise of NFTs promoting social good has the potential to help stabilize the industry and act as a force for positive change. Moreover, the concept showcases how the future of NFTs goes beyond their primary use case today as visual art and collectibles.
NFTs can go a long way towards tackling environmental, cultural, and socio-economic issues by promoting a more sustainable way of life and incentivizing people to live more responsibly and protect their environment. It’s an example of how NFTs will grow beyond the initial hype by offering a utility that promotes positive change.