You're likely reading a lot about three NFT use cases that are currently gaining popularity: redeemable NFTs, NFT burn mechanisms, and phygital NFTs. While these three use cases have a lot of overlap, each is distinct and has its own function.

Below, you'll find a breakdown of each explaining how it works with the others and how it functions as a stand alone use case. For further reading on each, check out our in depth Learn Center articles on redeemable NFTs, NFT burn mechanisms, and phygital NFTs.

Redeemable NFTs

• A redeemable NFT (also called “a redeemable”) enables the holder to claim a separate physical or digital item(s). 
• There are two types of redeemable NFTs: 
• One that can be exchanged for an entirely new digital or physical item (the holder does not keep the original NFT).
• Another that allows holders to keep their original NFT and still redeem it for another item(s). In this example, the metadata may be updated to reflect redemption status and quantity remaining, if applicable.

Read our deep dive on redeemable NFTs here.

NFT Burn Mechanisms

• Burn mechanics in NFTs refer to a mechanism by which NFTs can be permanently disabled from individual ownership (meaning, they can no longer be transferred, purchased, or sold).
• Many redeemable NFTs use burn mechanisms to track on-chain redemption, but NFT burning can also simply be done to permanently disable the NFT without any redemption.
• In some cases, specific traits can be burned without the entire NFT being burned. This allows the holder to keep the NFT while still utilizing the burn mechanism, often in concert with redemption.

Read our deep dive on NFT burn mechanisms here.

Phygital NFTs

• A phygital NFT has both a digital and physical component tied to its utility. 
• Phygital NFTs exist across industries, from fashion to gaming, and are typically used to associate a real-world purchase (a physical product or an IRL service, for example) with an accompanying digital item or virtual receipt. They can also be used to enable the redemption of a physical item tied to an initial digital purchase, also known as a redeemable. Some phygital NFTs are redeemable, but not all of them are.  
• Phygital NFTs can be purchased directly using an NFT marketplace like OpenSea, or in some cases, the phygital NFT can be minted or claimed after the physical item is purchased. It can also be granted directly in person or through traditional e-commerce.  
• Phygitals are often used by brands to build communities around beloved products or services. This is especially valuable for brands that haven’t traditionally had direct-to-consumer relationships but serve loyal, passionate fans.

Read our deep dive on phygital NFTs here.