{"id":13782,"date":"2022-05-18T14:36:39","date_gmt":"2022-05-18T06:36:39","guid":{"rendered":"https:\/\/snkrdunk.com\/en\/magazine\/?p=13782"},"modified":"2022-08-08T17:12:06","modified_gmt":"2022-08-08T09:12:06","slug":"meta-sneakers-part-1-are-sneaker-nfts-really-the-way-forward","status":"publish","type":"post","link":"https:\/\/snkrdunk.com\/en\/magazine\/2022\/05\/18\/meta-sneakers-part-1-are-sneaker-nfts-really-the-way-forward\/","title":{"rendered":"Meta-Sneakers Part 1: Are Sneaker NFTs really the way forward?"},"content":{"rendered":"

By Anton Karve<\/strong><\/p>\n

2022 saw the beginning of a drawn-out legal battle<\/a> between the world\u2019s leading footwear and apparel company, Nike, and one of the largest secondary sneaker marketplaces, StockX. Both parties are investing large amounts of money, time and effort into this court battle, which begs the question: what could be so important that it sparked a conflict on this scale, involving an organisation as large as Nike?<\/span><\/p>\n

\"What<\/a>

A pair of virtual RTFKT sneakers. Image – RTFKT\/GQ.<\/p><\/div>\n

Quick Look:<\/h2>\n

Nike & Adidas:\u00a0A market needs its stakeholders<\/a><\/p>\n

StockX & Cult&Rain:\u00a0Virtual tokens for a physical cause<\/a><\/p>\n

STEPN:\u00a0Spend money to make money<\/a><\/p>\n

The meaning behind the madness<\/a><\/p>\n

Food for\u00a0thought<\/a><\/p>\n

To truly understand why Nike and StockX are taking this conflict so seriously, one must first understand the market they are fighting over. This is where terms like \u201cmetaverse\u201d, \u201cnon-fungible\u201d, \u201ccryptocurrency\u201d, \u201cEthereum\u201d and \u201cSolana\u201d start to get thrown in, so I\u2019ve taken the initiative to explain these terms for the uninitiated. For an explanation of all the relevant Key Terms, click here.<\/a><\/p>\n

A market needs its stakeholders<\/h2>\n

Nike x RTFKT<\/span><\/h3>\n

The list of major players in the sneaker NFT market continues to grow every day. The most well-known sneaker NFT project is CryptoKicks<\/a>, a collaboration between Nike and RTFKT, a NFT design studio which Nike bought in late 2021.<\/span><\/p>\n

\"Nike<\/a>

The Nike x RTFKT CryptoKicks lineup. Image – RTFKT.<\/p><\/div>\n

Featuring never-before-seen designs on Nike sneakers, CryptoKicks exploded in popularity and value upon release, fetching up to and over six figures in USD<\/a>\u00a0on online marketplace OpenSea. These customisable virtual sneakers can be kept within a buyer\u2019s account, or\u00a0worn by a user’s virtual avatar.\u00a0<\/span><\/p>\n

\"Genesis<\/a>

Two metaverse avatars standing on “Genesis Plaza” in Decentraland, a virtual world. Image – Wikipedia.<\/p><\/div>\n

Adidas<\/span><\/h3>\n

Even before Nike made the metaversal leap, another sneaker giant, Adidas\u2019, entered the NFT market with its \u201cInto the Metaverse\u201d NFT collection<\/a>. Within hours, Adidas minted (sold) more than US$22 million worth of streetwear-focused NFTs. They were designed in collaboration with Bored Ape Yacht Club, Punks Comics and GMoney.<\/span><\/p>\n

\"adidas<\/a>

Phase 1 of Adidas’ “Into the Metaverse” launch. Image – Adidas Originals\/OpenSea.<\/p><\/div>\n

\u201cInto the Metaverse\u201d (ITM) NFT owners are given exclusive access to physical Adidas products, such as an ITM hoodie and beanie. Following their extremely successful NFT launch, Adidas hinted on their website that \u201cthis is only the beginning.\u201d<\/span><\/p>\n

\"Adidas<\/a>

Adidas’ physical ITM Hoodie, exclusive to ITM NFT holders. Image – Adidas.<\/p><\/div>\n

Now, Adidas has taken their NFT venture a step further, releasing information about \u201cPhase 2\u201d of ITM. According to their website, once you \u201cburn\u201d your NFT (make it non-transferable, meaning it is permanently yours and you can no longer resell it) and claim your physical products, you will \u201creceive a Phase 2 NFT and advance to the next stage of the Into the Metaverse ecosystem\u201d. Clearly, Adidas has ambitious plans moving forward.<\/p>\n

Virtual tokens for a physical cause<\/strong><\/h2>\n

StockX<\/span><\/h3>\n

StockX approached the sneaker NFT game differently<\/a>. Rather than selling NFTs as standalone items, StockX\u2019s \u201cVault\u201d<\/a> linked their NFTs to physical shoes, making Vault NFTs a digital token of ownership of physical sneakers. Given that StockX is a secondary sneaker marketplace in which sneakers might be bought and resold multiple times, this concept makes perfect sense. For users who primarily use the StockX platform as a means of sneaker resale, this allows them to buy and resell\u00a0sneakers for a\u00a0profit without ever having to interact with the physical product itself.\u00a0<\/span><\/p>\n

\"StockX<\/a>

StockX’s initial lineup of Vault NFT Sneakers. Image – StockX.<\/p><\/div>\n

For users who are buying sneakers for the purpose of actually wearing or handling the physical product, they\u00a0can buy and burn the NFT (make it permanently theirs). Once the NFT is burnt, the physical sneakers will be shipped to them.<\/span><\/p>\n

StockX\u2019s system is still a work in progress, as many users are confused about how to price sneakers now that NFTs have entered the equation. Can sneakers now be sold for\u00a0higher prices on StockX\u2019s marketplace, or will the NFT simply reflect the\u00a0existing price of the physical sneakers? Some Vault NFTs strongly reflect their respective sneaker\u2019s real-world price, while some NFTs sell for thousands of dollars higher than their physical counterparts.<\/span><\/p>\n

This is further complicated by the fact that StockX\u2019s NFTs are entirely native to their own system, and thus lack the public sales record that common platforms such as OpenSea feature.<\/span><\/p>\n

\"StockX<\/a>

A StockX Nike Dunk Low Off-White Lot 50 Vault NFT representing ownership of a physical pair. As of time of writing, this last sold for $7,500. Image – StockX.<\/p><\/div>\n

Despite this, Vault NFTs have still met decent success, with some NFTs being resold for over $10,000.<\/span><\/p>\n

Cult&Rain<\/span><\/h3>\n

New York-based digital fashion brand Cult&Rain<\/a> began its foray into the meta-sneaker market in early 2022. Founded by George Yang, a fashion veteran who designed for global fashion brands, Cult&Rain sought to bring high-fashion into the metaverse. Cult&Rain\u2019s \u201cGenesis Drop\u201d<\/a> released two thousand 4K-animated NFTs, featuring five colourways and additional special skins designed by digital artists.<\/span><\/p>\n

\n

Our creative process starts with paper and pencil. <\/p>\n

C&R Studio's hand-drawn original concept design sketches of Model 01 Titan and Model 02 Atlas. <\/p>\n

We said luxury fashion and we meant it. <\/p>\n

Community
Culture
Quality#makecultrain<\/a> https:\/\/t.co\/O9gf5GizXf<\/a> pic.twitter.com\/TDfjXPKv04<\/a><\/p>\n

— Cult & Rain (@cultandrain) January 6, 2022<\/a><\/p><\/blockquote>\n