NFTs and Style: Collectors Pay Large Cash for Digital Sneakers

FEB. 27 MARKED the release of a trio of sneakers that looked a bit like scribbled Air Force ones – a collaboration between design studios Rtfkt and Little, an 18-year-old digital artist who lives in Seattle. The three messy designs, each slightly different, sold within seven minutes and were listed at $ 3,000, $ 5,000, and $ 10,000. A total of 621 pairs were purchased for the equivalent of $ 3.1 million. In the current market for frenetic sneaker collectors, this quick currency exchange isn’t as shocking as it sounds. (A single pair of Air Jordans that was sold for at auction $ 615,000 in August.) What is really notable, however, is that Rtfkts shoes cannot be worn. They cannot even be touched or held. At least not now.

These virtual rainbow colored sneakers were released digitally as NFTs or non-fungible tokens. The latest internet based Collecting mania, NFTs are digital art or collectibles that are authenticated or “embossed” using blockchain technology and then purchased using cryptocurrencies such as Ethereum. A digital ledger that anyone can access keeps track of who owns a particular NFT and ensures that the NFT cannot be duplicated or tampered with. Owning an NFT does not mean that you own the copyright in any particular asset, but rather grants you boastful rights. And NFT sales can be staggering: last week, network artist Mike Winkelmann, who leaves Beeple, sold a single digital collage Christie’s for a record $ 69.3 million to Singapore’s Cryto fund Metapurse.

With all the money sloshing around in the NFT market, it seems like a natural playground for luxury industry players like Gucci, Saint Laurent or Prada who have long been selling expensive, attention-grabbing merchandise. So far, roughly a year old called Rtfkt (an intentional misspelling of the word “artifact”) has been the leader in NFT sneakers, and now apparel. Its success could provide fashion companies with a roadmap should they choose NFTs.

“Sneakers were initially the basic tool,” she explained, as it was an existing asset class Benoit Pagotto, one of the three founders of Rtfkt. (In a very internet-time corporate structure, Mr. Pagotto is based in Paris, but his partners Chris le and Steven Vasilev Located in Salt Lake City and Los Angeles, respectively.) Previously in the esports industry, Mr. Pagotto noted that by 2021, even teenagers will know you can buy and sell a new, hyped-up sneaker like an Adidas Yeezy Boost by the day Closest to you for serious gain.

18 year old artist Fewocious holds the physical samples of his NFT sneaker designs.


Photo:

Rtfkt Studios

This agility of a sneaker also applies to the digital sector. Just a few weeks after their market launch, a few “shoes” are trading for around double their starting price. And unlike the traditional auction market, Rtfkt gets a cut every time the NFT is resold. This is a common practice in the marketplace, and it makes NFTs even more enticing because developers can make money on paper over the long term.

The company is not just digital. Rtfkt has hired two former employees of revered shoemaker Clarks to create real-life samples of his digital sneaker designs and will be showing all NFT owners concrete versions that are made by factories. “We think that emotional attachment to physical objects is still important and can increase attachment to design,” said Pagotto. The tangible Fewocious sneakers will ship starting April, but Mr Pagotto said these real-life shoes are a less interesting sideline to digital release for the company’s customers. In the weeks since the virtual shoes were released, he has watched NFT owners giddily post the designs on social media without ever touching a physical copy.

Rtfkt’s main audience consists of two often overlapping groups: digital followers who are getting used to social media; and cryptocurrency fanatics who have reaped online-based fortunes. Arthur MeucciThe 30-year-old photographer and early NFT collector bought a version of the Rtfkt Fewocious shoes. He looks forward to the physical pair, if only so he can make a YouTube video of him unpacking the extremely rare shoes. After that, however, he plans to unload the shoes. “I don’t see myself walking around with a pair of shoes that cost that much,” he said. For him, the shoes and the NFT are more of a speculative asset than a wearable item.

Non-fungible tokens or NFTs exploded in the digital art scene last year. Proponents say they are a way to make digital assets scarce and therefore more valuable. WSJ explains how they work and why skeptics wonder if they’re built to last. Photo illustration: Jacob Reynolds / WSJ

A thirst for digital flexing can hold the key to where “portable” NFTs go. Clothing has long played a role in digital experiences. Popular contemporary games like “Fortnite” and “Deer crossingAllow players to equip their characters all-in. Fashion brands have even entered the virtual fashion ecosystem: earlier this year, Gucci presented its North Face collaboration as part of the game “Pokèmon Go”. However, this clothing is limited to that particular game. How Rustin SotoodehThe 25-year-old CEO of tech accessories company Higround and a true NFT believer said it was equivalent to buying a pair of Nikes but could only wear them in the store.

He believes that in the future he will be able to digitally “own” an item of clothing – outside the parameters of a single game – and give you the ability to sneak around in any virtual space. His “dream” was to have both a real and an NFT version of his favorite Stone Island jacket. He could go to the corner shop or play “Halo” digitally in it.

There is evidence that companies are working towards this one-to-one relationship between their own closet and the digital closet. In 2019, Nike patented “CryptoKicks, ” a system whereby customers receive a virtual version of a shoe when they purchase it, which is kept in the “digital locker”. This technology has yet to be rolled out, and a Nike representative did not respond to a request for comment on the patent. Even NFT proponents believe that Mr. Sotoodeh’s open dreamscape is a long way off. Gaming “is a very competitive industry,” said Rtfkt’s Pagotto, and it would take a great deal of collaboration for video game publishers to use the same NFT-enabled technology.

Currently, NFTs are largely static objects – comparable to paintings hanging in your own home. Even in this context, some NFT aficionados see potential for the fashion world. Jeff Carvalho, the co-founder of Highsnobiety, a clothing and culture website, suggested that a fashion label like Tom Ford might mark a memorable moment on the catwalk and put it up for sale. This is similar to NBA’s top shot , a hugely lucrative marketplace where fans are spending five or even six figure sums to own NFT clips with highlights like a LeBron James Dunk. Mr. Carvalho also envisioned fashion houses selling NFTs of their most iconic designs. If you’re already a hoarder of Margiela’s signature Cloven Tabi boots or Comme des Garçons Play’s cute logo t-shirts that have an extremely rare NFT version of these designs could be the cherry on top.

Mr. Pagotto offers a reality check: In contrast to basketball, fashion is “not such a big fan business”. There aren’t millions of people streaming runway shows, and there are far fewer tabi boat collectors than LeBron fans. These facts limit the audience – and the potential high returns – of luxury NFTs. When contacted about possible future uses of blockchain technology, several fashion brands, including Gucci,

Burberry

and Louis Vuitton did not comment or respond.

The next immediate step for fashion-related NFTs could be something Mr. Sotoodeh created just for fun. A few weeks ago he embossed a cell phone from his hand “fit pic, ”- a head-to-toe photo of what he was wearing – which he claims is the first ever NFT-Fit picture. It’s not a particularly great photo – his head is cut off and his arm is out of the frame. But it’s kind of a crazy piece of ephemera that can thrive in this crazy NFT world. After all, Twitter founder Jack Dorsey is auctioning an NFT of his very first tweet, which is worth up to $ 2.5 million on Valuables, an NFT marketplace. So far, no one has bought the NFT fit picture of Mr Sotoodeh, but with only a few thousand Instagram followers, Mr Sotoodeh is not a blockbuster fashion influencer. If someone with millions of followers paints the right picture – ridiculous as it sounds – crypto sales could blow up.

Write to Jacob Gallagher at Jacob.Gallagher@wsj.com

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