In recent years, the market for collector shoes has exploded. Until recently, the market for NFTs, or nonfungible tokens, which serve as digital certificates of ownership for works of art, tattoo designs, and virtual real estate, has been similarly stagnant.
The two hypebeast marketplaces were only a matter of time until they clashed.
In April, Nike introduced Cryptokicks, their first line of virtual shoes, which included 20,000 NFTs, including one designed by Takashi Murakami that was purchased for $134,000 by AliSajwani.
“The physics of NFTs and shoes are quite similar,” said Jurgen Alker, who manages Highsnobiety’s NFT studio. “Both are based on the concept of scarcity and drops. It’s about belonging to a group, having a certain position, and having a sense of belonging.”
This is Nike’s first foray into the sector, as well as its first collaboration with RTFKT (pronounced “artifact”), a business it acquired in December that had sparked a virtual-shoes market.
Other shoe behemoths have also joined in on the action. Last December, Adidas unveiled the Into the Metaverse NFT collection, which featured limited-edition streetwear such as hoodies and tracksuits (but no sneakers). According to The Verge, it was effectively a digital drop for NFT-savvy Adidas collectors and made more than $22 million in the first afternoon, thanks to a cooperation with the Bored Ape Yacht Club, Punks Comic, and crypto evangelist GMoney.
Asics, a Japanese sports brand, has collaborated with STEPN, a fitness program that awards runners with cryptocurrency for each step they take, to make 1,000 NFT sneakers (think of it as a combination of Pokemon GO and Strava). According to Yawn Rong, one of the creators of STEPN, the virtual sneaker may be worn in the app and has “gamification” elements such as sneaker levels, shoe-minting, and NFT personalization.
In some ways, virtual sneakers are comparable to the actual thing in terms of bragging rights. Collectors can post them on social media or on NFT exchanges like OpenSea to show off their collections.
Skeptics, on the other hand, say that NFT shoes are nothing more than a cynical cash grab by manufacturers and investors seeking for a fast buck.
“It only makes sense to do away with the actual product after shoes became a commodity and were being bought and sold by individuals who didn’t really care about the sneaker itself,” said Russ Bengtson, a former Complex editor who is producing a book on sneakers. “However, a lot of individuals still prefer to show them off on their feet rather than on social media.” Sneaker NFTs serve no function for us. I don’t want an NFT burger if I’m hungry.”
So, what exactly do buyers of Nike Cryptokicks get? It’s a little unclear.
The launch was cloaked in secrecy. RTFKT issued 20,000 NFTs of a strange box dubbed MNLTH (pronounced “monolith”) in February (vowels, apparently, are for noobs in the NFT world). The Nike Swoosh and RTFKT’s lightning bolt emblem were the only clues as to what was inside.
According to Joe Chui, 39, an NFT analyst in San Francisco who runs the YouTube channel RealTalkFIRE and who received two, 8,100 persons who possessed an NFT from one of RTFKT’s earlier collections acquired an MNLTH at no additional cost. On OpenSea, anybody could buy one for 5 Ether (about $15,000 at the time), despite no one knew what was inside. (Nike has declined to comment on many occasions.)
That didn’t stop Bryson Honjo, 31, of Honolulu, who runs the UntiedHawaii YouTube sneaker channel, from buying two MNLTH boxes for 5 Ether each. Mr. Honjo stated, “You have to think that this is going to be another groundbreaking sneaker, similar to the 1985 Air Jordan 1.”
After months of conjecture, Nike stated on Twitter, Discord, and other social media platforms on April 22 that owners may connect their crypto wallets, where the NFTs were housed, to the RTFKT site and “open” their boxes, according to Mr. Chui.
Inside, owners discovered a digital representation of a Nike Dunk Genesis Cryptokick basketball shoe, as well as a virtual “skin vial”— a luminous canister that, when put into a port on the virtual sneaker’s tongue, gives the shoe its final look.
Their secondary market worth fluctuates greatly depending on rarity. There are 5,661 Human vials available on OpenSea as of this writing, with a floor price of 0.59 Ether (about $1,154, but crypto values have been dramatically shifting). Only 18 Alien vials are available, with a starting price of 90 Ether (about $176,000).
For the time being, the Cryptokicks are only available in digital format, which may be viewed on OpenSea or the RTFKT website. Owners, on the other hand, are hoping to be able to customize them when new skins are produced, as well as wear them in online games and the metaverse.
Mr. Alker of Highsnobiety remarked, “It will be big if Nike can bring their NFT footwear into games like Fortnite or GTA6,” alluding to Grand Theft Auto VI. “Then you can flaunt your footwear in sports, not only on the street,” says the author.
Others hope to be able to exchange their NFTs for a tangible copy. For Mr. Honjo, though, a tangible version is almost irrelevant.