The NFTY News tracks the ever-evolving narrative of how the mainstream will enter crypto through user applications. In each edition I explore non-fungible tokens, dApps, and the ecosystem affecting consumer crypto applications.
Last week, Nike released Travis Scott x Air Jordan 1s on their SNKRs app but an uproar ensued when consumers had trouble processing their payment. 100Thieves, an esports team, also released their newest streetwear and it was sold out in five minutes. This isn’t anything new - the same thing happens with event tickets. Brokers use bots to buy up tickets and sell them on a premium on secondary markets.
As craiglist continues to become unbundled, consumers are buying as much as the supply as possible just to re-sell on a secondary market. The trend of drastically limiting physical supply and driving FOMO with conspicuous consumption is only increasing as software becomes infinitely abundant. Suppliers and content creators are looking elsewhere to enforce scarcity.
The playbook is always the same:
Content creator announces a time for limited supply product to be released
Consumers rush to purchase the product at a fixed cost, often causing servers to break down
Consumers often feel frustrated with the content creator or purchase on a secondary market
Blockchains offer a new mechanism for distributing physical goods by turning them into redeemable tokens. Over the course of New York Blockchain Week, there’s been three different typer of experiments that played out.
There’s been one interesting interesting experiment on Ethereum reinventing the model: Unisocks.
Uniswap 🦄@UniswapExchange🧦 Announcing Unisocks - a limited edition, dynamically priced sock!!! Now purchasable on https://t.co/fJv6jrJwCL https://t.co/KnUfPprvj7
The price of a token that can be redeemed for a pair of socks started around $12 and are tied to a price curve. Only 500 pairs of socks will ever exist. Users can buy a token and sell it back at any time, before the tokens even exist.
This is not only a clever way to crowdfund physical goods, but it also represents a large opportunity for influencers to have optimal price discovery.
One of the other interesting experiments during New York Blockchain Week was the auctioning of Iridescence, a digital fashion collectible. The digital clothing itself was sold at $9,500. The major piece of this event was that this is the first time we’re saying a token representing the blending of physical reality & digital utility. The clothing can be displayed on the owner on Instagram for one photo, while simultaneously being used and programmable in digital realities by third-party developers (because it is an NFT).
I suspect that you’ll start to see more experiments being done with digital luxurious goods. Interoperability & Scarcity are positively correlated - if something is more scarce, it will be used and carefully programmed in ways more than one, similar to many physically scarce resources today.
Last week the Weird-eth.auction took place. It experimented with a new way to auction a unique item.
Here’s how it worked:
1) users bid on 1 ETH, starting the bid at .001 ETH.
2) If a user bid, the time would extend by 6 hours.
3) The second highest bidder will lose the amount they bid, but all those who bid but did not win would be refunded.
Overall, the experiment didn’t seem to take off, but it’s a showcase of what’s possible with new models to auction items. I’d love to see some element of FOMO3D added to this model - the minimum bid should increase with some fees being paid out to those who bid before. I wonder how a model like this would play out with physical goods.
We should keep an eye on new distribution mechanisms as physical consumer goods and media starts to leverage blockchain.
Disclaimer: I work on helping create a world of infinite possibility at Dapper Labs. All opinions are my own and don’t represent the opinions of Dapper Labs.