Newsletter  #8 - Non Fungible Tokens

Newsletter #8 - Non Fungible Tokens


NFTs, which have become an investment for some and a collection tool for others, are simply immutable, unique tokens. Art collection, investment vehicle, being viral... People buy NFTs for different reasons. NFTs can also be shaped by different goals and perspectives, they can also be positioned as a means to an end. Let's examine the various projects created with this perspective.

What is NFT ?


On Wikipedia, NFT (non-fungible token) is defined as a unit of data stored on a digital ledger called a blockchain, which confirms that a digital asset is unique and therefore not interchangeable. Take any blockchain platform, NFT, which resides on that platform, is a singular virtual token. The blockchain mathematically guarantees that the token cannot be made of the same and will never disappear from the blockchain. The unique identity and ownership of an NFT can therefore be verified with the blockchain ledger. In this aspect, it stands apart from fungible tokens and crypto currencies. There are millions of crypto currencies and fungible tokens and each of them are identical to each other.

NFT data units can be associated with visual or audio digital files For example, a digital copy of a produced artwork, along with its ownership rights, production date, and all desired information to be added to a blockchain, is recorded and locked. This unique data unit is put up for sale and, if it finds a buyer, it is exchanged with a currency recognized by the blockchain type used. The ownership of the chain is transferred to the person who purchases it. You can create an NFT yourself with its associated fee or purchase it from others.

References*: 1–2–3*

Utility NFTs

When discussing NFTs, we cannot overlook Utility NFTs that are directly equipped with applications for real-world use. "Utility NFTs" are based on access to exclusive benefits, special opportunities for real-world experiences, or closed premium content, offering continuous membership advantages. These digital assets go beyond the average smart contract token and provide benefits such as convertible rewards, memberships, access to events, and passive income opportunities—a type of "advantageous NFT." Utility NFT assets offer flexibility to users and creators. Projects can be supported by smart contracts, eliminating the need for a third party.

Utility NFT applications can be seen in various fields. Including the gaming world, fashion, and sports... For example, the racing game World of Freight, which has a collection of 10,000 NFTs, aims to create Supplain, the first NFT-supported supply chain infrastructure and trade finance protocol. All NFTs, including land, water, air, and even space travel vehicles, can be used to upgrade and customize vehicles within the game. Another example is LinksDao. LinksDao is a decentralized organization that aims to create a crypto-based golf club. This club can only be accessed through LinksDAO NFT holders. And one of these names is NBA star Steph Curry!

References: 1–2–3

NFTs in Social Responsibility and Impact Creation

Beyond being an internet phenomenon, NFTs can play a role in solving complex problems. Emerging technologies such as NFT; It can enable to develop different solutions while addressing social and environmental problems in various fields such as youth, climate change and humanitarian aid. Through NFTs, organizations, donors and communities can be empowered.

Recent developments such as crypto philantrophy, NFTs focused on social and environmental impact, the growth of KlimaDAO and the spread of the decentralized science (DeSci) movement and the delivery of aid via crypto to those affected by the war in Ukraine have completely transformed impact and benefit oriented work. Beeing Hope NFT and Buy My Cancer projects are some of the projects that might be presented as examples. The NFT project Beeing Hope NFT, which was realized with the support of 28 artists, was created for the benefit of the bee population damaged by the forest fires in the Mediterranean region of Turkiye in recent years. The Buy My Cancer project is presented as an NFT that enables the images of cancer patients' cells to be turned into NFT and sold, and the proceeds to be used for the treatment of the patient. There's also a marketplace for impact based NFTs, called Doingud. A minimum of 5% revenue per sale for each purchase made on the platform is allocated to a predetermined social impact organization selected by the creator.

Investments in these technologies and the surrounding entrepreneurial ecosystem have been revived by the potential of Web3 to solve our world's problems. In line with this potential, UNICEF Venture Fund has created a program focused on making equity-free crypto currency investments in non-profit technology startups to provide early-stage seed funding and mentorship. The ReFi movement has also demonstrated that Web3, with its impact on finance and social issues, could be another way to solve global problems.

Additionally, NFTs have facilitated the formation of communities based on solidarity among NFT owners. A strong example of such a community is "Women Rise," led by Maliha Abidi who was born in Pakistan. This project supports women artists, activists, programmers, and scientists interested in blockchain technology, with the aim of increasing women's participation in the crypto space.

As an example from Turkiye in the field of education, we can mention the "Girls Enlightening Lives" NFT Project. NFT designs that showcase the strength of women in industries traditionally dominated by men, such as electrical work, HVAC systems, plumbing, cartography, land registration, carpentry, and welding, not only promote gender equality but also generate income through the sale of NFT collections. The proceeds are then used to support the education and training of female students in vocational high schools. The Kite Project connects students with NFT platforms and auctions to support them in achieving their dreams.

References: 1–2–3

Why Are NFTs Being Purchased?


Social media and related tools help create elements that increase in value over time. A shared excitement about a topic or conversation is shared among individuals. A conversation can create a change of value, and these created values can be transformed into larger formations by transferring them to communities. NFTs are also a conversational currency.

The fact that NFT has not fallen off the agenda in the recent period is due to its success in keeping this curiosity element at the highest level. Such a curious value increases the prestige of the person and the interest he gathers on it by enabling the owner to be talked about. NFT owners can also turn to this area to increase their awareness and talk in the virtual and real world. This prestige pioneers the people to be invited to virtual and physical experiences.

Social media and related tools help create elements that increase in value over time. A shared excitement about a topic or conversation is shared among individuals. A conversation can create a change of value, and these created values can be transformed into larger formations by transferring them to communities. NFTs are also a conversational currency.

Well, can't NFTs be owned by taking a screenshot instead of buying them? Here it is necessary to return to the definition of NFT. The fact that the commodities produced have a unique code on the blockchain turns it into a special product. The point here is to be the owner of the original commodity. For people who seek authentic value, the uniqueness of NFTs makes them want to buy them.

When we say original, we should also emphasize that there is not just one NFT, there can be thirty copies. Still, these NFTs are attracting attention with their limited number.

This fact of ownership, which may be a sign of inclusion in a community for some and status for others, pushes people to become the owners of the original commodity. Another approximating perspective is that NFT contains commodities that can form collections. Especially in the field of art, the blockchain's trust in works of art attracts collectors to NFTs and also providing accessibility between art and the individual. Thanks to its accessibility, the buyer who is looking for an original work of art, who wants to make a collection; has started to prefer NFTs.

Accessibility to valuable artworks has long been subject to the control of intermediaries, creating a divide between artists and buyers who may not wish to engage with traditional intermediaries such as auction houses or galleries. However, the advent of NFTs is expanding opportunities for securing sales for their work, allowing artists to sell directly to the buyer market.

NFTs require minimal to no human intervention in sales due to their embedded smart contracts that enable artists and buyers to establish and perform the terms of sale and potential resale of digital artworks by themselves. Some commentators have defended this phenomenon as the "democratization of art." This phenomenon is seen not only as a passage from lack of transparency in art sales transactions to complete transparency, but also as the free trade of art in the open market.

References: 1–23

ReFi Türkiye Podcast 🎧️

🌱 Within the scope of ReFi Turkiye program, our podcast series, which we made with the pioneers who think and build on Web3, are online. Stay tuned for new episodes!

You can listen to episodes about the intersection of web technologies and the impact ecosystem on Spotify, Apple Podcasts, Soundcloud and Spreaker. Also, you can get NFTs that we've made specifically for the podcast episodes with the code you'll hear in episodes! 👀

In this episode of ReFi Turkiye Podcast series, our guest is Company Partner of KPMG Turkiye, Data, Analytics and Digital Leader, Technology Sector Leader, KPMG Lighthouse Turkiye Coordinator Gökhan Mataracı. Mataracı talks about the philosophy of Society 5.0 and discusses topics like digitalization processes, the positive impact of technology on society, and how technology can be designed to create meaningful experiences. He presents examples related to concepts such as net zero, Sustainable Development Tools, and the metaverse.

Film Suggestion

24 Zero Contact, the world's first NFT film starring Anthony Hopkins, was released on the Vuele platform on September 24, 2021. Produced in 17 different countries during the pandemic, the production focuses on the dangers of high technology in a virtual world. Promotional texts for the film state, "The NFT of this film also includes the world's first interactive sophisticated puzzle. This interactive puzzle is updated in real-time as it is solved, ultimately pointing to a hidden reward in the Zero Contact universe. In other words, it's like a digital treasure hunt!" "And for a project created and managed virtually via Zoom, there couldn't be a more suitable name for the film: Zero Contact!"

References: 1–2