What is Redeemable NFT? Redeemable NFT is a Non-fungible token (NFT) that represents ownership of a virtual item or a real-world item. Redeemable NFTs have received a lot of attention from the community recently. So what’s special about Redeemable NFT? Let’s find out with Weakhand in this article.
What is Redeemable NFT?
Redeemable NFT is a Non-fungible token (NFT) that represents ownership of a virtual item or a real-world item. People can understand the Redeemable NFT concept very simply: NFT buyers can exchange it for another asset, such as a virtual item or a real-world item.
In 2022, Olivier Fernandez, Frédéric Le Coidic, and Julien Béranger proposed EIP 5560 to introduce the extension needed to turn NFTs into Redeemable NFTs. This proposal was adopted by Ethereum founders and officially became the ERC 5560 standard on Ethereum.
What is Redeemable NFT
By adding extensions to the NFT Smart Contract, developers were able to validate the redeemability of the NFT. If an NFT is redeemable, this function will display as “true” and if it displays as “false” then the NFT has been redeemed.
Redeemable NFT is designed to bridge the gap between the real world and the digital world. With the help of Smart Contract, users can use NFTs to purchase physical items such as clothing, collectibles, and even tickets to events. Redeemable NFTs can also be used to redeem rewards, services, and special offers.
Pros and Cons of Redeemable NFTs
Redeemable NFT is still a new concept so it has both certain advantages and disadvantages. Following are the advantages and disadvantages of Redeemable:
Advantages of Redeemable NFTs
- Provide tangible value: Redeemable NFTs are a great way to exchange digital assets for something of tangible value, such as a physical item or a service. This makes them more attractive to investors because they can see the possibility of gaining tangible benefits from their investment.
- Increase the value of goods and services: By creating a digital asset that can be exchanged for a tangible item or service, businesses can increase the value of their goods and services. This is because NFTs can be used to create scarcity of the item being sold as well as give customers the opportunity to own something of value.
- Pave the way for new businesses: Redeemable NFTs can be used to create new business models and revenue streams. For example, companies can issue their own Redeemable NFTs and use them to issue coupons or rewards to their customers. This can be used to encourage customers to buy a company’s products or services.
- Create digital collections: Redeemable NFTs can also be used to create digital collectibles that will be tied to a physical item in the real world. This is what big brands like Adidas or Nike are using to develop their products.
Disadvantages of Redeemable NFTs
- Vulnerable to scams: NFTs are still a relatively new concept and are therefore at risk of being exploited by bad actors who can scam new entrants to the market. Therefore, we need to take necessary precautions when investing in NFTs to ensure the safety of our investment process.
- Not yet widely applied: Redeemable NFTs are still a relatively new concept and therefore they are not yet widely adopted in the market. This also poses some risks as they have not yet been widely tested in the real world.
- Difficult to use: Redeemable NFTs require a link to a virtual item or a physical item in the real world. This can make it difficult for users to go through complicated steps to redeem.
Popular NFT Redeemable Collections
RIFKT x Nike AR Hoodie
Physical Backed Tokens of Azuki
Ceilidhs x COR The Rebirth Collection
RTFKT X Nike
Famous shoe brand Nike has collaborated with RTFKT to release a Redeemable NFT collection called RTFKT X NIKE AR HOODIE FORGED. Users can purchase NFTs in the collection in exchange for corresponding Hoodies.
Next, Nike and RTFKT also collaborated to develop limited edition shoes designed by artist Takashi Murakami. The collection called RTFKT x Nike Air Force 1 was released on April 24, 2023 and lasts until May 8, 2023. Through purchasing an NFT from the collections, owners can participate in a forging event that allows them to redeem physical sneakers. This is a unique combination that shows that Nike also wants to apply new technology in its products.
Physical Backed Tokens of Azuki
Announced in October 2022, Physical Backed Token (PBT) promises to blur the lines between digital and physical. The project has also provided a decentralized way to authenticate and track the entire ownership of physical items by users.
Azuki also closed the auction for eight skateboard NFTs that will be converted into physical gold skateboards. According to the project, Gold Shateboard is an artifact that demonstrates the utility of PBT and opens a new chapter for Azuki.
Ceilidhs x COR: The Rebirth Collection
In 2021, Ceilidhs launched The Rebirth Collection featuring 4000 NFTs in its collection. Users who own NFTs in the collection can redeem bottles of whiskey. NFT collections go through three different stages before the bottles are shipped to the NFT owner.
summary
Redeemable NFT is a new concept full of potential and helps NFT get closer to the real world. This technology has the potential to revolutionize the way we do business and interact with digital assets. Above is all the information I want to provide to everyone about Redeemable NFT, hope everyone will receive interesting knowledge.
