The term ‘Phygital’ was coined by an Australian agency called Momentum back in 2013. It combines the words ‘physical’ and ‘digital’ to describe an amalgamation of the two realms that have come to shape our world.

With the emergence of the metaverse, it is now even more clear that our physical and virtual worlds have become closely interconnected. This is thanks to rapidly advancing technologies, especially blockchain, which made way for digital assets such as cryptocurrencies and NFTs.

Phygital NFTs: what are they?

The term ‘phygital’ has been gaining ground rapidly in the decentralised economy and is strongly associated with NFTs. Phygital NFTs enable blockchain developers to combine the digital and physical by expanding the functionality of NFTs and linking them with real-world objects and experiences.

Examples of phygital NFTs

NFT ticketing is an excellent example of phygital NFTs. For instance, at this year’s Coachella Music Festival, in addition to regular physical tickets, the organising committee also offered a handful of NFT tickets. They were known as the ‘Coachella Keys Collection’ and consisted of 10 NFTs that gave holders lifetime access to the festival.

Several premium whisky brands also turned to phygital NFTs this year. For example, in October this year, renowned distillers William Grant and Son offered 15 NFTs that represented bottles of 46-year-old Glenfiddich whisky. Each NFT comes with an artistic impression of the bottle that also serves as a counterfeit-proof certificate of ownership. BlockBar, William Grant and Son’s NFT partner for the project, was responsible for storing the physical bottle and delivering it to the buyer upon request.

Also Read: Explained: Literary NFTs and how they work

Phygital NFTs have also been used in the fashion industry. For example, in March this year, the famous Italian fashion brand Diesel forayed into the NFT space with its “phygital” NFT wearable collection called D: Verse. Besides being a digital representation of the brand’s runway pieces from the latest Fall/Winter show, the NFTs also gave holders exclusive perks. This included access to airdrops and discounted pre-sales. It also gave holders invites/VIP access to the next fashion show and several other exclusive privileges.

But perhaps the most exciting use of phygital NFTs was Damien Hirst’s ‘The Currency’. The renowned British artist created a collection of 10,000 spot paintings, each represented by its own NFT version. Buyers had to choose which version of the painting they preferred, the digital or the physical. If the buyer chose the physical one, the NFT version was burned and vice versa. Surprisingly, 48.51 percent of the NFT holders decided to keep their digital version.

How to redeem Phygital NFTs?

Burning is the most common way to redeem phygital NFTs. A fitting example is the Nouns Vision project, where users were provided with a commemorative NFT in their wallet. Only when the user burns that NFT is the delivery of the physical NFT initiated. However, not all phygital NFTs work in the same way. Some provide a replacement NFT after the original is redeemed for the real-world object/experience. This way, the buyer still has access to the utility of the NFT, including access to exclusive communities, airdrops, and other occasions.

Conclusion

Phygital NFTs have blurred the line between the real and the virtual worlds. And with every passing day, these digital assets come closer and closer to seamlessly uniting two worlds in one smooth user experience. The future possibilities are endless with Phygital NFTs, and hence they are becoming so popular nowadays. Moreover, it transcends the blockchain experience in the physical world, which is revolutionary, to say the least.

Also Read: Porsche enters NFT space: A look at 3 other automotive giants that stepped into web3 this year