Myth of Money: Nike, Gucci, Dolce & Gabbana, Adidas, and Tiffany NFT sales surpass $260M
Welcome to this week’s edition of Myth of Money, a weekly newsletter on the digital asset markets read by 12,000+ investors.
Disclaimer: The following is not intended as investment advice. Do your research.
A new trend is forming with NFTs giving major brands new ways of interacting with their consumers spanning art, fashion, and gaming. Leading brands including Nike, Gucci, Dolce & Gabbana, Adidas, and Tiffany have amassed a combined $260 million worth of sales from NFTs. Nike’s NFT drops have amassed $185.3 million in revenue, with volumes in secondary markets approaching $1.3 billion.
In December 2021, the apparel giant, Nike, announced the acquisition of RTFKT Studios, which it calls “a leading brand that leverages cutting edge innovation to deliver next-generation collectibles that merge culture and gaming.” “This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming, and culture,” says John Donahoe, President and CEO of NIKE, Inc. as reported by Nike Newsroom.
Nike has been the most successful major brand with its NFT efforts.
The analysis further shows that Nike has received over $93 million in royalties, which are payments that compensate original NFT creators for the use of their virtual artworks in secondary marketplaces. The company’s NFT collection has made $93 million in primary sales volume and $92 million in secondary sales to date.
According to Ledger Insights,
Renowned luxury fashion house Gucci has partnered with digital character brand Superplastic to launch a SuperGucci non-fungible token (NFT) collection. The theme of the collection is centered around combining classic Gucci motifs and designs with SuperPlastic digital characters Janky & Guggimon. This is not Gucci’s first go at NFTs. Last year it auctioned a Gucci Aria NFT at Christie’s for $25,000, one of the most expensive items the brand has ever sold.
Gucci’s partner Superplastic is a startup aiming to create virtual characters – similar to Marvel – with an audience developed through social media. It is planning an NFT launch with the Bored Ape Yacht Club, raising a $20 million funding round last October.
Gucci's new NFT collection is only available to people who already own PFP NFTs, “Picture for Proof” profile pictures, like those made by Bored Ape or CryptoPunks.
Dolce & Gabbana has generated $25.6 million worth of NFT revenue. Tiffany, which only recently launched its NFTiff token allowing CryptoPunk holders to mint customized pendants, has amassed $12.6 million in NFT-related sales. Total NFT revenue for Gucci and Adidas was $11.6 million and $10.9 million, respectively.
What is an NFT?
NFTs allows you to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain. NFT stands for “non-fungible token,” and it can technically contain anything digital, including drawings, animated GIFs, songs, or items in video games. An NFT can either be one of a kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.
The Future of NFTs
The future of crypto adoption rests on two pillars - how well we can incorproate culture into Web3 products and the utilities we can create in this new world.
Brand are incorporating a range of utilities into their digital products through token gating and POAPs.
Token-gating is the process of locking experiences & content behind doors, which can only be opened if you hold the right token (the Web3 version of a paywall).
What this might look like in the future:
Secret landing page or unique products for your best customers
Exclusive IRL events which also airdrop you a POAP
Customizable content and marketing materials for different segments (no more A/B testing)
Generative tokens which evolve & unlock rewards as you collect more of them (i.e. gamification and tiering)
Interoperability of tokens & ability to cross-market to other communities (e.g. hold a Balenciaga NFT, get 20% off at Gucci)
Proof of Attendance / Proof of Behaviour
POAPs (Proof of Attendance Protocol) are - digital forms of record to document & evidence your attendance at some sort of event. It can be an IRL event like a football game or music concert, a URL event like an online conference, an in-game event or simply buying something digitally. POAPs are the new-age badge of honor. Having one in your wallet shows you’re (actively) part of a tribe, and lets you find your community.
Other utilities include:
Physical assets represented as NFTs
Digital assets represented as NFTs
Musical assets represented as NFTs
Movie productions represented as NFTs
Intangible assets as NFTs
Professional certificate as NFTs.
Personal records as NFTs
Social graphs as NFTs
How the NFT trend continues to develop remains to be seen. But one thing is clear - culture, brand and metaverse are all crucial ingredients for the next wave of adoption.
This Week By the Numbers 📈
Earlier this week, Federal Reserve Chairman Jerome Powell said in his speech to the central bankers and economists gathered at the base of the Grand Tetons, “Reducing inflation is likely to require a sustained period of below-trend growth”. He also added that “there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses”.
This hawkish rhetoric pushed the markets further into the red.
Top Stories 🗞️
The fight between the founders of defunct crypto hedge fund Three Arrows Capital and the court-appointed liquidators charged with unwinding their assets has reached Thailand. Su Zhu, who along with his co-founder Kyle Davies, has been evasive about his whereabouts since the spectacular collapse of their fund, delivered an affidavit in person in Bangkok on August 19, according to a notarized document seen by Bloomberg News. In the affidavit, Zhu accused the liquidators of misleading the High Court of Singapore about the hedge fund’s structure. “The joint liquidators strongly disagree with the positions set out in Su Zhu’s affidavit,” a statement provided by Teneo representatives said. The liquidators have filed responses to the Singapore court, according to the statement. They declined to comment on specific positions pending the court’s decision.
Cryptocurrency entrepreneur and Polygon founder Sandeep Nailwal have raised $50 million for a new startup fund dedicated to Web3 companies, underscoring venture capital’s growing interest in the blockchain-powered internet. Nailwal’s venture firm, Symbolic Capital, is backed by cryptocurrency protocols, exchanges, crypto-focused auditing firms, and other venture capital investors, the company disclosed Thursday. Symbolic’s fund has already invested in three blockchain-focused gaming startups: BlinkMoon, Planet Mojo, and Community Gaming. The initial funding received by these startups was not disclosed. In perhaps a new take on venture funding, Nailwal said his company is focused on supporting project founders from emerging markets. Like other crypto-focused VCs, Symbolic Capital is focused heavily on Web3 projects or solutions that will advance the decentralized internet. As reported by Cointelegraph, two Web3-focused funds were announced earlier this month — CoinFund launched a $300 million venture and Shima Capital debuted with a $200 million commitment.
On Tuesday, Ready Player Me (RPM), a startup that issues 3D avatars to be leveraged in the metaverse, announced that the firm has raised $56 million in a Series B funding round. The latest financing follows the company’s Series A announced in December 2021, when the team raised $13 million in a funding round led by Taavet+Sten. The Series B financing for $56 million was led by a16z, and other participants include Roblox co-founder David Baszucki, King Games co-founders Sebastian Knutsson and Riccardo Zacconi, Hartbeat Ventures, Punk6529, D’Amelio family, Snowfro, Collab Currency, Plural, and Konvoy Ventures. Twitch co-founder Justin Kan also participated in the RPM Series B. RPM CEO Timmu Tõke believes that cross-platform connectivity will be the key to unlocking the metaverse.
Snoop Dogg and Eminem will bring their Bored Ape Yacht Club (BAYC) NFTs to the VMAs this Sunday, performing from inside Yuga Labs’ upcoming metaverse game “Otherside.” The rap superstars will perform their song, “From the D to the LBC,” according to MTV and Yuga Labs. “Otherside” is still in development and does not yet have a confirmed release date. According to the company, the Web3 metaverse game is currently in “Phase 1,” meaning only owners of its Otherdeed land NFTs and select developers have been able to try out aspects of the MMORPG-inspired title. This VMA performance is yet another example of NFTs bleeding into mainstream culture. NFTs—unique blockchain tokens that signify ownership—have become digital status symbols for the rich and famous, and Bored Apes have been co-opted for everything from fast food restaurants to M&Ms. The promoters say Snoop and Eminem’s “Otherside” performance will be a never-before-seen experience.
Ghana has become the latest African country to begin testing the viability of its central bank-backed digital currency, the eCedi, heating up the race to roll out e-cash on the continent. South Africa and Ghana are now the only African countries at the pilot stage of the process after Nigeria launched the eNaira in October 2021. Ghana is testing an offline version of the eCedi in Sefwi Asafo, a small town in the country’s Western North Region, using a contactless smart card. eCedi is a retail Central Bank digital currency that can be used for payments between individuals and merchants through a digital wallet application. The Governor of the Bank of Ghana, Ernest Addison, has listed financial inclusion as its top objective and chose to test the eCedi in an area where there is little to no connectivity infrastructure.
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Thank you for reading this week’s edition of the Myth of Money.🚀
Until next week,
By Tatiana Koffman
Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I believe in empowerment closing the financial education gap and creating equal opportunity for the next generation. I have invested in 20+ companies and funds. Check out my portfolio here.
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