Can NFTs build Generational Wealth?
By Fernanda De La Torre
What is Generational Wealth?
The term “generational wealth” refers to wealth that is passed down through generations within a family. Traditionally, this type of wealth is made by investing in the stock market, antiques and heirlooms, real estate, or by starting a business. Methods like investing in dividend-paying stocks, collectibles that build value, and real estate not only could work to build generational wealth, but do it passively. This means it doesn’t take too much labor to earn or maintain.
Thanks to the rise of blockchain technology, there is a new way to build generational wealth through non-fungible tokens “NFTs.” NFTs have taken the world by storm with a trading volume that surpassed $23 billion in 2021.¹
With NFTs, creators have the ability to generate passive income that can be passed down through generations, and here’s how.
NFT Royalties
NFTs are most associated with the traditional world of art and collectibles. While many assume that a painting or sculpture’s copyright is transferred to the buyer when it’s purchased, that isn’t quite how it works.
Unless you have explicit permission from the artist; the right to duplicate, display or distribute copies could remain with the original owner. Just like with physical art, purchasing an NFT does not automatically transfer all copyright or intellectual property rights of the content to the buyer.
The rights associated with the NFT are completely up to the creator which gives them a great amount of control over their assets throughout their lifecycles.
Because of the nature of blockchain technology and smart contracts which execute terms of an agreement without the need for intermediaries, creators are also able to seamlessly set a royalty percentage, typically between 2–10%. Instead of a one-time sell, automatic payouts are given to the creator each time an NFT is traded on a secondary marketplace in perpetuity.
This has some incredible implications, especially on platforms that already support creators.
Say you’re an athlete or artist who wants to offer digital merchandise to fans on Upstream.
After specifying your goals and minting your NFT on the app, you’ll already receive 98% of the NFT sale immediately after purchase (some of the highest payouts in the NFT space). Because Upstream doesn’t charge users gas fees, your fans are more incentivized to buy and sell your NFT without worrying about the additional fees. This means more potential revenue and royalty payouts.
As long as your NFT is being traded, you will be generating wealth. If your work lasts more than a lifetime, it can be passed down to the next generation. This is what gives NFTs a great seat at the table of methods used to build generational wealth.
Since NFTs are digital assets, you also do not have to worry about physical damage being done that could decrease its value. Further, operating outside the physical world gives creators a lot of flexibility to develop really innovative NFTs from merchandise, to tickets, to commemorative moments and more.
The beginning of NFTs and the MetaVerse
Digital assets are becoming increasingly more valuable as the web continues its transition to Web 3.0 to represent a truly immersive experience for users.
NFTs have already been hailed as the digital tickets of ownership that will operate in this space and prove digital ownership on the web. With the rise of the Metaverse, we believe this will continue to build value.
For example, people have begun purchasing homes and plots of land in the metaverse. What if an NFT was the deed for that land? Every time that land would sell, and the deed was passed on, the creator would earn a percentage of the sale.
Other items such as clothing pieces can also be tied to NFTs and the metaverse. Brands such as Nike have partnered with RTFKT, which is a brand that specializes in virtual sneakers.²
The possibilities to generate revenue through NFTs are endless.
Upstream offers a secure one-stop-shop for creating and selling authenticated NFTs to a global fan-investor community. For more details reach the team at hello@upstream.exchange. Visit https://upstream.exchange/.
About Upstream
Upstream, a MERJ Exchange Market, is a fully regulated global stock exchange for digital securities. Powered by Horizon’s proprietary matching engine technology, the exchange enables investors to trade shares in IPOs, NFTs, U.S., and international dual-listed equities, and celebrity ventures directly from the app https://upstream.exchange/. Interested issuers can reach the team at hello@upstream.exchange.
About Horizon
Horizon is a fintech company that builds and powers global securities exchanges with an integrated suite of software for compliant issuance, management, and secondary trading of securities. Their in-house solutions combine Wall Street and Silicon Valley to power the next generation of securities offerings and trading in the U.S. and globally. Learn more at https://www.horizonfintex.com/.
Source
2 Zipmex
Upstream is a MERJ Exchange market. MERJ Exchange is a licensed Securities Exchange, an affiliate of the World Federation of Exchanges and full member of ANNA. MERJ supports global issuers of traditional and digital securities through the entire asset life cycle from issuance to trading, clearing, settlement and registry. It operates a fair and transparent marketplace in line with international best practice and principles of operations of financial markets. Upstream does not endorse or recommend any public or private securities bought or sold on its app. Upstream does not offer investment advice or recommendations of any kind. All brokerage services offered by Upstream are intended for self-directed clients who make their own investment decisions without aid or assistance from Upstream. All customers are subject to the rules and regulations of their jurisdiction. By accessing the site or app, you agreed to be bound by its terms of use and privacy policy. Company and security listings on Upstream are only suitable for investors who are familiar with and willing to accept the high risk associated with speculative investments, often in early and development stage companies. There can be no assurance the valuation of any particular company’s securities is accurate or in agreement with the market or industry comparative valuations. Investors must be able to afford market volatility and afford the loss of their investment. Companies listed on Upstream are subject to significant ongoing corporate obligations including, but not limited to disclosure, filings and notification requirements, as well compliance with applicable quantitative and qualitative listing standards.
