Introduction
Non-fungible tokens (NFTs) have exploded onto the digital art and collectibles scene, with sales topping $17 billion in 2021 alone. But for many newcomers, there is still confusion surrounding why these digital assets accrue so much value and demand. In this article, we’ll explore the best ways NFTs gain value.
The Power of NFT Communities
One of the biggest sources of value for exciting NFT projects is the engaged community that forms around the assets. Just like physical collectibles, NFTs gain prestige and meaning through a shared culture amongst owners. The more participation and identity that builds around the NFTs, the more coveted they become.
Active communities drive up value through engagement. Projects that leverage Discord, social media, in-person events, and other community-building tools see demand for their NFTs increase as more users buy into the culture. A robust, hype user base is what gives NFTs their energy.
Strategic Scarcity Tactics
Scarcity also plays a huge role in NFT valuations. NFTs are unique by design, with most created in limited editions or even 1/1 drops. This built-in scarcity stokes demand. Given an engaged community, increased scarcity through lower NFT supplies bolsters the prestige and makes membership seem more exclusive.
Tactics like locked content, early access, and other benefits reserved only for early minters can further drive hype and FOMO. High-profile projects have leveraged scarcity tactics to great effect in boosting desirability.
Related: “Top 7 Reasons Why NFT Art Increases in Value“
Utility Adds Value
The utility and benefits that come with holding certain NFTs also enhances their value. Perks like access to events, airdrops, discounts, voting rights, and more make NFT ownership worthwhile beyond just financial gain. The more real-world utility attached, the more desire there is to hold the asset long-term.
Some projects are delivering tickets, community tokens, metaverse assets, and other uses for their NFTs. When done properly, this utility provides inherent value beyond speculation. Owning the NFT unlocks participation and experiences.
Conclusion
In the end, NFT value stems from users agreeing that the underlying assets hold meaning and worth. By building engaged communities, strategically limiting supplies, and embedding utility, projects can nurture and grow the organic value of any NFT collection. When users become true stakeholders and participants, the value created can be immense thanks to the novel social and economic activity enabled by NFT technology. We hope this article has helped you understand the best ways NFTs gain value.
