Non-fungible Tokens: Popular Business Models
There is a lot of optimism and excitement for NFTs as the global sales volume rose alongside what might be the foundation for yet another crypto bull run.
Unlike last time, though, the NFT space this time has evolved manifold, with a plethora of new applications waiting to be adopted into the mainstream world.
Also, many entrepreneurs have finally taken a step toward planning their NFT businesses after an unfavorable period for Web3. We will run through the popular NFT business models one can base themselves on this year to taste success in the long run.
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Why Particularly Choose an NFT Business?
Although the Web3 realm has other elements, such as cryptos, decentralized finance (DeFi), metaverses, and hardcore blockchain solutions, the market scope for non-fungible tokens is comparatively higher this year. Also, most of the elements mentioned above can be easily integrated as part of an NFT business model.
Running an NFT business can also be easier for those not accustomed to deeper technological nuances of Web3, and they can learn them through experience. Additionally, NFTs have a lot of potential use cases that could make a change in how we live our lives, and enterprises can have the opportunity to be game-changers.
We will see the top NFT business models in 2023 updated to suit February trends, with the obvious ones to start, and delving into more futuristic models further down the list.
Profile Picture (PFP) NFT Collection
A business based on profile picture (PFP) NFT collections is the top model you can opt for in 2023. Although the model seems simple “to sell images and to manage communities,” the actual work brings more challenges, and the scope for innovation is abundant.
Collections such as CryptoPunks, Azuki, and Bored Ape Yacht Club have evolved into self-drawn ecosystems that defined communal activities in Web3. Running a venture based on such a collection also can ease your way into other NFT business models we will see further down the blog. All it takes to succeed here is a pinch of creativity, a pinch of utilities, and a touch of uniqueness that will be the differentiating factor.
Fine Art NFT Collections
If you are an artist, a musician, or any fine-art practitioner, for that matter, you can convert your talents into NFTs and garner widespread attention around you. People like Beeple, Ferocious, 3LAU, and Snoop Dogg have produced NFT fine-art content that has been sold for big money.
Even the 2021 NFT boom was partly a result of digital artists getting recognized by the Web3 community. All it takes is to create your art forms, mint them as NFTs in a marketplace, promote them to your target audience, and sell them. Royalties for secondary sales also make these collections worth the effort.
General NFT Marketplace
NFT marketplaces have been one of the successful business models in the Web3 space due to their nature of connecting creators and collectors. Particularly, those focusing on a broader spectrum have reaped huge success. Platforms such as OpenSea, Magic Eden, X2Y2, Sudoswap, and Rarible have set a role model for how startups can be creative by setting a unique point to attract consumers. Running a general or open NFT marketplace is not always about sales volume but also community retention. As a business, you should fix the niches you will sell in your NFT marketplace platform.
Niche NFT Marketplace
A niche NFT marketplace is a model where only specific type of NFTs are sold. These platforms, at times, tend to be exclusive for collectors and creators, and one must fulfill preset criteria in order to be part of the platform. Most niche marketplaces concentrate on selling fine art NFTs.
Operating such a platform can be challenging for a business, as its success depends on the niche’s popularity among the Web3 community. Still, with a unique point of appeal, one can garner trade movement through community building and social media engagement. You can even explore new niches, such as secondary in-game asset sales, that have been gaining popularity recently.
P2E and M2E NFT Games
Another popular business model is NFT gaming, which has evolved over the years. Models such as Play-to-Earn (P2E) and Move-to-Earn (M2E) grew in popularity during the pandemic-enforced lockdowns as people sought alternative earning methods while keeping themselves entertained. Applications such as Axie Infinity, Splinterlands, Alien Worlds, Sorare, StepN, and Meta Cricket League have set examples for the domain. Like every other model, having a unique factor in appealing to gamers alongside attractive gameplay and a feasible incentive mechanism sets the tone for an NFT gaming business’s success. It can be profitable as more people get into the NFT space for entertainment.
NFT Launchpad
An NFT launchpad is an application that allows brands and creators to mint and sell NFTs by better appealing to the market. The platform can also help early-stage NFT projects to raise funds through Initial NFT Offerings (INO), allowing them to form their initial communities.
Since the model is inspired by the Initial DEX Offering (IDO) launchpad, there will be no concerns of neglect from the Web3 community. Although gaming-focused NFT projects majorly use NFT launchpads, it isn’t wrong to appeal to the broader NFT community. This model can be a lucrative venture option in 2023 as the NFT world revives.
NFT Aggregator
An NFT aggregator is a platform where the costs of NFT collections across NFT marketplaces are displayed for collectors to compare and decide. Some platforms also allow bulk purchasing of NFT collectibles across marketplaces in a single transaction, easing collectors’ tension on spending gas fees. The model rose to stardom in 2022 following some high-profile acquisitions.
Platforms such as Gem (acquired by OpenSea), Genie (acquired by Uniswap), and Blur have set the track for startups aiming to use the NFT aggregation model. It has a lot of potential to be unearthed, and you might be able to become a significant player with a unique idea.
Metaverse X NFT
As we know, metaverses use non-fungible tokens in different ways. Right from land plots and avatars to in-game equipment, NFTs take up their space. Having a business based on metaverse use cases can be the ideal choice for startups as it can generate income constantly with the influx of new users.
The broad scope of metaverse applications offered for NFTs enables entrepreneurs of all scales to participate in these virtual worlds. Popular sub-models here include NFT real estate platforms, NFT showrooms, and avatar NFT marketplaces. You can tap on the emerging model now to become renowned on tomorrow’s internet.
Phygital NFT
For a long time, NFTs have been offering digital experiences, and phygital NFTs changed the perception by adding real-world elements. Businesses based on phygital NFTs have gained success in recent times, owing to the increased adoption of NFTs by established brands across industries to captivate the tech-savvy Gen-Z consumers.
Although fashion and sports have predominantly used phygital NFTs so far, other NFT types can be brought in, too, as some artists have started offering their creative collectibles in both forms. Whether running an NFT marketplace selling these or creating these yourself for your business, you can be assured of becoming successful in the long run.
DeFi X NFT
Decentralized Finance (DeFi) has risen to prominence following the increased crypto usage around the globe, and NFTs could not escape them either. Just like physical items have a role in banking, NFTs have the same role here — being collateral assets. However, it is still a new industrial domain due to the subjective nature of NFT pricing.
Still, with the Web3 community drawing out regulations on how to use NFTs in DeFi loaning apps, a platform based on the model with clear guidelines can become victorious in the long run. If you plan to sustain yourself as a business in the long term, NFT loaning platform can be a great idea.
NFT Ticketing Platform
NFT ticketing rose in popularity last year as more event organizers wanted to provide secure and authentic event experiences in both worlds. Platforms for NFT event ticketing ensure the underlying parties know the attendees and enable fans to sell tickets in the secondary market officially. Also, POAP (Proof-Of-Attendance-Protocol) NFTs can be offered as souvenirs to event attendees.
These platforms can make a successful business as physical events are back in full swing, not to forget the increase in metaverse events. By partnering with event management companies and artists, you can find your venture catering to events across the globe at all times.
NFT Subscription/Membership Platform
Another recent trend in the Web3 space has been NFTs for subscriptions and memberships. Just like ticketing, offering authentic experiences to customers.Startups based on content streaming, tourism, and hospitality have started showing themselves in the NFT space.
Hosting a business based on a relatively novel model like this can feel challenging at first, but it is all about sustaining oneself to emerge successful after a few years. Major streaming service providers and hospitality providers are predicted to support these NFTs in the near future as Web3 adoption reaches new heights.
NFT Wearables
The concept of NFT wearables was initiated when avid digital collectors wanted to find a way to openly show their holdings without having to pull out a device every time. Wearables featuring digital screens that can display NFTs surfaced long back, although they haven’t been adopted broadly yet.
2023 could finally be the time for the NFT community to use these devices fully, and you can tap on the opportunity to begin a venture manufacturing wearable devices such as necklaces and bracelets with screens. As technology evolves, wearables can expand to clothing that can display a person’s NFTs.
NFT eCommerce Store
eCommerce has become an integral part of our lives today, and including NFTs will help businesses and consumers have authentic and secure purchasing experiences. The NFT eCommerce business model is one of the underrated in the Web3 world as it reduces the chance of fraud frequently experienced in the Web2 eCommerce market.
NFT eCommerce has already begun in some form through phygital NFT providers, although full-fledged experiences are yet to gain the limelight. You can make use of the model’s nascent nature to set yourself up for success in the future when eCommerce NFTs become the norm.
NFT Social Media Application
We all have seen how much impact tech giants can have on social media with access to vast amounts of data. NFT social media applications emerged to eradicate such issues by offering complete control over generated content to users. These platforms as a business model can be ideal for those looking to redefine feed-scrolling experiences.
The NFT social media business can allow users to reap income by enabling them to monetize the content they generate. While this can seem unattractive, the model provides fee mechanisms to be implemented that help business owners to generate revenue without compromising on user privacy.
Dropping Some Final Thoughts
Henceforth, we have seen the popular NFT business models that can be used by aspiring Web3 entrepreneurs. While all these models present a promising future, they offer different levels of competition, as some are well established than others.
Also, if this article has sparked your brain to ideate on one of these models, you can either do it yourself (with an in-house team) or work with an experienced NFT service provider to launch a business in the best way possible. Always do your own research before delving into the NFT space as it evolves with increased global adoption.
