How to Add Utility to an NFT: Practical Tips

What are NFTs and What Is Their Potential?

NFTs emerged not so long ago, around 2012-2013, and were initially issued on the Bitcoin blockchain. NFTs are digital tokens whose main utility is to prove the ownership of any asset, thus their appellation Non-Fungible-Token, meaning that every NFT is unique and identifiable. Art and utility NFTs grew fast in popularity during 2021, generating a whopping $2 billion in the first quarter only and attaining a peak in popularity at the beginning of 2022. The hype didn’t last though, and the amount of interest NFTs initially had then slowly faded away. That’s mainly so because a large portion of them was created without adding utility, diminishing those NFTs’ usefulness in the long term.

NFT utility means real-life use cases and benefits that owning an NFT may procure you. The more there are, the more holding onto this NFT makes sense, giving it long-term value. To give you a concrete example, imagine you just bought a painting whose only intrinsic value is decorative. All you can do with it is either appreciate its aesthetics while hanging on your wall or sell it. But instead of this, the gallery from where you bought it allowed you to expose it in future art exhibitions and earn money from lending it. The gallery just created a utility for your painting, and the same pattern can be followed for NFTs.

NFTs’ potential is enormous and they can easily be used in many ways in our daily lives. One example of how NFTs can benefit us is ticketing, where NFT uniqueness and identifiability can avoid many problems concerning counterfeiting, thanks to an NFT being linked to its owner. To push this idea further, the NFT ticket can be used to purchase merchandise on-site, which significantly lowers operating costs, knowing that the artist can sell its products with no middlemen involved.

Another interesting use for any object that has been transformed into an NFT is using it as financial collateral to take out a loan. This allows the owner to use the NFT money value without selling the NFT, but only if he doesn’t default on his loan.

Why Is It Important to Add Utility to Your NFT?

Utility for an NFT completely changes the game, as it offers benefits for owning an NFT, and so increases the demand for it and thus its price. One of the best NFT utility ideas we saw when doing research is the utility the Bored Ape Yacht Club gave to their NFTs, where the token itself doubles as your membership to their club, allowing you to participate in many exclusive organized events, meet the founders and get to know other Bored Ape NFT holders. There is also another category of NFTs, called utility NFTs, which are completely designed around the utility they offer. One example is “Cocky”, whose NFTs give you access to global music events.

NFT projects that didn’t add any particular utility or value to their NFT collections saw their price action rapidly decrease with time, as interest fades out because of fierce competition. For your NFT project to be successful, thoroughly thinking about how to add utility to your project is vital both in the short and the long term, thus allowing you to gather a user base for your project.

Your online community will then help you organically grow your project by sharing it with friends and may also be the first reason why people would want to own your NFT. The idea of having exclusive access to an event or club is interesting here, as people see this feature as valuable, especially if the project gains in popularity — something that you might want to keep in mind while working on your project.

Some Practical Tips for Adding Utility So You Can Get Inspired

The NFT world is huge and has specialized decentralized marketplaces for you to buy and sell NFTs, and to do so effectively, you better create NFTs with utility. Utility NFTs take various forms, such as community NFTs, fantasy sports NFTs, gambling NFTs or social NFTs, depending on where and how the NFT will be used. The image above shows all the different types of utility NFTs.

So now, let us give you a few examples of how to add utility to an NFT collection and potentially make a difference. You first need to consider how important it is to differentiate yourself from the competition. New NFT projects flood the market every day; many are just a quick way for their creators to make money, and many others are intended to last but do not succeed. You need to build utilities for your NFT and to do so, here are some practical ways and tips to get inspired from:

Exclusive Membership NFTs

  • Exclusive membership to a club is a great way to involve your customers. People like to be part of bigger things, giving them a feeling of belonging.


  • The most common way to give utility is to include free merchandise, as it is appealing to have a physical product that complements its digital counterpart.

Providing services

  • Another popular way to add utility to NFTs is by providing a service to your NFT holders. The service you provide can be anything relevant to your company or organization and will help you build a better relationship with your customers.

Voting rights

  • You can also involve your community in the project you are building. This can be done in many ways, such as giving voting rights that will allow your community to steer your project with you.

In-game NFTs

  • In case your project is a metaverse or a video game on the blockchain, providing in-game NFTs is a great way to let your community have a unique character they can use to attend metaverse events, or benefit from unique characteristics in case it’s a video game. You can also further incentivize people to participate in your digital events by offering digital collectibles.

Crypto and Airdrops

  • To help yourself while selling your NFTs, you can develop an elaborate business strategy in order to involve your community to the maximum. To do so, you can create a cryptocurrency and airdrop some of it to your NFT holders, while of course thinking about other use cases for both your NFT collections and the associated cryptocurrency.

Whitelist Opportunities

  • Finally, you can provide whitelist opportunities. This means giving early access to your future projects to current users, further strengthening your relationship with loyal customers.
How to Differentiate Yourself from the Competition While Adding Utility

Creating NFTs and adding utility to them is not the only thing that will differentiate you from the competition. Considering how you will brand your project is an important aspect for your NFT collection to stand out. Branding is an important concept in marketing and stands for the process of creating a distinct identity for a business in the mind of the target audience.

To give you a well-known example, what does a bitten apple makes you think of? Obviously, Apple! The idea here is simple but may be complex to apply. Think of branding as the blueprint for how you want the world to see your project. You can follow these simplified steps, but don’t forget to research further about how branding is done.

  1. Do some competition and target audience research;
  2. Decide what is the focus of your project and its personality;
  3. Choose an adequate name for your project;
  4. Create a slogan;
  5. Choose your project’s aesthetic (colors and font);
  6. Create a logo for your project;
  7. Apply your branding throughout all the layers of your project;
  8. Build a community.

Now that you have an idea of the different layers that your NFT collection should have, you are ready to experiment with various designs and utilities to make your project really stand out, while focusing on being easily recognizable by your online community.

Author: Mack LahrenMack is extremely passionate about trading and believes that it is one of the most challenging and rewarding fields out there. He loves the thrill of making split-second decisions that can result in huge profits or losses. Mack knows that success in this industry requires hard work, discipline, and risk-taking, but it's all worth it when he sees those profits rolling in.
Posted in NFT