In 2021 the popularity of NFTs skyrocketed as the blockchain-based tokens started to take over the world.
We're all familiar with their meteoric rise – from Beeple's headline-grabbing Christie's auction, to more recent brand drops from Taco Bell, Gucci and a record-breaker from Adidas.
But in this incredibly fast-paced world, next-gen non-fungibles are already emerging – and this time they're going way beyond digital art and products. We're ready to welcome NFTs 2.0.
Level up through gamification
A core feature of this level-up is gamification. The collision of these two hugely popular areas – gaming as a medium, NFTs as a technology – combined with the power of crypto, is metaverse gold dust.
The collectible nature of NFTs plays perfectly into this world; using NFTs within gaming experiences creates a new added value for the user, with play-to-earn environments allowing players to trade, buy and sell their digital tokens with ultimate ease and enjoyment.
Platforms such as Axie Infinity are already enabling this, offering users the chance to earn cryptocurrency by breeding, trading and battling animal-like characters called Axies, incentivised by the fact they can earn more the longer they spend in-game.
The ability to exchange this crypto for real-world money upgrades the experience from simple gaming gratification to one of real-world value.
Alien World is another great example of integrating NFTs into the heart of gaming, with players able to stake and trade their tokens as well as get involved with running the planetary world's treasury.
It's easy to see how brands can play into these new NFT gaming platforms. Stella Artois' equestrian NFT venture with Zed Run is a notable example, with raceable horses available to purchase in a variety of unique breeds and themed skins.
Despite the reported issues surrounding high gas fees (the payment required to compensate for computing energy and completing the transaction), Bored Ape Yacht Club (BAYC) creators Yuga Labs launched Otherside this month, a gamified metaverse platform, where users can turn their NFTs into playable characters and purchase areas of land using – you guessed it – NFT deeds.
With big names such as Adidas, Google, Samsung and even Snoop Dogg already among Bored Ape Yacht Club's list of contributors, it's only a matter of time before we start seeing branded playable characters appear on the new platform.
The NFT evolution
But the real game-changer offered by next-gen NFTs is the ability to gamify the tokens themselves.
Transformational strategies such as applying special effects and "evolving" NFTs – similar to Pokémon evolutions – can give collections a new lease of life.
Forward thinker BAYC is already on the case, with access to its twisted offshoot Mutant Ape Yacht Club limited to owners who have exposed an original ape NFT to a new mutant serum. This not only makes the minting process fun for users, it also adds an extra level of exclusivity by introducing more ways to differentiate.
Taking this one step further, we also have the ability to combine NFT 1 with NFT 2 to create an entirely new NFT 3. This is an incredibly exciting prospect for collectors, where different NFTs can be merged in different ways to produce something totally unique.
The Roaring Leaders collection puts this into practice, with owners being able to combine male and female lion NFTs to create "Roaring Roccstar" cubs. The addition of a "dating marketplace" to facilitate breeding with other NFT owners means that building up a collection is a game in itself.
Forward-thinking brands are faced with an incredibly compelling opportunity to get ahead of the game, experiment with these emerging platforms and embrace the power of next-gen NFTs.
But the world of NFTs is as complex as it is fast-moving. Brands looking to maximise on these opportunities still need to take some time to consider all aspects before jumping in – from gas-fee implications to the sustainability of the blockchain and picking apart its smart contracts.
A carefully thought-out plan is just as important as the activation.
Garry Williams is head of MAD (Metaverse Advisory Dept) at Unit9