NFT

Profile picture NFTs, or PFPs, are digital assets commonly used as avatars for social media profiles, especially on Twitter. The first PFP NFTs were CryptoPunks, created by Larva Labs in 2017, featuring a collection of 10,000 algorithmically generated characters with unique traits. Among the most renowned NFTs in this category are the Bored Ape Yacht Club (BAYC) PFPs, launched by Yuga Labs in April 2021. The highest-priced BAYC NFT, Bored Ape #8817, sold for $3.4 million. Notably, BAYC NFTs grant owners intellectual property (IP) rights, allowing them to commercially use and profit from their Bored Apes.

Some NFTs are being used to connect digital tokens with real-world rewards and experiences, known as Utility NFTs. These NFTs might belong to existing categories while also offering added value, such as membership in a club, access to real-life experiences, or association with physical goods. Additionally, some NFTs are specifically designed to provide access to real-life clubs, event tickets, nightclubs, or other experiences. This trend is influencing nearly every type of NFT, with retailers incorporating real-world utility into their offerings. For instance, Dolce & Gabbana and UNXD’s Collezione Genesi was among the first luxury NFT collections to include both digital and physical items, along with future experiential benefits. Other brands embracing Utility NFTs include Adidas, which offers exclusive crypto-themed clothing for its Into the Metaverse holders, and Nike’s digital fashion brand RTFKT, which provides digital and physical items for its Clone X Collection holders. .

The idea of soulbound tokens (SBTs) was inspired by Ethereum co-founder Vitalik Buterin's observation of "soulbound items" in the online fantasy game World of Warcraft, which are digital items that cannot be bought or sold. In a May 2022 report by Buterin and colleagues, soulbound tokens are described as "non-transferable digital tokens that represent social identity in a decentralized society." The report explains how accounts, referred to as "Souls," would issue individual, self-certified tokens that function like resume items, highlighting specific achievements, credentials, and past affiliations.

Art NFTs have their origins in a 1960s abstract art style created with the help of computer-controlled robots. By using various software and artificial intelligence tools, artists can generate a specific aesthetic through an algorithm that incorporates randomness, resulting in unique pieces that share a cohesive look and feel. Projects like Autoglyphs by Larva Labs, Lost Poets, and Ringers, as well as artists such as Tyler Hobbs, Robbie Barrett, and Matt Kane, have been pioneers in this space. While generative NFTs are available on digital marketplaces like OpenSea and Rarible, Art Blocks, a platform founded by generative artist Erick Calderon, also known as Snowfro, is dedicated solely to this art form. Art Blocks guides generative artists through the entire process, from creation to sale.

Music NFTs might seem counterintuitive—why buy a music clip when you can stream or download the song from platforms like Spotify or iTunes? The key difference is that purchasing a music NFT grants you ownership of the file, rather than just a license to listen. Music NFTs also create a new way for artists and fans to connect, allowing fans to invest in and support their favorite artists by owning a piece of a song or album. Imagine being one of the first to buy a music NFT from a promising artist who later becomes famous—you’d have a unique, potentially valuable proof of your early support. For artists, music NFTs offer the chance to engage with their audience in new ways, offering rewards like exclusive music, merchandise, experiences, and concert tickets. Additionally, some projects, known as Limited Digital Assets (LDAs), allow NFT owners to earn royalties from streaming rights or own a portion of the song. This concept was first introduced by Royal, a platform that mints royalty-bearing NFTs, with the initial LDA being 3LAU's song "Worst Case."