Non-fungible tokens make for great collectibles, yet not all projects offer long-term utility. Different options can be explored in this regard, including a revenue-sharing system with NFT holders. These “piggy banks” incentivize holding, although that alone is never sufficient to succeed.
Revenue-sharing NFTs Have Merit
When people invest in non-fungible tokens, they usually have two choices. Either they flip for a quick profit or hold it long-term for a profit. Where that profit will come from exactly differs from one project to the next. Some ventures provide utility, whereas others hope for influencer support and the hype that process can generate. Both approaches are valid, although neither serves as an incentive per se.
Introducing utility for NFTs has proven to be an interesting problem. Many approaches can be explored, although very few options will work out well. Without a solid plan of development, NFT projects will lose traction quickly, and prices will crash. If the volume decreases too, it is often the end for such projects. A revenue-sharing model can offer some relief.
To put that into perspective, revenue-sharing is a tricky ordeal in the NFT space. Finding a balance between giving back to users and enticing long-term holding isn’t too apparent. As a result, initial revenue projections will often seem very promising, yet developers can only sustain them if a viable ecosystem keeps driving demand and attention. As has become painfully obvious, utility and NFTs do not always go hand-in-hand.
However, there are projects capable of offering a “combination” of sorts. They provide revenue-sharing and some form of utility, which are two sides of the same coin. One project, Sympathy For The Devils, shares part of the revenue generated through secondary market sales. Moreover, they will let NFT holders merge their Devils to create new ones with rarer traits. It incentives holding through revenue and for the “merging”, at least in the short term.
What About The Long Term?
While the above example sounds interesting, it fuels a short-term incentive for holding onto NFTs. In the long term, however, something else will need to be created. Not all types of utility fuel growth, though. Crazy Crows Chess Club offers free Chess.com memberships to every NFT holder, yet the value of its non-fungible tokens has plummeted. It will remain difficult to provide long-term value that goes beyond speculation.
It will be interesting to see what the future holds for NFTs. Sustaining long-term attention is difficult in the crypto world. That problem only becomes more apparent when there is little or no utility that people care about. The approach of bringing NFTs into DeFi may offer a solution, but given the sheer number of NFT projects, that may not be as straightforward. Figuring out a long-term game plan involving revenue-sharing and utility will be the next hurdle to tackle.
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