Blockchain technology and cryptocurrency have given rise to non-fungible tokens (NFTs), unique digital assets stored on a blockchain that represent ownership over items or characters within virtual worlds.
NFTs can be used to represent virtually any work, from visual art and movies to music videos or books – but are especially favored for adding an air of collectability and rarity to virtual platforms like video games.
Game Assets
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Game assets are digital files used to construct video games. They range from 3D models and sound effects, to textures. Game assets can also be sold through asset marketplaces, providing developers with premade gaming elements they can plug directly into an existing codebase and use for prototyping games before final design decisions are made.
Fortnite and CS:GO have long featured virtual assets as part of their gameplay experience, and using NFTs to back these items gives gamers true ownership of them without being stolen or duplicated by third-parties. Furthermore, using NFTs also expedites transactions when trading items between players in-game.
The NFT format is ideal for representing in-game assets as it represents them as unique pieces of data that can be proven to belong to one particular player, similar to how crypto wallet addresses can. This process can be assisted by blockchain technology which keeps track of every transaction recorded therein; additionally, content creator public keys are stored there too and used as verification that an NFT was indeed produced by them.
NFTs can be used in games to represent items and characters who evolve over time, similar to how digital paintings or rare recordings may gain value over time. Gamers find in-game items which evolve exciting as they add an interactive and collectable element to the game experience.
One notable NFT example is CryptoKitties, a virtual collectible popular among gamers. Another notable NFT example is Superplastic’s collaborations with celebrities and brands to offer real world products and experiences blended with virtual. Recently they collaborated with Gucci to release collectables such as house codes from their Gucci Aria collection as well as an 8″ tall sculpture representing one of their characters.
Virtual Items for the Metaverse
As the metaverse grows and develops, companies are taking advantage of its technology by creating virtual items for its space. These digital products can serve various functions from virtual real estate and in-game items to art or collectibles; plus brands can sell these virtual products on open markets or platform-specific marketplaces.
Accenture leverages Microsoft Mesh to onboard new hires by creating an immersive virtual space called One Accenture Park. This platform features an amusement park-esque office with virtual boardrooms and digital monorails connecting exhibits; employees using corporate avatars are invited to explore and become acquainted with Accenture’s culture, values and mission as they explore it together.
Many virtual items designed for avatars can only be accessed with tokens. Examples include clothing designed to be worn during games, cars or boats used for racing and furniture designed for virtual homes. Yuga Labs took its yacht club inspiration for the metaverse to develop an exclusive membership system rewarding users with special objects in-world and access to special content – other projects like LinksDAO, Gary Vee’s Flyfish Club and OneOf have since followed suit with membership-based metaverse models.
Though still young and developing, the metaverse provides marketers with limitless opportunities for engagement with customers. Some brands are already tapping into its vast potential by creating unique digital replicas of physical products to generate excitement within this emerging space. Fashion label Hermes recently collaborated with digital art startup Rarible to sell virtual Hermes scarves on NFT marketplace to align with their vision of providing luxury goods while catering to Gen Z consumers.
NFTs can also be used to protect physical products from counterfeiting or unauthorizaitve reselling in the metaverse. A NFT can be programmed with a link to an accurate digital rendition of their product that automatically shares it across authorized sales channels, thus discouraging unapproved resellers from making money off it by selling without authorization and violating intellectual property rights.
Real-World Assets
While media attention has focused heavily on using NFTs for digital art and collectibles, they can also be used to represent real-world assets like real estate. While this has significant potential, its use may not be as widespread due to all of the complications involved with owning real physical objects and transfer of ownership rights – including tax and recordation issues – that arise during real-world asset exchange transactions.
Tokens representing real-world assets can be used in numerous ways, ranging from proof of purchase to access to services. Serial entrepreneur Gary Vaynerchuk has developed several non-fungible tokens (NFTs) which enable people to gain special privileges, such as communication with him or access to his private library of books and videos – these NFTs are secured by smart contracts which facilitate ownership transfer as well as entitlement transfers between users of these benefits.
NFTs can also represent real-world assets by acting as pointers to other data. Similar to how hyperlinks work on the internet, but instead linking to websites or files located on computers instead, NFTs act as pointers to data stored on blockchain networks that allows it to store vast quantities of images, music files, documents and more.
NFTs connected to such data can help artists and other creators circumvent recordation issues when distributing their work, but there may be concerns regarding its permanence if lost or destroyed – leaving people without proof of ownership of the works in question.
NFTs that serve as pointers to external data are known as dynamic non-fungible tokens (dNFTs), as their values may fluctuate over time based on how their smart contract governs them. This feature makes dNFTs especially helpful for tracking real world assets such as cars that require updates regarding maintenance history; or for tracking physical goods in supply chains where inspection or delivery statuses might cause it to change dynamically over time.
Dynamic NFTs
Dynamic non-fungible tokens (dNFTs) are blockchain tokens that adapt their properties based on external conditions or data, for instance if you tokenized an actual property, its metadata might change with market value fluctuations, maintenance history records and weathervane readings.
NFTs can also be programmed to update their metadata based on specific events or conditions, making them perfect for representing artworks that change depending on various factors – for instance, Andy Warhol’s Marilyn Diptych could be altered on special dates to display certain hues or features to commemorate certain aspects of her life or events.
Metaverse-wide, dNFTs are ideal for depicting in-game items and characters that evolve or transform as you perform actions on them. For instance, an item like a sword may gain new characteristics when used in battle, or level up when winning an in-game level up game. Furthermore, paintings or music recordings become more visually attractive as more people view them.
As opposed to static non-fungible tokens (NFTs), which represent one version of an asset, dynamic NFTs use oracles and smart contracts as tools to collect off-chain data and change their metadata accordingly. Oracles allow oracles to retrieve off-chain information for access by oracles which update or change metadata as dictated by preset conditions or data sets accessed off chain by dynamic NFTs.
Some dynamic NFTs are designed to react to events in real-life, such as political or sporting ones. Beeple’s Crossroad NFT, for example, was programmed to display a different image if Donald Trump lost to Joe Biden in the US presidential election. NBA player LaMelo Ball also released his own set of dynamic NFTs that level up and reward their holders based on his in-game performance; for example when hitting three pointers or scoring blocks. Furthermore, their attributes and accessories change real time; features like animations or voiceovers further augment their appearances further.