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Last Updated on 1 month by Web3 Studio

You’ve probably heard people throw the word “web3” around. And maybe you have seen jobs related to NFT creation on many top web3 job boards. And of course, you’ve seen those monkey images or NFTs selling for thousands, or even millions, of dollars. So, it’s natural for you to wonder what exactly the correlation is between NFT web3.

Well, don’t worry. Today’s guide will examine Web3 NFT so that you can navigate both ecosystems with confidence and knowledge.

First things first…

NFTs and Web 3: The Basics

As mentioned earlier, Web3 and NFT are two terms that have become increasingly popular. But what do they mean, and how are they related?

NFTs, or non-fungible tokens, are unique digital assets that can represent anything from art and music to data and in-game items. Unlike fungible tokens, such as cryptocurrencies, NFTs cannot be exchanged for another of the same kind. Each NFT has its own digital file, digital identity and history, which are stored on a blockchain network.

Speaking of blockchain technology, Matthew compares blockchain technology to a vault that allows data to be distributed and verified across a network of computers without the need for a central authority. Blockchain development enables transactions to be transparent, secure, and immutable. This, essentially, uses smart contracts. These are self-executing programs that run on a blockchain and can enforce rules and conditions for transactions. This means alongside blockchain development, smart contract audit services become important when you’re launching a project b

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Web3, or Web 3.0, is a decentralized version of the internet that uses blockchain and smart contracts to create a more open, trustless, and user-centric web. Web3 aims to give users more control over their own data and identity, as well as more opportunities to create and participate in the digital economy.

NFT and Web3 are closely connected, as NFTs enable users to own and monetize their digital assets via Web3 marketing, as well as to express their creativity and individuality. NFTs also create new forms of value and interaction in the Web3 ecosystem. This is just a glimpse of what NFTs bring to the table.

Now, let’s take a closer look.

Role of NFTs in Web3

NFT digital artwork plays a key role in Web3, as they enable users to own and monetize their digital assets, as well as to express their creativity and individuality. NFTs can also create new forms of value and interaction in the Web3 ecosystem. Here are some things NFTs bring to the Web3 table:

  • NFT Ownership: NFTs allow users to prove their ownership of digital assets through NFT verification systems like a crypto wallet, which is software that stores the private keys that access the blockchain. Users can also transfer or sell their NFTs to others without intermediaries or fees.
  • Scarcity: NFT Web3.0 is limited in supply and cannot be duplicated or copied. This creates a sense of rarity and exclusivity for digital assets, which can increase their value and demand.
  • Utility: NFTs can have various functions and uses, depending on the platform or protocol that supports them. For example, some NFTs can grant access to exclusive content or services or unlock features or rewards in games or applications.
  • Governance and participation: NFTs can enable users to participate in the governance and decision-making processes of Web3 platforms and protocols, such as voting on proposals, funding projects, or influencing policies. This can increase user empowerment and influence, as well as foster more collaboration and innovation among users and communities. For example, some decentralized autonomous organizations (DAOs) use NFTs to represent the ownership and voting rights of their members.

So, with all these vital roles, what exactly are the benefits that come with NFTs in Web3?

Well, the first thing is that it allows the creation of new markets and economics in this internet iteration. NFTs can enable users to create and trade digital assets and items on open and decentralized marketplaces, such as OpenSea and Rarible. This can generate new sources of income and wealth for users and creators, as well as foster a more inclusive and diverse digital economy.

And finally, NFT digital art has a way of promoting innovation and creativity in Web 3. Essentially, they can enable users to create and showcase their original and unique digital works, such as art, music, and literature. Web3 PR can stimulate more innovation and creativity in the digital space, as well as inspire and educate others. You can see how BRX is intersecting NFTs with mental health, for example. Check out our case studies for instance.

As Elliot Leach, Art Director at Fracas Digital Web3 agency, loves to say:

The future of art will be written on the blockchain, and NFTs are the brushstrokes

Does this sound appealing to you?

Well, we can help you create a solid NFT project poised for explosive growth as well

By the way, you can as well count on our crypto marketing agency if you ever need to launch a crypto project.  

How Web3 Games Accommodate NFTs

One of the most popular and promising applications of NFTs in Web3 is gaming.

Web3 games like the Otherside game, are decentralized games that run on a blockchain network and use smart contracts to govern the game logic and rules. Web3 gaming can leverage NFTs to create more immersive and engaging gaming experiences for players. Some of the ways that Web3 games accommodate NFTs are:

  • Collectibles: A Web3 game can use NFTs to create digital collectibles that players can collect, trade, or sell on open markets. These collectibles can represent characters, items, weapons, skins, or cards and can have different attributes and rarities. For example, CryptoKitties is a Web3 game that allows players to breed and collect unique digital cats, each with its own NFT. If you’d love to achieve something like this, make sure you’re partnering with a full cycle Web 3.0 marketing agency
  • Assets: Web3 NFT games also adopt non-fungible tokens to create digital assets that players can own and use in the game. These assets can have various properties and effects, such as enhancing the performance or appearance of the player or the environment. For example, you can partner with an NFT game development company to create a game like Decentralan. This game allows players to create and explore a virtual world where they can own and customize their own land parcels, each with its own NFT.
  • Rewards: Web3 games can use NFTs to create digital rewards that players can earn or win by completing quests, challenges, or competitions in the game. These rewards can be valuable or rare and can motivate players to play more or better. For example, in the web3 game, Axie,  players can go to battles battle and nurture virtual creatures called Axies. Each Axie is represented by NFTs. Besides, players get to earn tokens or NFTs by winning battles or tournaments.

When you look at these roles, you’ll agree that what Quentin Desmet, Community Manager at Fracas Web3 company, says is forever valid:

From play-to-earn games to fractional ownership, NFTs are paving the way for a more inclusive and equitable digital economy where everyone has the opportunity to participate and thrive

Challenges and Limitations of NFTs in Web3

Despite the potential and popularity of NFTs in Web3, there are also some challenges and limitations that need to be addressed. Some of these are:

Cost

Creating or transferring non-fungible tokens on the NFTs blockchain network requires paying a fee in cryptocurrency or gas, which is the amount of computational power needed to process a transaction. These fees can be high or unpredictable, depending on network congestion and demand. This can make NFTs inaccessible or unaffordable for some users or creators to buy and browse NFT collections.

Environment

Creating or transferring an NFT on a blockchain network requires consuming a lot of energy and generating a lot of carbon emissions. This can have a negative impact on the environment and contribute to climate change. Some blockchain networks, such as Ethereum, are working on transitioning to a more energy-efficient consensus mechanism called proof-of-stake, which can reduce the environmental footprint of NFTs network.

Regulation

When you compare NFTs vs crypto in terms of regulation, there isn’t much difference. Till now, NFTs don’t have a clear or uniform legal status or regulation. So, there’s still no globally acceptable standard on how to create, transfer, enforce, or tax NFTs. With this, you should expect a certain level of risk for users and creators. Also, expect some ethical and social issues, including intellectual property rights, privacy, and censorship.

Scalability

NFTs rely on blockchain networks to operate and store data. However, some blockchain networks, such as Ethereum, suffer from scalability issues, such as low throughput, high latency, and network congestion. This can affect the performance and user experience of NFTs, as well as limit their potential applications and use cases.

Some solutions to address scalability issues include layer-2 scaling solutions, such as Polygon, which enhance the speed and efficiency of Ethereum transactions while reducing costs and environmental impact.

User experience

NFTs can offer a rich and diverse user experience, but they also require a high level of user involvement and responsibility. When creating and selling NFT assets, users need to manage their crypto wallets, private keys, and transactions, as well as understand the risks and benefits of NFTs.

This can be overwhelming and intimidating for some users, especially those who are new to the Web3 space. To improve the user experience, some initiatives have been launched, such as a user-friendly Web3 NFT website, educational resources, and community support. Some top NFT marketing companies can take a step further and help you navigate these issues. 

The Future of NFTs in Web3

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Despite these challenges, Web3 NFTs have a bright future, as more people become aware of their benefits and potential applications and more platforms and protocols emerge to support them. NFTs can also evolve and innovate as new features and functionalities are added to them. To get the best results, make sure you’re partnering with top NFT marketing agencies

In the words of Jason St-Paul, Lead Artist at Fracas Digital:

The development of NFTs is still in its early stages, but the possibilities are endless. We are just beginning to see the tip of the iceberg when it comes to the potential impact of NFTs on our lives

Some of the possible trends and developments for NFTs in Web3 are:

Interoperability

NFTs can become more interoperable, meaning that they can be used across different platforms or protocols without losing their identity or functionality. This can create more opportunities and value for users and creators, as they can access and utilize their NFTs in various ways and contexts.

Composability

NFTs have the potential to be more composable. This simply means that they can be combined or integrated with other NFTs or smart contracts to create new or enhanced digital assets or experiences. This can create more complexity and diversity for NFTs, as they can have multiple layers and dimensions. But with an NFT web design agency, it’s easier to navigate. 

Community

NFT, Web3, gaming, blockchain, and DeFi have always been deeply rooted in community, usually on social media networks. But expect this to be more intense. Essentially, the NFT PR of these assets is expected to foster more collaboration and participation among users and creators, as well as more social and cultural impact. This can create more meaning and purpose for NFTs, as they can represent more than just digital assets but also identities, values, and stories.

If you’re looking for a trusted partner to help you navigate Web3, we are here to help

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