Blockchain technology has made it possible for thousands of different fungible tokens (FTs) to be deployed by a diverse range of projects across industries. These tokens' concept, use, and value vary drastically from project to project. The full spectrum can be explored, from native tokens like Ethereum (used for payment, fees, and transaction verifications on the network), to meme tokens like Dogecoin that carry abstract cultural relevance. When examining this range of tokens, utility becomes a central focus for investors looking to get involved, but could this same utility be achieved using non-fungible tokens (NFTs)? 

Utility-specific tokens exist to help execute specific functions or deliver access to products or services, representing the majority of tokens created for initial coin offerings (ICOs). While these specific utility tokens help generate interest and value around a product, all fungible tokens can have utility baked in. Most serious projects with a dedicated token are exploring the possibilities enabled via their token. 

For most of these projects, NFTs offer the same or improved functionality without the need for a fungible token. In fact, NFTs have the potential to replace FTs in many instances, especially as advancements are made to blockchain technology. Some might not see this potential for NFTs, but once you recognize it, there’s no turning back. 

Let’s take a closer look…

To understand precisely how an NFT can be used to deliver utility in place of a FT, you must understand the difference. 

• Fungible Token - An interchangeable asset on a blockchain, such as an ERC-20, with each coin or token possessing the same value as every other coin of the same type. 

• Non-Fungible Token - An asset on a blockchain, such as an ERC-721, featuring unique identification codes and metadata, distinguishing it from all other tokens.

The current ecosystem and state of technology bring out a more stark contrast between these two assets, as storage and network processing makes it difficult for NFTs to overtake FTs in all utility. I believe this will change over time as we begin to see that NFTs can become as granular or more granular than FTs. 

NFTs can possess more detail than FTs due to properties added by the creator, more traceability due to the unique identifier associated with each asset, and an ability to represent both a balance or a singularly identifiable asset. This combination makes NFTs a great “access pass” for products with features, allowing projects with specific product plans to incorporate NFTs as access verification (something I’ll explore a bit later).

The current understanding is that FTs are a necessity when deeper utility is needed, but that is changing as more becomes possible with blockchain. NFTs aren’t going to replace Ethereum’s use of ETH to maintain the network or DEXs like Uniswap that use their native token UNI to facilitate all platform processes and impact governance any time soon. But, for most projects, this level of utility is not needed, and NFTs possess more than enough power to deliver utility effectively.

We’re still just scratching the surface of what both fungible and non-fungible tokens are capable of. Where we’re at now is far different from where we’re going, meaning NFT utility will only deepen over time. Currently, NFTs present the best solution for offerings that are based on yes/no answers. 

For utility that requires an account balance (i.e., 500 tokens in the wallet to access a feature), FTs currently make more sense. However, holding a balance of NFTs is certainly possible, as users can collect several tokens and easily verify ownership of each asset. Even using NFTs to quantify a balance shifts the focus from the total number to the unique individual assets. 

Despite the potential here, I want to focus on the current power of NFTs as a replacement for FT utility. If a user can access a product, feature, service, or can’t, then NFTs are more effective than FTs. These binary offerings are some of the most commonly utilized among Web3 companies. Here are just a few examples of how NFTs can be used to deliver access…

• Visualizing Content: Permit NFT hodlers to access exclusive gated content while engaging with your brand or community in a more substantial way. Perhaps you are releasing weekly podcasts or providing educational resources for blockchain enthusiasts. No matter the content, NFTs enable access for verifiable hodlers. 

• Applying Discounts: This utility allows hodlers to receive product or service discounts, similar to a coupon code. Discounts can be enabled as soon as an NFT is verified in a user’s wallet. There is some potential for granularity here depending on the NFT’s traits or the number of NFTs a user holds.

• Dashboard Access: NFTs are a great way to grant access to a dedicated dashboard or platform by verifying the NFTs held in a user’s wallet. This functionality doesn’t need to be developed from the launch of an NFT collection, as dApps can be developed after the collection launch to use the initial NFTs as an access pass.

• Product & Service Subscriptions: Subscription NFTs are being utilized to enable products and services provided by Web3 companies. The NFT is purchased or obtained by the user, who then pays a recurring fee to maintain access to the subscription. This could be access to a discord channel or NFT infrastructure like we provide at Liteflow.

A misunderstanding still exists around the power and potential of NFTs, as new projects believe they need a fungible token to assist with utility delivery. I see a future where NFTs are seamlessly applied to all of our content and online engagement. Saas products and virtual experiences will be reimagined using NFT infrastructure without the need for some fungible tokens.  

This utility potential highlights how NFTs are a product and a digital asset that can be applied to Web3 experiences. A significant majority of blockchain transactions are already carried out for products and not the trading of digital currencies. NFTs are already dynamic tools that enable access to a feature, product, piece of content, platform, or more. Any feature similar to a Web2 Saas product can be accessed using NFTs. 

As brands begin to witness the product potential that NFTs represent, we will see the future of token utility shift away from FTs. It will take many things to get there, including the repurposing of some tools to accommodate NFTs and simplified products for mass adoption. Over time, I expect to see NFTs become the building blocks of Web3, and utility is a major component of this. 

If you’re interested in deepening the utility potential of your NFT collection or how to bring new utility to your token, just reach out! At my company Liteflow, we bring the flexibility of building web3 projects according to your needs while helping you own your revenue model for the internet’s next era.

Blockchain technology has made it possible for thousands of different fungible tokens (FTs) to be deployed by a diverse range of projects across industries. These tokens' concept, use, and value vary drastically from project to project. The full spectrum can be explored, from native tokens like Ethereum (used for payment, fees, and transaction verifications on the network), to meme tokens like Dogecoin that carry abstract cultural relevance. When examining this range of tokens, utility becomes a central focus for investors looking to get involved, but could this same utility be achieved using non-fungible tokens (NFTs)? 

Utility-specific tokens exist to help execute specific functions or deliver access to products or services, representing the majority of tokens created for initial coin offerings (ICOs). While these specific utility tokens help generate interest and value around a product, all fungible tokens can have utility baked in. Most serious projects with a dedicated token are exploring the possibilities enabled via their token. 

For most of these projects, NFTs offer the same or improved functionality without the need for a fungible token. In fact, NFTs have the potential to replace FTs in many instances, especially as advancements are made to blockchain technology. Some might not see this potential for NFTs, but once you recognize it, there’s no turning back. 

Let’s take a closer look…

To understand precisely how an NFT can be used to deliver utility in place of a FT, you must understand the difference. 

• Fungible Token - An interchangeable asset on a blockchain, such as an ERC-20, with each coin or token possessing the same value as every other coin of the same type. 

• Non-Fungible Token - An asset on a blockchain, such as an ERC-721, featuring unique identification codes and metadata, distinguishing it from all other tokens.

The current ecosystem and state of technology bring out a more stark contrast between these two assets, as storage and network processing makes it difficult for NFTs to overtake FTs in all utility. I believe this will change over time as we begin to see that NFTs can become as granular or more granular than FTs. 

NFTs can possess more detail than FTs due to properties added by the creator, more traceability due to the unique identifier associated with each asset, and an ability to represent both a balance or a singularly identifiable asset. This combination makes NFTs a great “access pass” for products with features, allowing projects with specific product plans to incorporate NFTs as access verification (something I’ll explore a bit later).

The current understanding is that FTs are a necessity when deeper utility is needed, but that is changing as more becomes possible with blockchain. NFTs aren’t going to replace Ethereum’s use of ETH to maintain the network or DEXs like Uniswap that use their native token UNI to facilitate all platform processes and impact governance any time soon. But, for most projects, this level of utility is not needed, and NFTs possess more than enough power to deliver utility effectively.

We’re still just scratching the surface of what both fungible and non-fungible tokens are capable of. Where we’re at now is far different from where we’re going, meaning NFT utility will only deepen over time. Currently, NFTs present the best solution for offerings that are based on yes/no answers. 

For utility that requires an account balance (i.e., 500 tokens in the wallet to access a feature), FTs currently make more sense. However, holding a balance of NFTs is certainly possible, as users can collect several tokens and easily verify ownership of each asset. Even using NFTs to quantify a balance shifts the focus from the total number to the unique individual assets. 

Despite the potential here, I want to focus on the current power of NFTs as a replacement for FT utility. If a user can access a product, feature, service, or can’t, then NFTs are more effective than FTs. These binary offerings are some of the most commonly utilized among Web3 companies. Here are just a few examples of how NFTs can be used to deliver access…

• Visualizing Content: Permit NFT hodlers to access exclusive gated content while engaging with your brand or community in a more substantial way. Perhaps you are releasing weekly podcasts or providing educational resources for blockchain enthusiasts. No matter the content, NFTs enable access for verifiable hodlers. 

• Applying Discounts: This utility allows hodlers to receive product or service discounts, similar to a coupon code. Discounts can be enabled as soon as an NFT is verified in a user’s wallet. There is some potential for granularity here depending on the NFT’s traits or the number of NFTs a user holds.

• Dashboard Access: NFTs are a great way to grant access to a dedicated dashboard or platform by verifying the NFTs held in a user’s wallet. This functionality doesn’t need to be developed from the launch of an NFT collection, as dApps can be developed after the collection launch to use the initial NFTs as an access pass.

• Product & Service Subscriptions: Subscription NFTs are being utilized to enable products and services provided by Web3 companies. The NFT is purchased or obtained by the user, who then pays a recurring fee to maintain access to the subscription. This could be access to a discord channel or NFT infrastructure like we provide at Liteflow.

A misunderstanding still exists around the power and potential of NFTs, as new projects believe they need a fungible token to assist with utility delivery. I see a future where NFTs are seamlessly applied to all of our content and online engagement. Saas products and virtual experiences will be reimagined using NFT infrastructure without the need for some fungible tokens.  

This utility potential highlights how NFTs are a product and a digital asset that can be applied to Web3 experiences. A significant majority of blockchain transactions are already carried out for products and not the trading of digital currencies. NFTs are already dynamic tools that enable access to a feature, product, piece of content, platform, or more. Any feature similar to a Web2 Saas product can be accessed using NFTs. 

As brands begin to witness the product potential that NFTs represent, we will see the future of token utility shift away from FTs. It will take many things to get there, including the repurposing of some tools to accommodate NFTs and simplified products for mass adoption. Over time, I expect to see NFTs become the building blocks of Web3, and utility is a major component of this. 

If you’re interested in deepening the utility potential of your NFT collection or how to bring new utility to your token, just reach out! At my company Liteflow, we bring the flexibility of building web3 projects according to your needs while helping you own your revenue model for the internet’s next era.