Home / Types of NFTs: What They Are and How They Work

Types of NFTs: What They Are and How They Work

By: Jasmin Espinas
May 19, 2025

In 2024, total NFT sales hit $8.8 billion, with strong interest in digital art, music, gaming items, and virtual goods. Although the market keeps changing, people continue to explore new ways to collect, create, and trade different types of NFTs. If you’re a beginner in the NFT landscape, the nonstop jargon and flood of sub-categories can be confusing.

If you plan on investing in NFTs, this guide will provide a comprehensive breakdown of each type of NFT to help you understand how these digital assets work.

Types of NFTs: What Are NFTs?

NFTs, or non-fungible tokens, are digital certificates of ownership stored on a blockchain. Each token is unique and linked to a specific asset, such as art, music, videos, or physical goods.

Additionally, NFTs operate through smart contracts, which are bits of code that clarify the rules and help carry out actions like sales or transfers. Once someone buys an NFT, the blockchain automatically updates the ownership.

People usually buy and sell NFTs on platforms like OpenSea, Blur, and Rarible.

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Different Types of NFTs

Some NFTs focus on art or music, while others connect to games, fashion, or even real-world events. Below are the different types of NFTs and how they work.

Art NFTs

Art NFTs are digital artworks sold and tracked on blockchain platforms. Artists create these pieces and upload them to NFT platforms where buyers can place bids or make offers.

Buyers often find these artworks on websites like SuperRare and Foundation. In some cases, artists include extras like physical prints or access to future work. Others even offer digital-only pieces that stay fully online.

Example: “Right Place & Right Time” by Matt Kane

Profile Picture (PFP)

Profile picture NFTs (PFPs) are digital avatars used as online identities, often from limited collections like CryptoPunks and Bored Ape Yacht Club. Each image in a collection looks different and includes its own traits.

Some PFPs offer added perks, such as access to private groups, early releases, or exclusive events, making them both collectibles and status symbols.

Example: Bored Ape #2087 sold for over $2.3 million due to its rare “trippy fur” trait

Generative Art

Generative art NFTs are created using code instead of manual design. Artists write scripts that define rules for shapes, colors, and layouts. When a user mints the NFT, the system generates a unique piece based on those rules.

Projects like Art Blocks and Chromie Squiggles popularized this approach, combining art and programming to produce algorithm-driven collectibles that appeal to collectors interested in both technology and originality.

Example: Fidenza #313 by Tyler Hobbs

Collectible NFTs

Collectible NFTs are digital items, often in limited editions, valued for their rarity, design, or traits, similar to trading cards.

Many include features like rankings, challenges, or upgrades to increase engagement. Once sold out, these NFTs must be traded on secondary markets, where limited supply and demand can drive up prices.

Example: Pokémon NFTs

Sports

Sports NFTs are digital assets linked to teams, athletes, or game moments, such as video highlights, athlete cards, or collectible memorabilia.

Leagues like NBA Top Shot, NFL, and UFC license these NFTs to ensure authenticity. Some also include perks like early merchandise access, event invites, or exclusive content.

In addition, resale value often depends on rarity and athlete performance. Teams and brands use these NFTs to boost fan engagement and build active digital communities.

Example: A LeBron James dunk moment on NBA Top Shot sold for nearly $400,000

Fashion NFTs

Fashion NFTs are digital clothing or accessories used in games, virtual worlds, or augmented reality. Users wear them on avatars or preview them in AR apps.

Platforms like Decentraland, Roblox, and Zepeto host these items, and brands like Gucci and Balenciaga have launched NFT collections.

Some fashion NFTs also serve as access passes to exclusive product drops, events, or digital experiences.

Example: The Gucci Garden Experience on Roblox

Metaverse NFTs

Metaverse NFTs include digital land, avatars, and in-world items used in platforms like The Sandbox, Decentraland, and Otherside. These platforms run on metaverse crypto using metaverse tokens to power transactions, upgrades, and experiences.

Users can buy and sell these NFTs just like they would with real-world items. For example, someone might purchase a plot of digital land and then design it with custom buildings, games, or stores.

Example: Snoop Dogg bought land in The Sandbox and launched Snoopverse

Gaming NFTs

Gaming NFTs are player-owned digital assets, such as weapons, characters, or gear, used in video games. Unlike standard in-game items, you can buy, sell, or trade them outside the game.

These NFTs support item transfers across platforms and enable play-to-earn models, where players earn rewards through gameplay.

Example: In Axie Infinity, users buy creatures called Axies as NFTs to battle and breed

Utility NFTs

Utility NFTs provide functional access rather than just digital ownership. They can unlock events, rewards, app features, or serve as digital IDs. Moreover, they include event tickets, DAO membership passes with voting rights, or tokens that grant access to exclusive tools or content. Brands also use them in loyalty programs and promotions to engage and reward users.

Example: VeeFriends by Gary Vaynerchuk

Meme NFTs

Meme NFTs are digital collectibles based on viral images or internet jokes, such as Doge or Disaster Girl. They hold cultural value, and buyers usually trade them for fun or profit.

Creators can monetize their memes by minting them as NFTs, earning from initial sales and resale royalties. Buyers often collect them as digital memorabilia or speculate on rising value during trending moments.

Example: The Success Kid meme, featuring a determined baby clenching his fist

Music NFTs

Music NFTs are digital assets tied to songs, albums, or music content. Artists use them to distribute work independently of labels or streaming platforms.

Some music NFTs also include extras like early access, concert passes, or revenue shares. Platforms like Sound.xyz, Audius, and Royal help artists mint, sell, and control how they monetize their music.

Example: Rapper Nas released music NFTs through Royal

Types of NFTs: NFT Categories

In the following sections, you’ll see how these categories shape how you make, use, and share NFTs.

Based On Interactivity

Some types of NFTs stay the same after you get them. On the other hand, others change or respond based on your usage. This section looks at how different NFTs behave based on how interactive they are.

Static

Static NFTs are digital assets that don’t change after creation. They’re commonly used for digital art and collectibles that require permanent, unaltered content.

Additionally, many creators usually prefer static NFTs for their simplicity and preservation of the original work on the blockchain.

Dynamic

Dynamic NFTs update based on user activity or external data. They’re used in games, where characters evolve, or in sports, where player stats change. A

rtists also create dynamic NFTs that respond to real-world events or time..

Interactive

Interactive NFTs respond to user input, allowing owners to influence behavior, features, or outcomes. Common in Web3 games and metaverse projects, they enable actions like unlocking content or voting on decisions.

These NFTs are also powered by code that reacts based on predefined rules, making them adaptable and participatory.

Based On Token Standards

NFTs follow different technical rules called token standards. These standards regulate how various types of NFTs work, how people use them, and what features they support.

Furthermore, most NFTs use common formats built on the Ethereum blockchain.

ERC-721

ERC-721 is the original Ethereum standard for NFTs. Each token is unique, non-divisible, and tracked by a distinct ID.

Creators commonly use this for digital art and collectibles. At the same time, most NFT marketplaces support ERC-721, making trading and ownership verification straightforward.

ERC-1155

ERC-1155 supports both unique and identical tokens in one contract. This token is commonly used in games to handle one-off items and bulk assets together.

This standard allows batch minting and transfers, reducing gas fees and improving efficiency for managing multiple tokens.

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Based On Licensing

Licensing affects what people can do with the NFTs they own. These rules often depend on the project and how the creator wants to share their NFT.

As NFTs grow, licensing rules have started to overlap with legal topics like copyright and ownership rights. In some cases, these rules can even tie into cryptocurrency regulation, especially when NFTs include profit-sharing or resale royalties.

Open

Open licenses let NFT owners use the content commercially, such as to launch products, build brands, or create derivative works.

Collections like Bored Ape Yacht Club allow this, enabling owners to develop businesses around their NFTs. These licenses encourage community growth and expand project visibility across industries.

Closed

Closed licenses restrict NFT use to personal viewing or display. Buyers can’t create products or derivative works.

Creators use them to retain full control, especially for limited-edition art or branded content. These licenses appeal to collectors seeking exclusivity, not commercial rights.

Partial

Partial licenses grant limited rights to NFT buyers, such as sharing or remixing, while the creator retains key rights.

Moreover, license terms are often stored in the NFT’s metadata. This approach is common in music, photography, and mixed-media art.

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Conclusion

NFTs now cover more than just digital art. People use different types of NFTs in music, games, fashion, events, and even virtual land. As the blockchain world keeps changing, NFTs are starting to focus more on real-world use. At the same time, the conversation around energy use is shifting. New projects are starting to use green cryptocurrency options that reduce environmental impact.

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