[Research] Nike and RTFKT
Web2 meets Web3 companies
Nike’s “Cryptokicks”
In December 2019, the US Patent and Trademark Office issued Nike a patent for a blockchain-compatible sneaker called “CryptoKicks”. The patent covers a system for attaching encrypted digital assets to physical products.
The patent explains “When someone purchases a pair of Cryptokicks, they also receive a digital asset tied to the unique identification number of the shoe, and because the digital asset is tied to a physical shoe, there is a digital scarcity of the digital asset.”
This means that when you buy a product, there is a corresponding digital asset, so even if you can perfectly counterfeit the physical product, if you can’t prove ownership of the digital asset, you’ll know it’s a replica. This is how Nike hopes to solve the problem of authenticity, where the ownership and authenticity of a sneaker can be verified, through blockchain.
Nike and RTFKT
Then, in December 2021, Nike acquired NFT studio artifact, RTFKT. Founded in January 2020, RTFKT was growing into a unique brand by leveraging the latest game engines, NFTs, and augmented reality to create a series of unique virtual products, including a cyber sneaker that composited a photo of Elon Musk, a MetaPigeon NFT in collaboration with Jeff Stable that created the Pigeon Dunk, and a Clone Axe with Takashi Murakami.
With the acquisition of RTFKT complete, Nike is in full swing, utilizing NFTs to expand the Nike metaverse. Starting with a Clone X airdrop for MetaPigeon holders, they’re dropping “Space pods” and “Monoliths” (MNLTH) for Clone X holders. The Monoliths, in particular, have increased engagement by requiring the community to work together to crack quests to see what’s inside. A pod is a personal space in the metaverse that you can decorate by placing your own NFTs in it, and you can also expand the space by stitching together the pods you have.
Space Pod holders then receive a Loot pod, a private space in the Metaverse, and Monolith holders receive a Nike Dunk Genesis, a basic Nike Dunk sneaker, a Vial of skin that can be attached to it to customize Nike Dunk sneaker with unique patterns, and a Monolith 2 (MNLTH2).
Monolith 2 holders were then airdropped the Trillium Lace Engine, and holders of that NFT were given the opportunity to mint and forge Cryptokicks iRL sneaker NFTs.
*Forging means claiming a product offered by RTFKT for a specific period of time, and unlike Redeem, the NFTs are not burned but linked to a physical product to determine ownership and authenticity.
As a Web3 company, RTFKT has a strong understanding of community. Through a series of steps leading to Metapizone, Clonex, Spacepod, and Cryptokix, they’ve been expanding their own metaverse one by one, while providing tangible rewards and incentives to the community, fostering loyalty among ecosystem participants.
However, relatively recently, they have exhibited some puzzling behavior. Since they initially offered RTFKT NFT holders the right to purchase Monolith NFTs, many people thought that Monolith holders would be rewarded for their loyalty by receiving priority access to CryptoKicks. However, this was not the case, and there was a lot of backlash from the community on Twitter.
On top of that, most RTFKT NFT holders had to pay the full price of the sneakers. While Monolith 2 holders were able to purchase a $500 pair of sneakers at a 30% discount, Monolith had initially skyrocketed to $30,000, so most holders were not expected to pay for the sneakers.
Another issue was not being upfront about geographical restrictions. It was announced on Twitter that IRL shoes were not available outside of the U.S. due to regulations, and RTFKT subsequently resolved the issue by allowing shipping from the U.S. to Europe through a forwarding service.
Conclusion
In addition to the aforementioned incidents, there have been allegations of discrimination against RTFKT NFT holders, Monolith holders and Clone X holders respectively, but Cryptokicks is certainly a great example of the potential for NFT technology to be applied in the real world. Late last year, the company dropped the next step in the Monolith series, the Monolith X, and although there are no details yet, it is said that it will continue to expand the metaverse by evolving NFTs through skin vials and the like, and acquiring new sneakers through combinations. Also, although Nike and RTFKT started in Web2 and Web3 respectively, they have a good understanding of their respective fields, so I think they will show good synergy based on this.
Laboon Space
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