If you have been listening to any recent SKALE podcasts, interviews, or in-depth tech analysis, you are well aware that NFTs comprise the fastest growing category in the SKALE Ecosystem. The SKALE Network has special properties that allow it to securely hold an NFT directly on the chain. When I say “directly on the chain”, I’m not talking about a contract that has a link to an image held elsewhere. I mean the file image or video is directly and securely held on the blockchain. This native storage approach is a huge advantage for SKALE as it is the only blockchain in the Ethereum Ecosystem that can directly hold files onchain. Additionally NFTs minted on SKALE can be created at zero gas cost. Literally zero additional cost to the developer or end user.
SKALE’s multi-chain network lets brands, artists, and builders mint, transact, and manage NFTs of all categories, and also provides a gasless environment with storage, seamless and secure interchain messaging, and AI capabilities. These capabilities give NFT-based ventures the ability to build highly scalable NFT projects/platforms with gasless minting and fast secure transactions on Eth chains.
Thanks to these technical value propositions and the USD$ Billion+ in value staked in the SKALE Network for security, many of the top global brands in gaming, entertainment, social media, art, sports, and more are selecting SKALE as their platform partner in conjunction with Ethereum. We’ll be announcing these partnerships as they go live based on the announcement schedules of our partners and our confidentiality agreements. In the interim, we’ll be putting together a series of content diving into the details of how the SKALE Network brings unlimited scaling potential and value to the NFT market.
As a start, we’ll discuss the various NFT use cases. Let’s dive in!
Collectibles (from CryptoPunks to Hollywood in-movie items)
Collectibles are a natural use case for NFTs. In the physical world, art, vintage items, and collectible cards have value because of their uniqueness (in the case of a painting) or their limited supply, in the case of a luxury good or in a gamespace.
Moving collectibles into a digital form and tokenizing them on a public mainnet not only preserves (and offers validation of) this uniqueness or scarcity, the digitization and tokenization also allows the potential for accumulation of new powers and new capabilities. Tokenized items are also more visible and tradable given their existence in a readily searchable decentralized ledger. Provenance is more easily maintained and proven. These attributes all make blockchain-based card games extremely attractive.
CryptoPunks and EtherRocks have gained widespread popularity as NFT collectibles, garnering eye-popping prices at auction and in NFT marketplaces. Established artists such as Damien Hirst and Eminem have jumped into the space. Hirst with his The Currency project, which is a collection of 10,000 NFTs which correspond to 10,000 unique physical artworks. Eminem with his Shady Con NFT which is a collection of Eminem-themed comic books, action figures, and original tracks. Although relatively simple — tokens to digital art — they showcase a few fundamental properties of NFT-based collectibles namely universal access, global liquidity, and perfection of ownership rights.
And while these collectible forms will continue to grow, they will likely be joined or enhanced by innovative approaches to digital art including access to real world events, additional token opportunities, evolving art or mutating art, or other adaptive uses of Web3 technology.
NFTs are also an incredible tool to drive fan engagement as a continued interactive experience. This is a far less known category in the NFT space but will soon be utilized world-wide.
Imagine a membership card with immutable properties and functionality. This membership card gives you access to special merchandise, special events, and insider access to your favorite sports teams, musicians, celebrity brands, and more. Not only does it give you access to events, but it also puts you at the front of the line to purchase digital collectibles offered by these entities/individuals.
Let’s dig deeper into the use case of a professional sports team. In the near future, your favorite sports team will be issuing a membership card that itself is a high value collectible art image with special features. By owning this card, you will get to buy limited edition signed merchandise from the team. You’ll be able to purchase advance special access tickets. You’ll have special access to meet the team at insider events. Someday in the future, you may even be able to own part of the team by holding one of these limited edition membership cards.
Why blockchain and NFTs? Because the card is truly yours and is certifiable limited in supply by onchain mechanics. Different levels or tiers can be easily incorporated into smart contact logic. Also, the ownership is transferable. It can be integrated seamlessly into market places where fans can trade up or down to different levels.
Why do we not see this in action yet? Gas fees. Minting NFTs is expensive. Throw in complex computations for rights affiliated to ownership and you are talking about massive costs in terms of gas fees. It would be thousands of USD in gas value to perform the functions required over a single sports season. SKALE enables a zero gas fee environment to execute complex smart contracts that help bring the full value of NFTs to life.
Music & Art Media Rights
Music and art media rights will be going through a massive revolution, not unlike how the shift from broker-owned MLS listings to publicly available online directories made home shopping possible from any place in the world.
Music and other media copyrights are largely a private and closed world. This dynamic may work for top music artists but it quickly fails for all but the few. Add in global rights and other media forms such as photos, videos, graphics, and all the derivative works involved in these media forms and the digital rights management issues are enough to throw up your hands and walk away.
Enter NFTs. With ownership rights assigned via NFTs, global rights management becomes far easier and far more exciting. Ownership can be quickly determined and validated. Universal marketplaces can be developed. Pooled ownership can be arranged and royalty payments greatly simplified.
A decentralized streaming service, for example, is able to track all the plays for the songs in their catalog and transparently make payouts to their rights holders — paying directly into the account or the accounts of the rights holders. Tracking of plays and other app actions can be recorded on-chain and so auditing becomes a matter of auditing chain records, making it more difficult to skew or game royalty payouts.
The SKALE Network is well-suited for media streaming services and digital rights management because of its gasless transaction model, added node-based storage capabilities, multi-chain-based approach, and NFT standard support. Given the high traffic nature of streaming services, any Web3-based solution will need to offer high throughput, low-cost transactions, a high degree of decentralization, and ERC compatibility — all attributes that SKALE offers out of the gate.
NFT-based solutions may sound complicated much as websites seemed complicated back in the 1990s. When it comes down to it though, NFT-powered digital media rights will soon be seen as so logical, that it will cause people to look back and ask how they managed prior to the advent of crypto and NFTs.
Online gaming is a natural fit for NFTs as gaming was the first to define the concept of a virtual good. Almost from the beginning, virtual goods became an integral part of gameplay whether it came in the form of weapons, keys, coins, special powers, skins, or other gaming elements that enhanced gameplay. Marketplaces for purchasing, trading, earning, or otherwise obtaining virtual goods became an integral part of every game.
The concept of virtual goods in crypto is very similar except that these goods can leverage the unique characteristics of NFTs to create a meta-universe of virtual goods. Virtual goods in current Web2 games have many elements including uniqueness and immutability but when you add in standardized protocols, the potential for interoperability, traceability, programmability, and a common digital monetary system, the possibilities expand tenfold.
A standard way to identify in-game assets along with common marketplaces will expand markets and if game makers choose to allow federation or programmability of assets, this will make current virtual goods look like an atari pong game. Allowing virtual goods or powers to be used across games within a universe or take advantage of the programmatic nature of NFTs — either by adding or subtracting powers or having NFT-based powers mutate based on any type of circumstance you could dream up — adds new possibilities for gameplay.
Digital currencies as first primitives in Web3 also allow for new economic models and revenue streams — play-to-earn being one of them. (Play-to-earn is a model for games where players can earn real money or other rewards in their games by playing.) The SKALE IMA Bridge provides seamless and secure bridging to and from the Ethereum mainnet and SKALE Chains which makes moving assets throughout the Ethereum ecosystem an easy proposition.
The Metaverse (or metaworld) is one of the fastest growing categories in crypto. NFTs are widely used to support everything within these worlds — from properties and buildings to billboards, vehicles, and other game elements. Because of their active and innovative use of NFTs, the Metaverse is becoming an important marker for how NFTs and Web3 will shape every facet of property rights — from registration to purchase, transfer, leaseholding, dividend payout, and more. The concepts and contracts put in place within NFT-based virtual worlds are bound to find their way into the real world, regulation permitting.
Using NFTs to manage property rights makes logical sense as it simplifies title management as ownership and ownership history is recorded on-chain. Standardization around common IDs (i.e. smart contracts) will unify and transform property rights and property management. A quick look at VIN numbers in the auto industry shows how common IDs unify data management and tracking across an industry from manufacturer to dealer to repair and more.
Combine standardization with automated processing and new dimensions within virtual worlds open up. NFTs and smart contract processing create opportunities for pooled purchases,and built-in mechanisms for dividend payouts. Payments, for example, can get sent directly into the account or accounts of the leaseholders. And just as with crypto-based games, virtual worlds that decide to open up and federate their activities with other worlds will gain in-cross-world interactions.
Event Ticketing & Experiences
Using NFTs for event tickets make sense even just at face value — as a way to standardize and simplify the process of purchasing and redemption (tickets go in your digital wallet and you show or signal ownership via your phone). It also serves as an easy way to cut down on counterfeiting (“Is this a valid ticket and does this person have the authority to sell it? Let’s check.”) These two aspects make for some easily understandable benefits and quick wins.
Expanding on the possibilities with NFTs takes this solution from some simple optimizations and fraud protections into greater potential for enhanced experiences and customization. The traceability of events lets event producers and sponsors maintain connections with attendees before, during, and after events. Special offers for attendees? Not a problem, just show the event ticket. Loyalty points or offers for frequent attendees, also readily doable. Special benefits for early purchases or partial refunds or commissions for referrals are also possibilities.
The traceability, programmable nature, and standardization of NFT-based tickets will quickly transform an event from a single happening in space and time into a potential chapter in a number of new narratives. Relationships between attendees and the artists (or the event producers or the event sponsors) can extend beyond a singular event and continue post event.
An example of this is an event-based company that is building a protocol to allow for crowd sourcing of events — getting attendees to put up funds in advance in return for potential proceeds based on the success of the event. In the case of a profit from the sale of merchandise, food and drink, tickets, media rights, and other revenue sources, these early attendees/sponsors would be paid out based on an agreed upon rate schedule. With this model, attendees have an incentive not only to attend the event but also to drive people to it and increase its success. This app uses NFT-based tickets and smart contracts to record the events that patrons are participating in, as well as pay out participation rewards at the end of the event.
As with media streaming services, the high traffic demands of NFT-based ticketing services need solutions that are highly scalable and feature low-cost minting, trading, and management costs. As with above, the SKALE Network is well-suited here as well. It features a high-throughput Proof of Stake consensus model with gas-free transactions, and with strong security and operational ties into the Ethereum mainnet thereby providing SKALE Chains with many of the security properties of Ethereum.
Other NFT Use Cases
Here is a sampling of other uses for NFTs, ones that we may address in future posts. These cases can all make use of many of the powerful and unique benefits of NFTs — namely, standardization and interoperability, transparency and tradeability, immutability, programmability, and more.
- Certifications and Credentials
- Name Services - Domains
- Trademarks and Copyrights
- Luxury Goods
- Product Goods
- Commodity Goods
- Transportation Vehicles
- Real Estate (Buildings, Properties)
The future is extremely bright for NFTs and Web3. As with Internet 1.0 and Web2, the early use cases will replicate established ways of doing things — early websites looked like printed magazines and newsletters, early digital photo albums used binder metaphors. NFT-based applications, though, will quickly evolve to use new and novel metaphors that take advantage of the innate capabilities of NFTs.
The design of the SKALE Network makes it well suited to NFT-based solutions. The no-cost/low-cost nature of its transaction model means that the costs to mint, trade, and manage NFTs becomes almost non-existent. SKALE’s high capacity multi-chain approach means it can easily handle the most demanding NFT marketplace or app needs. Its Eth-native approach makes it easy for any Ethereum developer to use the network as almost any Eth-based wallet, standard, or tool can be used on SKALE. Lastly, its security and operational ties to Ethereum provide many of the same security assurances that you’ll find with the Ethereum mainnet.
The digitization of virtual and physical goods as unique and identifiable assets — making use of standard protocols and native programmability — will transform all sectors of society — from art, entertainment and media to business and commerce and everywhere in between. It’s fun to chuckle at the rudimentary nature of CyptoPunks, EtherRocks, and NFT-based metaverses but in their simple beings lies the makings of a revolution that will transform the world.
** Mention of any NFT project is to explain NFTs in the general Ethereum space. We will be announcing specific NFT partnerships across gaming, entertainment, social media, art, sports, and other sectors as they go live based on the announcement schedules of our partners and any agreements in place.