Limited Edition NFTs

There is an enormous opportunity to use NFTs to power creator communities. Because NFTs are freely exchangeable on the blockchain, they also inherently create an after-market for limited edition goods.

One needs only to reference StockX, the premium sneaker marketplace that is currently valued at $2.8 B, to recognize the possibility of NFTs flourishing in many verticals where scarcity and authenticity need to be enforced. Today, the company generates $400M in revenue by taking fees to certify that premium sneakers are legitimate and not fraudulent. Using NFTs that are tied to these sneakers would establish a clear sense of provenance as sneakers are sold from one buyer to the next.

In another manifestation of using NFTs connected to offline products, the limited goods do not need to be redeemed. For example, a collector can purchase an NFT that entitles them with the rights to redeem that NFT for fine art, luxury handbags, or other products but can store that product with the original manufacturer. Redemption can happen at any point in the future. Again, because NFTs are exchangeable, collectors could invest in luxury items with the hopes of these items appreciating in value. However, they no longer need to take physical delivery and can simply sell the NFTs representing the items in an after market to profit from their investments.

Taking this one model one step further, NFT-powered commerce can generate revenue even before products are developed or manufactured. In the web 2.0 world, we saw how crowdfunding platforms like Kickstarter and Gofundme were able to generate demand for creator projects. In the web 3.0, NFTs can be a better form to issue ownership of future redeemable products. Once again, because these NFTs are freely exchangeable they provide backers the ability to resell their ownership even before the projects are completed.