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What Are Utility NFTs and How Do They Differ From NFTs? A Complete Guide

Utility NFTs go beyond digital collectables, granting holders special privileges, rights, intrinsic and direct value and other rewards they cannot have by having regular NFTs.

Claudia Fischer



utility nfts guide article

Utility NFTs: An Overview

A utility NFT is like an NFT but not a regular and typical NFT as it works differently. A utility NFT has some specific features which give privileges to the buyer to have direct intrinsic and direct value with full control. An NFT can be regarded as a utility NFT if it has these specific features;

  • Grants complete access in a blockchain-based game over exclusive items like skins, levels, and characters
  • Unlock the premium content, and communities  or give rewards on the decentralized-based social network
  • Offers educational stuff and gives incentives or appreciation in the form of certification on learning programs based on blockchain technology

A utility NFT can also have its intrinsic value based on its popularity, quality or rarity. With a utility NFT, the owner can reserve his seat in the top place in a concert compared to other regular seats.

Also Read: What are NFTs? All You Need To Know

Utility NFTs work in the same way as the regular NFTs work. The difference lies in its usage and functions. Utility NFTs are cryptographically represented as the unique kind of digital assets available on the immutable and transparent blockchain technology.

Types of Utility NFTs

Utility NFTs enhance the experience of the person holding them. The world ‘utility’ makes an NFT special and makes it more worthwhile due to the associated features like intrinsic and direct value and sole ownership. Utility NFTs can be used in various ways and a few of their types are given below;

types of nfts

Gaming Utility NFTs

Gaming Utility NFTs can give players special stuff in games. In a Metaverse game, if you finish a quest, you might get an NFT ticket. This ticket can unlock new game stuff or let you join a virtual event.

In Web3 games, NFT holders might get discounts on real things. And, game tokens can let players help make game decisions.

Art Utility NFTs

Artists often give tokens to NFT owners. If you keep your NFT, you might get more rewards over time. Sometimes, owning an NFT can also let you buy new ones from the same artist.

Artists use NFTs as tickets for live events. For instance, Bored Ape held a big party in June 2022, and all Bored Ape NFT holders were invited and could bring a guest.

Music Utility NFTs

Music utility NFTs give holders cool perks like meet and greets or concert access. For example, Deadmau5 and Portugal the Man bundled NFTs with concert tickets. They can also reward holders with a share of song earnings, as seen with Royal NFTs by 3LAU and JD Ross.

Real State Utility NFTs

Utility NFTs allow buying bits of real estate, making it easier to invest without owning a whole property. The NFT’s worth changes with the property’s value. They can also stand for virtual land in the Metaverse.

Also Read: What Are Vampire Attacks and Their Role in Crypto? A Complete Guide for the Beginners

Advantages of Utility NFTs

Traditional NFTs could only benefit the owner in the way that they owned NFTs and could sell them in a market place but now the time has changed and utility NFT owners can benefit themselves in multiple ways. A Utility NFT owner can;

  • Unlock the new revenue system and use it as a source of passive income
  • Digitally track provenance and ownership over a blockchain technology
  • Have better experience in the sense of safety and security
  • Have access to exclusive content like educational stuff related to the market to educate themselves
  • Be able to convert a regular NFT into a Utility NFT

How to Add Utility to NFTs?

Utility NFT has modified the concept of regular NFT which is commonly used as a digital asset. On the other hand Utility NFTs can be used as real-world assets and give the owner a sense of secure ownership. A regular NFT can be converted into Utility NFT in three major steps;

  • Make your NFT redeemable for service, digital or physical goods which can be redeemed for physical things like concert tickets or any other merchandisable item
  •  Launch and link your NFT to the real world which enables users to have access to any exclusive event, premium content or private community
  • Make sure that your newly created Utility NFT is usable in the Metaverse as well which means that users can use Utility NFTs to bus digital assets or e-games


Even if you’re not a big NFT collector, having a utility NFT can be worthwhile. They come with perks like earning money or special access to events and items. Utility NFTs keep gaining new uses, making them more valuable. This utility adds to their worth, and creators can add more perks in the future. In the world of Web 3.0, utility NFTs will become even more important for creators and owners. If you’re thinking of investing in NFTs, remember that utility NFTs offer more than collectables.

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