More than just JPEGs - Five game changing social impact use cases of NFTs
The last couple of years have been filled with highs and lows for NFTs. On the one hand, we’ve seen digital art auctions selling for staggering amounts, with big name celebrities and brands getting onboard. On the other hand, we’ve seen several scams, rug pulls, and a large collapse in the overall valuation of the NFT market.
However, beyond the highs and lows lies a profound potential for positive social change. From ensuring transparent philanthropy to reimagining community engagement, NFTs are proving to be more than just JPEGs - they're powerful tools capable of driving real world social impact. In this article, we'll explore five game-changing social impact use cases of NFTs that showcase their transformative potential in sectors far removed from art and collectibles.
What are NFTs?
NFTs, or non-fungible tokens, are unique digital assets verified using blockchain technology. Unlike cryptocurrencies such as Bitcoin or Ethereum, where each unit is identical (or "fungible") and holds the same value, NFTs are distinct and cannot be exchanged on a one-for-one basis. This uniqueness and indivisibility make them especially suitable for representing one-of-a-kind items like digital art, collectibles, and virtual real estate. As each NFT is stored on a decentralized ledger, it ensures provenance, ownership, and authenticity of the digital item without the need for intermediaries.
Community Building
In the digital age, the very essence of community is evolving, and NFTs can play a pivotal role in this transformation. At their core, NFTs provide a unique sense of ownership and belonging in the virtual space. By minting specific tokens that represent shared values, stories, or experiences, communities can cement their collective identity in the decentralized digital realm. These tokens become symbols of membership, akin to a badge of honor or a tangible representation of one's allegiance to a particular group, idea, or cause.
Moreover, NFTs empower individuals within communities by granting them genuine agency. Whether it's artists in a collective minting their pieces to ensure proper attribution and compensation, or fans in a decentralized autonomous organization (DAO) voting on the direction of a project through NFT-based governance systems, the tokens facilitate direct participation and collaboration. This decentralized, bottom-up approach to community building fosters a deeper sense of connection among members, allowing for more organic growth and evolution based on collective aspirations and goals. Through NFTs, communities can operate with greater autonomy, inclusivity, and engagement, redefining the way we perceive belonging in the digital era.
One example of a project using NFTs to facilitate community building is Treegens, which aims to be the most transparent and rewarding tree planting project in the world. They are creating the first “dynamic semi-soulbound token (DSST), an NFT that changes and “levels up” as community members plant trees and fund tree planting efforts. They have built a dynamic community of Treegens all over the world who are dedicated to regeneration through tree planting, and even have the goal of beating the world record for the most trees planted in 24 hours, which currently stands at 355M trees by Ethiopia.
If you’re interested in the community building potential of NFTs, we recommend tuning in to one of the weekly Twitter/X spaces offered by NFTs for Social Good!
Impact Monitoring
The challenge of monitoring and evaluating real-world impact has perennially been a complex one, often clouded by layers of bureaucracy and inefficiencies, and a lack of transparency. NFTs have the potential to offer a groundbreaking solution to this conundrum. By tokenizing projects or specific actions on a blockchain, every transaction, milestone, or update can be immutably and transparently recorded. This means that every stakeholder, from donors to beneficiaries, can access a clear, unalterable history of how resources were allocated, used, and what outcomes they achieved.
Furthermore, the granularity of data that NFTs can offer goes beyond just financial transactions. Imagine an NFT representing a specific social project, such as building a school or planting a forest. As the project progresses, from groundbreaking to completion, each significant event can be timestamped onto the token. This provides a level of accountability previously unattainable, as donors can see, in real-time, how their contributions directly correlate with tangible results. This transparent and traceable approach not only instills greater trust in charitable initiatives but also allows for a more accurate and timely evaluation of impact, ensuring resources are always directed where they can achieve the greatest good.
A great example of an early-stage project that is using tokens to monitor and reward positive impact is Hypercerts, which aims to serve as “a single, open, shared, decentralized database for impact funding mechanisms.” In essence, impact projects can mint a hypercert, which represents a unique impact claim capturing information related to the scope of the project’s work and it’s corresponding impact. Contributors can then mint a fraction of the hypercert which is representative of their contribution. While each hypercert is not technically an NFT, and is in fact an ERC-1155 semi-fungible token, they still demonstrate the power of tokens, including NFTs, to play an important role in monitoring and rewarding impact efforts on-chain. Although the project is still in the early stages, hypercerts stand to be a game changer for monitoring and evaluation efforts by creating a consistent standard for tracking, evaluating, and rewarding impact efforts.
Check out our interview with Carl Cervone of Hypercerts on the Crypto Altruism to learn more about this groundbreaking work.
IP-NFTs
Intellectual Property Non-Fungible Tokens (IP-NFTs) are poised to revolutionize the scientific research landscape. Traditionally, scientific discoveries, data sets, and methodologies are protected through cumbersome patent processes or are stored behind paywalled journals, creating barriers to access and often slowing the pace of innovation. IP-NFTs can serve as an alternative, providing a secure and transparent mechanism for scientists to tokenize their findings. By doing so, they can ensure proper attribution and, if desired, compensation, while also offering a more open platform for sharing. This democratization of knowledge can foster collaborative efforts, where researchers across the globe can seamlessly build upon each other's work without the fear of intellectual property theft or infringement.
Additionally, IP-NFTs can bring about a new era of funding and investment in scientific research. Traditionally reliant on grants or institutional backing, researchers can now tokenize specific projects, allowing investors or interested parties to directly support and even hold a stake in groundbreaking studies or innovations. This direct link between scientists and supporters can expedite the R&D process, ensuring that vital research, especially in areas like medical science or environmental studies, receives the timely resources and attention it deserves. In essence, IP-NFTs hold the promise of a more interconnected, efficient, and open scientific community, where collaboration and progress are prioritized over bureaucratic red tape.
An example of a project using IP-NFTs to revolutionize scientific research is Molecule, which aims to “empower visionary patients, researchers, entrepreneurs and funders to unlock the full potential of science by enabling fast collaboration and knowledge-sharing aiming for a better future.” Through Molecule, researchers can mint their project as IP-NFTs, which can then be fractionalized into tokens and sold to raise funds for their project. These IP tokens give individuals a unique opportunity to contribute to research they are passionate about, while also giving them governance and economic rights over a portion of the research.
A GIANT leap for decentralized research was made today 🧬
— Paul Kohlhaas (@paulkhls) August 17, 2021
For the first time, real-world biopharma research and IP was transferred and funded on-chain as an NFT via @Molecule_to @Nevermined_io @vita_dao
A DAO now owns IP and funds biotech research at a leading lab... 👇
1/🧵
Philanthropy & Donor Engagement
The philanthropic landscape has traditionally been a straightforward one: benefactors give, and recipients receive, often with little interaction or feedback loops beyond periodic updates. NFTs, however, are set to disrupt this dynamic, introducing a transformative approach to donor engagement. With the capability to tokenize charitable projects or specific actions, NFTs can provide donors with a tangible digital asset representing their contribution. This not only creates a more personal connection between the donor and the cause but also offers an opportunity for the donation to appreciate in value, potentially turning philanthropy into a mutually beneficial endeavor. For instance, a donor might receive an NFT for supporting an art project, and as that project gains recognition, the token's value could rise, marrying charitable intent with potential return on investment.
At the same time, NFTs can unlock new opportunities for donor engagement. This could include “token-gated” access to special donor events or community chat rooms, just to name a few examples. Additionally, as highlighted above, NFTs can also enhance transparency and trust in the philanthropic sector. Donors can trace the impact of their contributions in real-time, witnessing the progression of projects and ensuring that funds are utilized as intended. This level of accountability and the participatory nature of NFTs can foster deeper engagement, turning one-time donors into long-term supporters and advocates. In a world where trust in institutions is often wavering, NFTs offer a transparent, interactive, and rewarding model that could rejuvenate and redefine the philanthropic sector for the digital age.
A great example of a project using NFTs to drive philanthropy and increase donor engagement is JCR Club, an up-and-coming NFT project launched by White Buffalo Land Trust. It is “a limited collection of 1,000 unique collectibles representing membership in a like-minded community supporting the regeneration of Jalama Canyon Ranch (JCR) and the global regenerative agriculture movement.” Each JCR Club NFT is geo-spatially linked to a specific acre of the Ranch, and is generated using 10 ecological data points, giving holders a special connection to the land they supported through the purchase of an NFT. Holders will also have access to a variety of unique rewards and perks including access to the bounty of the ranch, including world class wines, oils, and meats, and the opportunity to attend events and tours at the ranch.
Check out our interview with Kyle Sullivan of JCR Club, where we discuss how they’re using Web3 tools to drive regenerative land stewardship.
Gamifying positive action with dynamic NFTs
The blending of gaming mechanics with real-world actions, or "gamification," has been a burgeoning field, seeking to engage and motivate individuals by tapping into our intrinsic love for rewards, achievements, and competition. NFTs, with their unique attributes, have emerged as powerful tools in this realm, especially when it comes to incentivizing positive behaviors. Imagine completing a sustainability challenge, like a community clean-up or a week-long carbon footprint reduction, and being rewarded with a unique digital token. This NFT could evolve in design or gain added features as you complete more challenges, providing a visual representation of one's contributions and achievements.
Furthermore, these tokens aren't just digital badges of honor; they may also carry tangible value in the blockchain ecosystem. This means that by partaking in positive actions, individuals aren't just earning a pat on the back, but could also be earning something of actual value. A tree-planting initiative such as Treegens, for instance, could reward participants with NFTs that grow in complexity as more trees are planted, and these tokens could then be traded, sold, or showcased in virtual environments. The allure of such tangible rewards, coupled with the satisfaction of making a positive impact, can drive wider participation and sustained engagement, making the act of doing good not just fulfilling, but also fun and financially rewarding.
A great example of a project using NFTs to drive positive social action is Ecosapiens, which styles itself as “the world’s first carbon-backed collectible.” Each Ecosapien NFT is represented by unique humanoid artwork, and is backed by 16 metric tonnes of CO2 (the average person’s annual CO2 emissions). Holders have the opportunity to “level up” their Ecosapien by infusing it with additional Carbon. As it levels up, the dynamic NFT transforms with additional traits and artwork, including “various flora, fauna, mineral, and technological elements, hybridizing the entire spectrum of Earth's biological kingdoms with human technology.” Ecosapiens is a great example of how Web3 tools like NFTs can be used to represent and protect natural assets while also gamifying decarbonization efforts. If you’re interested in learning more about Ecosapiens’ innovative approach, check out our chat with their Founder Nihar Neelakanti on climate tech, digital assets, and the first carbon-backed NFT.
Conclusion:
As we navigate the digital frontier, NFTs stand out not just as a technological innovation, but as a catalyst for social good. Beyond the headlines of million-dollar art sales and epic collapses, these unique digital assets hold the key to a new era of community building, transparent philanthropy, enhanced accountability in impact monitoring, safeguarding intellectual property, and gamifying positive actions for social impact. The five use cases discussed illuminate just the beginning of this journey. As we continue to explore and innovate, the true potential of NFTs in shaping our world for the better will unfold.
From artists to philanthropists, gamers to scientists, every stratum of our society stands to benefit from the integration of NFTs into our digital interactions. In this rapidly evolving landscape, staying informed and engaged will ensure that we harness the full potential of NFTs to drive meaningful change and create a more inclusive, fair, and interconnected global community.
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