Big brands like Adidas and Nike are betting on non-fungible tokens (NFTs) to build their brand in the cyberland, drive sales, and potentially generate millions of dollars in revenue. One of the biggest NFT collections, The Bored Ape Yacht Club, has already begun its partnership with Adidas and Nike with the intent of obtaining RTFKT (pronounced “artifact”).
RTFKT is a cryptocurrency project that aims to fuse blockchain technology with fashion and the sneaker culture.
Non-fungible tokens are making a buzz around the world. If you are among those who aren’t taking a step ahead to the metaverse and aren’t taking digital ownership of goods seriously— today is probably the best time to start.
Kicked off with digital artists that sell cat and monkey crafts, the NFT space has spiraled into powerful companies and brands. Even the professional basketball league, NBA, has thrown their hats into the ring.
And though many investors and entrepreneurs are still skeptical about this new business model, more and more big companies are venturing into the NFT industry.
Nike and Adidas NFT Venture
Recently, Nike and Adidas announced an upcoming NFT project of their own.
Adidas named their collection Into the Metaverse, which gives holders the privilege to access exclusive Adidas mech in real life and digital goodies. They launched a collection of 30,000 items that were worth 0.2 ETH (about $700) during the initial digital sale in December 2021 and insanely sold out within a few minutes. The successful launch made Adidas $22 million in less than a day.
On the flip side, Nike acquired RTFKT, which specializes in digital sneakers, to grow their program in the cyber world. Nike is yet to launch a project, but the clear success that will follow their launch is obvious through their partnership with RTFKT, whose artists always sold out in just a span of minutes.
Before we jump right into why companies are diving into NFT pools, let’s have a brief overview of what NFTs are.
What are NFTs?
Technically, non-fungible tokens are units of unique data that are stored within a blockchain platform— for instance, Ethereum. The data within the platform cannot be replicated, ensuring that the uniqueness and ownership of the NFT are secured.
Links and other digital information can be stored within non-fungible tokens, which lets them be associated with virtual and physical assets. To tell you frankly, most NFTs that are being released today have little to no actual value. It’s the people that make it valuable.
Are you familiar with the word FOMO or Fear of Missing Out? This is the term that describes the frustration of having everyone around you cling to a particular hype, and you’re not on it. Because of this, many people do anything to follow the latest trends and hypes.
Of course, we are not saying that NFTs are just a fad, but there’s no denying that a healthy dose of FOMO plays a role in their popularity.
What makes an NFT more valuable than the other is scarcity. Scarcity may perhaps be the reason why beanie babies, which is just a good-for-nothing stuffed toy, get sold for hundreds and even thousands of dollars.
People love collecting items that scream status, brand, and recognition, so a lot of people go crazy whenever they hear the word limited edition. A value of an item drives up to an astronomical level whenever scarcity is involved, regardless of whether the item truly has an actual value or not.
Companies have found their next golden goose, taking the psychology of collecting into consideration.
Biggest Brands with NFT Projects
Adidas and Nike aren’t alone in their venture into the digital world. In fact, many companies had already gained ground in the NFT space before they did. Here are the big-time businesses that have already made NFT pushes:
NBA
National Basketball Association (NBA) earned big with their NBA Top Shop NFT project, an NBA-themed NFT marketplace. The Top Shot project was launched in partnership with Dapper Labs. It features teams, players, and footage from past or recent memorable plays.
At the time of writing, this NFT project has grossed over $230 million in sales.
Prada and Adidas
Italian luxury fashion house Prada has teamed up with Adidas to launch an NFT project in the Polygon platform. The digital artist assigned to this is Zach Lieberman, and the waitlist opened up on the 24th of January 2022.
Mattel
Mattel, a toy manufacturing company, is another company that gets on the bandwagon. They recently rolled out hot wheels NFT collectibles. Each token possesses an animated design of their famous toy cars, and some of these items are inclusive of redeemable physical collectibles.
Asics
Nike and Adidas aren’t the only sneakers manufacturer that got captivated by the potential of non-fungible tokens. Asics also embarked into the NFT space with their Asics Sunrise Red collection.
Asics kicked off an auction back in July 2021 with 189 NFT pieces that are based on nine footwear models. The average price of the collection is around $2,000.
Aside from these four companies, a great number of big companies have plans to venture into the NFT space, and more are expected to come.
NFT Pushback
Many people are still skeptical of non-fungible tokens and are not buying the NFT craze. One particular industry is seeing pushback from their customers about the implementation of NFTs— the gaming industry.
Gaming company giants such as Square Enix, Electronic Arts, and Sega is intrigued by non-fungible tokens, but they have seen other companies take the downhill.
Ubisoft, a gaming company that is known for its Assassin’s Creed and Far Cry game franchises, announced their interest in joining the NFT space through their Ubisoft Quartz Project. This project will offer unique in-game items as NFT.
However, many gamers didn’t like the idea and talked about how they detested it in their community, and this made Sega overturn its NFT plans. On the other hand, Ubisoft holds firm to their belief that “NFTs was a major change that would take time.”
Although the adoption of NFT items in the gaming space is still in its infancy, it’s very far-fetched that its introduction to the NFT space will be put to a halt whether gamers like it or not.
NFTs are undoubtedly here to stay and will surely evolve in time. Big brand projects and collaborations will follow suit one after the other, and as the hype grows around these projects, so will the profit opportunities. If you’re suspicious about how you can earn money from this business, here are some weird NFT projects that took off even with its insane nature:
- Digital toilet paper
- Digital fragrance
- Digital dog stick
- Fart NFT
- NFT-oriented articles
NFT is a cool business model that can drive good commercial returns. It will be worthwhile to learn and dive deep into its nature and its economics.
Keep in mind that investing in non-fungible tokens is sizably a personal decision. So, always hold your emotions in check and avoid making crucial investment decisions just because anyone else tells you to do so. It might be worth considering if you have money to spare, though.
That being said, NFTs are comparable to other investment opportunities. You have to do thorough research and understand the risk that will come along with your prospect venture. Always roll out with a healthy dose of caution.
