The new brand factories of the Metaverse

Whether it’s lockdown-induced wanderlust, the rise and rise of the NFT market or simply a realisation that the future is now, suddenly the media is buzzing with the possibilities of the Metaverse, and investors and corporations are following suit.

While real estate in virtual worlds is red hot at the moment, the land grab that is going on is being matched by a brand grab, as more established fashion names move into the space.

At Boson Protocol, we have written before about how seamless interaction between the digital and physical worlds is providing one of the foundations for decentralized commerce (dCommerce) in these new worlds. We have also noted that brands including Nike (Fortnite) and Louis Vuitton (League of Legends) are beginning to make their mark in the Metaverse, obviously mindful of first-mover advantage.

Brand identity and emotional connection

In recent years, there has been much research on brands and identity, and how we make emotional connections with the products we consume. In a world where our digital identity and our physical presence are increasingly intertwined, brand identity is becoming ever more important.

When we identify with a brand, we are signalling not simply that we like the design and colour of a T-shirt or a pair of sneakers: we are implicitly aligning ourselves with the brand’s values and creating a relationship based on our ideas of what it represents. The adoption of a fashion label by a group of people who do not share our values may cause us to abandon a particular brand in favour of one which seems more aligned with our self-image.

While the major fashion houses will continue to dominate the physical and digital landscape, decentralization is beginning to make inroads.

MetaFactory is one of the most interesting ideas in the digital-physical space, with an emphasis on community governance, operating: “at the intersection of community, culture and finance. It is the bridge through which online experiences and identities connect to the physical world via unique apparel and brand experiences that are designed, curated and owned by the community.”

These ‘brand factories’ have been designed to cure the misalignment of incentives between consumers and producers, blurring the boundaries of customer and manufacturer. Brand factories are entirely decentralized organizations that promote the collective management of a brand, allowing creators to monetise their ideas while buyers can sell their tokens on secondary markets or even collateralize their tokens.

Digital-physical twins

Meanwhile, Metafactory’s NFT — which doubles as a unique digital wearable in a virtual world like CryptoVoxels — is linked to the physical item by a silicon chip embedded in the clothing.

The streetwear produced so far under the MetaFactory name has been created in partnership with top artists and projects in the crypto industry, such as Twisted Vacancy, Van and Alotta Money, and Skeenee, recently featured in the Long The Metaverse session at Consensus.

The crypto community is about brands as much as it is about finance — especially in DeFi, with the strength of a token’s meme game contributing heavily towards its success. No surprise, then, to see that MetaFactory’s 100 limited-edition $SUSHI hoodies sold out in just 20 minutes. And they are not just about wearables: this custom PS5 was recently auctioned on NiftyGateway for $20,000.

Redefining commerce

In this revolutionary new world where all kinds of boundaries are blurring — between virtual worlds and the physical realm, between art, culture and finance, between geographical borders, and between creators and consumers — organizations such as MetaFactory are redefining our ideas about commerce, capitalism and what it means to be a human in the 21st century.

Community-owned culture studios enabled by cryptocurrency primitives are the new frontier of street fashion, whether those streets are the literal sidewalks of New York, London, Mumbai or Berlin, or the ethereal plazas of Decentraland or CryptoVoxels. Collective curation and governance is designed as an antidote to the extractionary nature of large commerce monopolies — and this is what makes Boson Protocol such a great fit for these brand factories, which are built around a far more creative and equitable model.

For example, as a platform, MetaFactory provides creators, designers and brands with services such as product marketing planning and management, promotion of auctions and stimulating community support, product production and fulfillment, while allowing its partners to focus on their own product design.

Reducing fashion wastage

Excess products and waste are huge problems for the legacy fashion industry: suppliers have to guess at how much stock is needed and how popular certain products will be — and this means that unsold stock has to be disposed of. Some fashion brands have been criticised in the past for burning their excess product, rather than allow it to be worn by the ‘undeserving’ public. This can be seen as a function of imperfect markets, and imperfect price discovery.

In contrast, MetaFactory’s brand factories can detect the acceptance of the market by selling tokens before the physical product is officially put into production. Similarly, token transaction prices in the secondary market can provide another revenue stream for producers who would otherwise not make any money from secondary sales. These advantages of waste reduction, advance payment and overall risk mitigation are all huge improvements on the existing system.

Boson Protocol’s commitment tokens — allowing for the practically atomic exchange of anyThing, whether that Thing is digital, physical or both — are perfect for MetaFactory’s brand factory model, allowing individual creators to commit to the production and shipping of the final product, and providing an extra layer of assurance that new creators can be trusted to deliver.

While there is undoubtedly a place for established, high-end fashion brands in our virtual future, the twin processes of unbundling and decentralization are a huge evolutionary shift that have the potential to dramatically change the way we interact — and dress — in the Metaverse.

Let’s build an open tokenized economy together.

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