The Creator Economy's New Best Friend Is Non-Fungible Tokens

Yassine-Elmandjra

By Yassine Elmandjra | @yassineARK
Analyst

A non-fungible token, or NFT, is a cryptographic asset that represents digital uniqueness. Unlike interchangeable units like bitcoin, an NFT is a unique asset.

In August 2017, NFTs debuted on the Ethereum Network with the ERC-721 token standard. One of the first implementations of this standard was the digital collectible game, CryptoKitties, which allowed players to purchase, collect, breed, and sell virtual cats. Since then, NFTs have evolved to include digital real estate, video game items, digital art, and music.

Despite its rapid growth recently, we believe NFT use is nascent. Today, to monetize digital content, content creators can upload it to Instagram, YouTube, TikTok, Spotify, and other social networks. These centralized platforms then monetize the content with ads or subscriptions, paying content creators a percentage of the profits. By contrast, digital creators can monetize their followers directly with NFTs, selling unique digital content without intermediaries. Last week, for example, EDM music producer 3LAU sold 33 unique tokens for more than $11.6 million, the NFTs redeemable for "special edition vinyl, unreleased music, and special experiences."

ARK believes that NFTs will unlock more value for content creators than any platform in history.