Are NFTs Over? Exploring NFT Use Cases

What Is an NFT? Key Features Explained

An NFT (Non-Fungible Token) is a groundbreaking technology that provides a unique certificate for digital assets. While traditional digital data could be easily copied or altered, NFTs allow for clear proof of ownership. Because this information is recorded on the blockchain, NFT ownership is securely verified and cannot be tampered with.

For example, issuing an NFT for digital artwork proves its authenticity. NFTs can also be issued for game items or tickets, enhancing their rarity and value. The potential uses for NFTs go well beyond investment—they're expected to find applications across a broad range of industries.

Some of the primary use cases for NFTs include:

• NFT Certificates of Issuance: Conventional certificates were vulnerable to forgery and manipulation, but NFTs offer safer, more reliable issuance. Blockchain technology transparently records issuance history, making third-party verification straightforward.

• NFT-Based Regional Tax Donations: NFT technology enables unique rewards such as digital art or virtual experiences for regional tax donation programs. Locally themed digital content brings new value compared to traditional physical gifts.

• NFT Crowdfunding: Creators can issue their work as NFTs and raise funds directly from fans. Supporters purchase NFTs to back projects and receive exclusive perks in return, fostering direct relationships between creators and their communities.

• NFT Gaming: In games powered by NFTs, players own in-game items and characters as NFTs, allowing them to trade, buy, or sell these digital assets. This gives in-game items real-world value and lets players earn through gameplay—a new frontier for game economies.

Although NFTs are still evolving, they are poised to play a significant role in real estate transactions and economic activity within the metaverse (virtual worlds). As the line between digital and physical worlds continues to blur, NFTs are emerging as a vital technology bridging both realms.

Are NFTs Actually “Dead”?

NFTs have become prominent as a way to prove ownership of digital assets like art and game items. Yet, there is persistent criticism that “NFTs are meaningless or obsolete.” To understand this debate, it's important to consider the historical changes and current state of the NFT market.

The Boom Has Faded Amid Worthless NFT Issuance—That’s a Reality

In the past few years—especially around 2021—many low-value NFTs were issued, and some suffered from poor liquidity, making them difficult to sell. This confusion in the early phase of NFT technology, along with malicious actors, contributed to the problem. As the market expanded rapidly, speculators flooded in, and many projects with little real substance emerged.

Now, however, the NFT boom has subsided and the market landscape has shifted. Weak projects are being eliminated, and the industry is steadily moving toward a healthier state where only those with genuine value persist.

Industry Perspectives

BeInCrypto reports that 96% of NFT projects have failed, with 43% of holders incurring losses. On average, NFT holders face a 44.5% loss, and the average NFT lifespan is just 1.14 years. Significantly, about one-third of projects have disappeared, marking a record-high failure rate.

While these stark statistics reveal the reality of the NFT market, they also point to its maturation. Low-quality projects are being weeded out, and investors are increasingly concentrating on those with genuine value.

OpenSea Co-Founder and CEO Devin Finzer highlights the potential of NFTs, especially in gaming and for NFTs backed by physical assets. He notes OpenSea’s commitment to expanding new use cases and emphasizes the importance of serving as a hub for all NFT types to attract the next wave of collectors.

“At OpenSea, new use cases are constantly emerging. Becoming the hub for every kind of NFT is critical for engaging the next wave of collectors,” says Finzer.

The platform supports NFTs for games and physical items, offering customizable collection pages. Finzer predicts the gaming industry will drive NFT adoption, emphasizing the need for seamless onboarding for gamers.

Not all companies view the future of NFTs negatively. According to a16z’s market forecast report, NFTs are expected to become digital brand assets and achieve mainstream adoption among enterprises and communities. This suggests NFTs are not a passing fad but a technology with lasting value.

Why NFTs Still Hold Value

NFTs retain value for three key reasons:

• Scarcity: NFTs use blockchain to prove unique ownership, giving digital assets scarcity akin to physical goods. Limited-edition NFTs maintain high value because of their rarity.

• Utility: NFTs serve diverse functions, such as in-game items and tickets. Functional NFTs generate ongoing demand, with use cases like event admission or access rights continuing to expand.

• Community: NFT projects often foster passionate communities, creating vibrant economic ecosystems. Connections among holders support project value, and strong communities tend to achieve long-term success.

Many Japanese companies are embracing NFTs. Beyond PFP projects (profile-picture NFTs), NFTs are being utilized for regional tax donations, crowdfunding, and more. Larger corporations and government agencies are expected to increase NFT adoption in the future.

Instead of fading away, NFT demand is likely to rise. NFTs are more than just a speculative bubble—they are a technology with the potential to deliver real societal value, and their application across different fields is set to expand. As the market matures, expect to see more practical, valuable NFT projects and a healthier market environment.

NFTs Are Thriving: Practical Applications

NFT Use Case #1: Community

NFTs serve as passes to communities built around shared interests and values. In Japan, many NFT projects focus on community-building and host active engagement.

For example, PFP projects like CryptoNinja and LLAC have cultivated enthusiastic communities. NFT holders interact on Discord and at offline events, with many projects enabling holders to participate in management and governance.

Owning an NFT provides key benefits:

• Networking: Connect with others in the same NFT project, forming new relationships that can fuel personal growth and business opportunities.

• Exclusive Information: Access to project updates and private information not available to the public, supporting better investment and deeper understanding.

• Idea Implementation: Leverage NFT IP to launch new projects or events, with community collaboration driving new value creation.

• Exclusive Perks: Enjoy benefits reserved for NFT holders, like rights to purchase limited-edition merchandise or invites to special events.

Community-driven NFT projects are attracting attention as innovative organizations where participants create value—not just investment targets.

NFT Use Case #2: Regional Tax Donations

The use of NFTs in regional tax donation programs is emerging as an innovative approach, enabling regions to showcase unique appeal and foster interactive engagement with supporters.

In NFT-based tax donation schemes, donors receive NFTs as rewards, such as digital art or region-only items. Unlike physical gifts, NFTs require no storage or shipping, making them an eco-friendly choice.

Municipalities across Japan are adopting NFT-based tax donations. Notable examples include:

• Imabari City, Ehime: Offers NFT art inspired by Imabari towels, merging local industry and digital technology.

• Izumisano City, Osaka: Issues NFT art based on its mascot “Izumisano Daruma,” successfully attracting new fans through NFT-ization of local characters.

• Koka City, Shiga: Provides ninja-themed NFT art, representing regional history in digital form and attracting broad attention.

These examples highlight NFTs as new tools for regional development, appealing to digital-native youth and opening new possibilities for tax donation programs.

NFT Use Case #3: Crowdfunding

NFT-powered crowdfunding lets creators issue their works as NFTs and raise funds directly from fans, who receive exclusive digital content or perks in return.

This system offers advantages over traditional crowdfunding: NFTs can be traded on secondary markets, giving supporters a chance to recoup investments; blockchain ensures transparent fund flow, boosting project reliability.

Though still in its early stages, NFT crowdfunding is being adopted in a range of projects. Key examples include:

• CNP: One of Japan’s largest NFT collections, CNP used NFT crowdfunding to produce an anime with strong community support—enabling projects that would be difficult to fund by traditional means.

• LLAC: Raised over ¥10 million for LLAC House construction, allowing NFT holders to participate in a real-world building project—a pioneering blend of digital and physical engagement.

NFT crowdfunding is just beginning, but its potential for growth is high. It enables more direct creator–fan relationships and supports the development of new economic communities.

NFT Use Case #4: NFT Gaming

NFT games leverage blockchain to issue items and characters as NFTs, allowing players to use them in-game or trade with others. Players can truly own assets gained in-game as real value.

Major publishers like Epic Games are entering the NFT gaming market—for example, releasing Illuvium, an NFT/blockchain game built on ImmutableX. This signals that NFT gaming is a vital force shaping the future of the industry.

NFT games are characterized by:

• Play-to-Earn: Players can earn NFTs or crypto assets with real value by playing, turning gaming into a source of income.

• True Ownership: Unlike traditional games, where assets belong to publishers, NFT games grant players genuine ownership, with freedom to trade or use items across games.

• Interoperability: Some NFT games allow NFTs to be used across multiple games, supporting economic activity throughout the metaverse.

Clear in-game use cases drive natural demand and help secure stable liquidity. NFT gaming is forging new entertainment experiences by merging blockchain and gaming.

Key Considerations When Buying NFTs

Consideration #1: Define Your Purpose

Before purchasing an NFT, it's crucial to clarify your purpose—whether as a collectible, an investment for future appreciation, or for use in games or art. Buying without a clear objective can lead to losses through market volatility.

NFTs typically have lower liquidity than other financial instruments, so finding buyers for quick sales can be difficult. Research the NFT’s use case and market value trends carefully before making a decision.

Recommended checks include:

• Project Reliability: Check the development team's track record and the project's roadmap. Teams with proven success offer greater reliability.

• Community Activity: Projects with active communities are more likely to succeed long-term. Review activity in Discord or Twitter.

• Practicality: NFTs with practical functions, not just as collectibles, tend to enjoy sustained demand.

Consideration #2: Invest Only Surplus Funds

NFTs are highly volatile assets. Many low-value NFTs have been issued in recent years, some with poor liquidity and limited resale prospects. The situation is improving, but risks remain high.

Compared to stocks and Bitcoin, NFTs are even riskier. The NFT market is still developing, and regulatory frameworks are incomplete, exposing investors to unforeseen risks.

Invest only surplus funds—money you don’t need for daily living. Key financial management strategies include:

• Secure Living Expenses: Ensure daily needs are met before allocating surplus funds to NFTs.

• Diversify Investments: Avoid putting all resources into a single NFT project. Diversify to mitigate risk.

• Set Loss Limits: Decide on acceptable loss levels and establish clear stop-loss points to avoid emotional decisions.

• Long-Term Perspective: Don’t obsess over short-term price swings; assess NFT value from a long-term standpoint. Truly valuable projects will prove themselves over time.

NFT investing offers the potential for high returns, but also carries high risk. Careful judgment and prudent financial management are essential for sustainable NFT investment.

Conclusion: NFTs Are Not Dead—Expect Growing Utility

This article provided a detailed analysis of whether NFTs are “dead.” NFTs enable proof of ownership for digital assets, offering unique verification not possible with traditional digital assets. Blockchain technology ensures ownership records cannot be altered.

In the past, some NFTs lacked substance and liquidity, making resale difficult. Today, only NFTs with genuine value remain, forming strong communities. After market shakeout, a healthier, more sustainable ecosystem is emerging.

Nevertheless, NFTs remain highly volatile compared to other investment assets. For investors, it's essential to clarify intended use and evaluate projects thoroughly by utility, community strength, and developer reliability.

Though still evolving, NFTs are likely to see broadening use cases. Applications in community-building, regional tax donations, crowdfunding, and gaming are expanding, and new uses are expected to emerge.

Major enterprises and government agencies are increasing NFT adoption. As the technology matures, broader societal implementation will follow. NFTs are poised to play a key role in digital value exchange, beyond speculative asset status.

The NFT market has experienced booms and busts and is now entering a mature phase. Investors and creators entering now can participate in projects with genuine value within a healthy market. The future of NFTs is not “dead”—it’s entering a true growth stage.

FAQ

What Is an NFT? How Does It Differ from Cryptocurrency or Blockchain?

An NFT is a non-fungible digital asset representing unique ownership on the blockchain. Cryptocurrency is interchangeable and used for transferring value, while NFTs certify ownership of specific assets like art or game items.

Are NFTs Really Dead? What Is the Market Situation in 2024?

NFTs are not dead. Since 2024, the market has matured, eliminating speculative projects and supporting steady growth for practical NFTs. Use cases in gaming, metaverse, and digital asset management are expanding as the market develops healthily.

What Are Actual Use Cases for NFTs? Can You Give Specific Examples?

NFTs are used for in-game items, digital art, music, trading cards, event tickets, memberships, and real estate. Blockchain ensures proof of ownership, authenticity, and rarity.

What Are the Benefits and Risks of Buying NFTs?

Benefits include uniqueness, proof of ownership, and holding rare value. Risks include price drops, market volatility, high fees, and security issues.

Besides Digital Art, What Other Fields Use NFTs?

NFTs are used in gaming, sports, fashion, and music. Examples include game items and collectibles, digital cards for athletes, exclusive fashion items, and songs by artists—NFTs prove ownership and enable new value flows for various content.

Is NFT Investing Profitable? Are There Cases of Failure?

NFT investing has both profitable and unsuccessful cases. Some early buyers earned significant returns, but many investors have experienced losses. The market is highly volatile, so careful project selection is crucial.