Probably Something: A Multi-Layer Taxonomy of Non-Fungible Tokens

Abstract: Purpose: This paper aims to establish a fundamental and comprehensive understanding of Non-Fungible Tokens (NFTs) by identifying and structuring common characteristics within a taxonomy. NFTs are hyped and increasingly marketed as essential building blocks of the Metaverse. However, the dynamic evolution of the NFT space has posed challenges for those seeking to develop a deep and comprehensive understanding of NFTs, their features, and capabilities. Design/methodology/approach: Utilizing common guidelines for the creation of taxonomies, we developed (over three iterations), a multi-layer taxonomy based on workshops and interviews with 11 academic and 15 industry experts. Through an evaluation of 25 NFTs, we demonstrate the usefulness of our taxonomy. Findings: The taxonomy has four layers, 14 dimensions and 42 characteristics, which describe NFTs in terms of reference object, token properties, token distribution, and realizable value. Originality: Our framework is the first to systematically cover the emerging NFT phenomenon. It is concise yet extendible and presents many avenues for future research in a plethora of disciplines. The characteristics identified in our taxonomy are useful for NFT and Metaverse related research in Finance, Marketing, Law, and Information Systems. Additionally, the taxonomy can serve as an information source for policymakers as they consider NFT regulation.