Non-fungible tokens are not new but have lately broken through the art world and mainstream consciousness. What's behind the hype? How can the Luxury sector tap into the potential NFT offers?
Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s for $69Mn. Image: Beeple
"In March 2021, Twitter CEO Jack Dorsey sold the site's first tweet as an NFT for $2.9 million. After Dorsey's announcement Tesla CEO Elon Musk teased he would sell an NFT, but later turned down a $1 million offer for his tweet."
Ownership is deeply human. From ancient times, our ancestors have loved to collect things for self-expression and identity. This led to the foundation of trade. Firstly, trade started with barter systems, and then the concept of currency was introduced which kept evolving in different forms. Similarly, collectibles also evolved from shells to pokemon cards or comic books to even toilet paper in the Covid19 pandemic!
However, digital media did not share the same path of ownership until the invention of NFTs. Before NFT, the ownership, in most cases, shifted to user-ship. For example, we don’t need to buy a CD of songs when we have memberships of music apps. Nevertheless, this did not give digital goods their identity.
With the introduction of NFTs, digital pieces have their unique ownership and identity. The digital age brings with itself new forms of collectibles - Digital Assets - digital pieces of art, virtual real estate, domain names. Collectibles are not just for their value, but also for a symbol of royalty and authenticity. NFTs give the joy of ownership and are frontiers for crypto.
In layman’s terms, NFTs are digital that you can truly own and manage.
NFT marketplaces are quickly rising to prominence in 2021. Simply put, they provide a marketplace for the buying, selling, and trading of NFT tokens. Many of these provide platforms to artists who basically only existed on Instagram or Twitter and were creating all this really special work but never had a way to make money from it. They can now sell crypto art and are already starting to see some benefits and recognition.
Investments in NFTs rose 299% in 2020, gaining popularity as cryptocurrencies like Bitcoin continued to boom, according to the report. In the past 30 days alone, NFT Marketplaces have generated over $1 billion in sales, according to CryptoSlam.
Below are rankings and analysis of NFT Marketplaces with respect to their token trading volumes, number of traders per marketplace, and more key metrics. OpenSea is a dominant player currently followed by NBA Top Shot.
It's “only a matter of time” before a brand like Gucci will release an NFT
Where does NFT meet Luxury?
The rise of Digital Fashion and AR Clothing is creating new channels of revenue for Fashion & Luxury. NFTs provide the foundation to ensure exclusivity and authenticity for Luxury Digital Commerce.
1. Digital product drops backed by NFT
The virtual world is buzzing. Consumers need to dress up their avatars! NFT creates unique ownership of these exclusive products just like in the real world for digital avatars and virtual try-on.
2. Luxury and Gaming: The Commerce of Gaming
Fashion has been playing with Gaming for quite some time but NFTs have opened a secure gateway for Luxury Maisons for product launches and marketing strategies.
3. NFT Fashion Marketplaces
NFT provides the perfect platform to ensure exclusivity for Luxury houses in the Digital world. The rise of NFT based merchandise has opened up Fashion marketplaces dedicated to virtual fashion with 3D modeling, digital avatars, customized designs, etc. Notably, Dress-X, The Fabricant, Neuno, and Carlings.
4. Sustainable Luxury
Digital fashion aims to reduce consumption in this world obsessed with Fast Fashion. According to research by DressX, 9% of customers in developed countries only buy new clothes to make a picture for their social media and return after taking a photo. These unnecessary returns pose a big logistical challenge for retail. Essentially, these clothes don’t need to be produced - they can only exist in the digital space.
Read more about NFT:
What is NFT?
Market Overview: What’s next?
The impact of NFTs on business
Luxury’s Digital Avatar
Evolution of NFT in Fashion & Luxury
Download the full report here.
Shriya Madan, an ardent learner, a digital enthusiast, aspires to make an impact in the real world with the power of technology
Pranjali Apurva, driven by curiosity, converging design principles with digital transformation