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Here’s what’s in the closet of the future. A few pairs of sneakers, obviously. Maybe a hoodie. A watch. And—why not?—a pair of metallic-looking pants. This being the future, none of the clothes are real. Nonetheless, they cost $147,000.
This sounds like a joke, but the closet I’ve just described is available for purchase now, with the clothes taking the form of non-fungible tokens, or NFTs. You may have heard that NFTs are everywhere, a new asset class embraced by traditional auction houses and cryptocurrency disrupters alike. An artwork from Beeple sold for $69 million, a tweet from Jack Dorsey was “minted” as an NFT and went for $2.9 million, and Michael Jordan joined a group of investors sinking $305 million into the digital NBA marketplace Top Shot, which sells...the same highlights you can find on YouTube for free. NFTs are, for now, a big deal. But does fashion, a category so reliant on the things we physically wear, have a future in this space?
Benoit Pagotto, Chris Le, and Steven Vasilev all think so. In 2020, they founded Rtfkt, which is sort of like a sneaker brand, except its shoes exist only in a digital world. It has quickly become the most prominent seller of NFT sneakers. The trio started seriously working on the business after making Pagotto’s League of Legends character a custom pair of sneakers for the 2018 World Cup. Pagotto lost in the finals, but came away with something much more important. Everyone was asking him about the shoes. How could they get a pair? The three realized they had a proper business on their hands and started on work “to really create the brand of the future,” says Pagotto. A future where shoppers care more about their digital possessions than their physical ones.
It’s not quite as crazy as it sounds. A recent drop with an artist named Fewocious featured three pairs of sneakers priced at $3,000, $5,000, and $10,000. In just seven minutes, users purchased $3.1 million worth of them.
On the surface, the virtual world feels like an inhospitable place for fashion, which is firmly rooted in the physical world: a T-shirt that fits just right, the nylon pants that swish-swish with each step, the sneakers you wear out to impress friends. But that hasn’t stopped brands from trying to turn digital fashion into a thing. Tribute makes high-tech looking glossy fashion it calls “cyber garments,” and which look like a hard-earned upgrade in a video game. Overpriced focuses on hoodies—and, true to its name, sells them for $26,000. CryptoKickers is “designing footwear for the New World,” and has signed up former NBA player Wilson Chandler to be the face of the brand. There are watches, too: from brands like Jacob & Co, which sold its first NFT piece at auction for $100,000, and Vault. Your digital closet is filling up quickly.
The rush on cyber garms has a lot to do with the broader popularity of NFTs. Proof of ownership is the central tenet of NFTs: each product comes with a unique identification number that tracks ownership indefinitely. “People are still not used to [the fact that] digital goods come with a certain price,” says Gala Marija Vrbanic, a co-founder of Tribute. “This is mostly because they can't touch or experience those pieces in the real world, so they don't feel like they own them. NFTs have managed to succeed in giving the people this ownership feeling.” (This structure behooves creators, too, who receive a percentage of each subsequent sale of an NFT—meaning when one of Rtfkt’s sneakers resell, the brand gets 10% of the revenue.)
Brands selling NFT fashion are hoping to seep into every nook and cranny of the digital world to combat their limitations in the physical one. Tribute, for instance, provides a digital avatar for everyone who purchases a piece of their clothing. That way, the buyer can then “wear” their new piece. Marija Vrbanic says many of Tribute’s customers want this digital version of themselves as much as the clothes. “At the moment, the most appealing thing about NFTs to most people is their collectible character,” she says. Rtfkt sneakers, meanwhile, can be ported over to owners’ characters in video games like Decentraland. Overpriced sends buyers a physical replica with a scannable code that corresponds to their NFT. Rtfkt, similarly, hired two people away from shoe brand Clarks to help make physical versions of their shoes for people who purchased the NFT. Mark Schwarz, who makes NFT watches with his brand Vault, says he hopes to see future editions embedded into Grand Theft Auto games.
Rtfkt’s founders argue that a new generation of customers will buy NFTs because their digital personas are just as important as their physical ones—not just to play video games, but to clothe their digital selves. There is some evidence to back up the idea that the digital clothing market is massive. Some estimates put the market for “skins,” or new outfits for digital avatars in games like Fortnite, in the neighborhood of $40 billion annually. Rtfkt’s Chris Le was originally a skins creator for video game Counter Strike.
It might seem strange to buy a watch you can never wear. But how often do sneakerheads actually wear their sneakers?. “Most of my friends who are sneakerheads aren’t actually wearing their sneakers,” says John Crain, the co-founder of digital art marketplace SuperRare. ”What do they do with their sneakers? They post pictures up on Instagram and then they go into a closet. The value of the sneaker is in its digital cache.” In that case, NFTs only makes this process easier, and buyers no longer have to deal with the annoyance of shipping, storing, and praying they’re actually getting the real deal when they buy an expensive shoe online.
But the real potential of NFTs might not be realized for some time. Nearly everyone I spoke to insisted that NFT fashion won’t quite click until augmented reality takes hold in a real way. Tech like Google Glass, or Snapchat Spectacles, can turn your regular outfit into a digitally-enhanced one. “Now your sneakers can be animated,” Le says. “They can have flames flying out of it, magic effects and all that. How can you compete against that with physical shoes?” Of course, this premise relies on a majority of the population wearing a technology that’s failed to catch on for years.
Being able to buy a digital hoodie from your favorite luxury brand might help speed widespread adoption, too. For now, though, the brands with names you recognize have mostly sat out of the rush on NFTs. However, their absence has more to do with a longer ramp-up period than disinterest. Gucci has dipped its toes into the virtual fashion space with digital sneakers that buyers can play around with inside an app—but a source with the brand tells Vogue that “it’s only a matter of time” before it releases a true NFT. (A real NFT can bounce around the virtual world, while Gucci’s current product is limited to its app.) Nike trademarked a platform for NFTs called “CryptoKicks” in 2019 but it remains a placeholder for now, the Wall Street Journal reports. Vogue also confirms that several other Gucci-level brands are working on releasing NFTs, too.
Even without conglomerate participation, fashion NFTs are raking in a breathtaking amount of money. Part of this, Crain says, is due to a new crop of wealthy Bitcoin investors who need to spend their money somewhere. The most zealous investors see something bigger, though: the chance to own a piece of history. “All of these items we're creating right now will be part of the OG history of the crypto scene and crypto movement that's going to revolutionize everything,” says Pagotto. Collectors may see buying a pair of Rtfkt sneakers today as the equivalent of copping a pair of Air Jordan 1s in 1985—they believe they’re buying something bigger than a virtual pair of shoes. “History is being made daily,” Pagotto claims. As the old saying goes: if the digital shoe fits...
