A redeemable non-fungible token (NFT) is a type of NFT that represents ownership of a physical or digital item.
An NFT is a unique digital item stored on a blockchain. NFTs can represent almost anything and serve as a digital record of ownership.
A redeemable NFT is a type of non-fungible token that represents ownership of a virtual or physical item. In 2022, Olivier Fernandez, Frédéric Le Coidic, and Julien Béranger published an EIP (Ethereum Improvement Proposal) that introduced the necessary extension that turns an NFT into a redeemable NFT.
By adding the extension to an NFT’s smart contract, developers made it possible to validate an NFT’s redeemability. If an NFT is redeemable, the function will read “true.” If it reads “false,” the NFT has already been redeemed.
Redeemable NFTs are often created by creators, artists, or businesses with the purpose of building community or loyalty. Redeemable NFTs may offer holders physical products that ship after the NFT has been purchased, community-building perks, like video calls with the original creator or artist, or virtual experiences. Redeemable NFTs can also double as a key to another digital item.
NFTs allow users access to virtual worlds or communities but until the advent of redeemable NFTs, the benefits didn’t always cross over into the physical world. With redeemable NFTs, brands like Starbucks have been able to create loyalty programs that include virtual experiences that immerse users while also connecting with them in the physical world.
By using a blockchain to track the ownership and movement of a redeemable NFT, it’s possible to establish a clear and verifiable record of the authenticity and provenance of the NFT. This can provide added transparency as the NFT moves from one holder to another, or an holder redeems the NFT.
Redeemable NFTs can be keys to online communities and real-world activations. For example, it can connect fandoms virtually before or after a live concert or allow those who purchase an NFT to have a unique experience with their favorite band.
The blockchain’s public nature and clear and transparent record of ownership and sales history can help a creator reach more fans as well as improve their community’s experience.
A phygital NFT is an NFT that includes both a physical and virtual component. It signifies the integration of physical and digital elements within an NFT or the experience associated with it. Not all redeemable NFTs are phygital, but many are.
In the case of a phygital NFT, the token represents not only a digital item but also a connection to a physical item or experience. This can include things like a physical collectible, artwork, or merchandise that is linked to the NFT. For instance, a phygital NFT may grant the holder access to a limited edition physical item, such as a unique art print or a commemorative object.
The concept of phygital NFTs aims to bridge the gap between the digital and physical realms, offering a more holistic and immersive experience for collectors and enthusiasts. It combines the scarcity and uniqueness of digital items with the tangible appeal of physical objects.
The ownership of a phygital NFT not only provides access to the associated digital content but also offers a connection to a physical item or experience, blending the best of both worlds.
Redeemable NFTs are stored in a crypto wallet, similarly to other NFTs. One of the biggest hurdles for redeemable NFTs is that the anonymous nature of the blockchain makes it more challenging for creators of redeemable NFTs to access the emails or addresses of those who purchase their NFTs, making shipping a physical product or connecting with users about added perks difficult. There are methods of overcoming this, but in practice, redeemable NFT holders are encouraged to connect with the creator’s Discord or social media platforms for updates on redeemability.
Redeemable NFTs are commonly used to build community and support for a creator’s brand, products, or services. They serve as connection points that transcend the virtual world and find their way into an owner’s physical space.
On OpenSea, you’ll find the RTFKT X NIKE AR HOODIE redeemable NFT collection, which has already been redeemed by holders, and the corresponding hoodies have been shipped out. In the case of this collection, while the redeemable NFT collection and its accompanying physical item have already been fulfilled, users are still able to purchase from the NFT collection for present and future collection perks.
Since then, RTFKT has also released another redeemable collection, called RTFKT x Nike Air Force 1. The 10-design collection features limited edition designs by Takashi Murakami. It launched on April 24th, 2023 and ran until May 8th, 2023. Through the purchase of an NFT from the collections, holders could participate in the forging event that allowed them to redeem physical sneakers.
The redeemable NFT space is new and full of innovation. Enevti created tools that make video chats, live streaming events, or unique 1:1 creator and fan experiences possible. According to the brand's whitepaper, "Enevti is a decentralized social media NFT platform to help fans get an authentic relationship with their favorite influencers. At the technical level, Enevti is a native blockchain protocol that runs on Delegated-Proof-of-Stake consensus with self-sustaining governance, centered on implementing a redeemable NFT abstraction and a token utility mechanism to revolutionize the whole creator economy industry. Enevti protocol provides a decentralized ecosystem that does not rely on a single coordinator that serves all protocol participants, including token holders, creators, fans, delegates, and developers."
Nike's web3 community, .SWOOSH, voted on their top Air Force 1s of all time, which were then commemorated with four virtual posters. On April 18th 2023, 106,453 posters were airdropped to .SWOOSH members. Each member had approximately a one in three chance of getting a poster, which would then unlock access to the Our Force 1 (stylized as OF1) collection that members will be able to burn/redeem to purchase an OF1 box. Once the OF1 poster was redeemed, holders received a redeemed edition of that poster as a keepsake.
In 2021, Ceilidhs launched The Rebirth NFT project, which became the first whisky redeemable NFT with 4,000 NFTs in its collection. The project is made up of 8 different collections, each paired to a specific whisky. The NFT collection goes through three different phases before the bottles are shipped to the NFT owners.
You can find redeemable NFTs across many of OpenSea’s NFT categories.
In order to buy an NFT, you'll need a crypto wallet and cryptocurrency (or, in some cases, just a credit or debit card). Using OpenSea, you can instantly buy items listed for sale, bid in auctions, or make offers on NFTs.
NFTs operate on blockchain technology, making it possible to verify their ownership and easily transfer them from one owner to the next. Ethereum, Solana, and Klaytn are three examples of blockchains that store NFTs.
A blockchain is a digitally distributed ledger that records transactions and information across a decentralized network. Most blockchains are verified by many nodes (read: computers), which is why you’ll hear them described as “decentralized.” Different blockchains may verify their transactions using different methods but ultimately operate similarly.
Blockchain technology allows users to easily transfer, collect, and verify their NFTs. The provenance of an NFT is one of its biggest advantages.
Web3 technology is still new and constantly evolving, so while no single action guarantees protection, there are best practices that can help. The best rule of thumb is that if something looks too good to be true, it probably is. Never share your wallet’s seed phrase, be careful when taking actions using your wallet, and make sure to thoroughly evaluate NFTs before buying.
OpenSea also has an icon visible via a blue checkmark badge on a collection or account. A blue checkmark badge on an account means that account has been verified. A blue checkmark badge on a collection means the collection belongs to a verified account and has significant interest or sales. (OpenSea does not endorse verified accounts or badged collections, and OpenSea makes no representations regarding the NFTs in a verified account or badged collection.)
OpenSea makes no representations or guarantees regarding the collections highlighted in this article. Users must do their own research and use their own judgment before buying any NFT, including those included in the collections highlighted in this article. The descriptions of the collections highlighted in this article were adapted from descriptions provided by the NFT creators, not OpenSea.
In web3, the term “gas fee” refers to the payment needed to execute transactions on the blockchain. Gas fees increase when more people use applications that run on top of a blockchain’s network, therefore competing for space within the block. Think of it like Uber’s surge pricing model that increases the cost of booking a ride during the busiest commuting times. OpenSea also doesn’t control gas fees, set gas fees, or receive any of the gas fees incurred by users on the platform. Instead, they all go to network validators or miners.
When you start the NFT purchase process using OpenSea, you’ll see the gas fee broken down by your wallet provider, so you can watch the fee refresh and complete the transaction when it’s low.
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