An Overview on the State of NFT Market

Louis Vuitton’s Treasure Trunk, Prada Timecapsule, Maison Margiela’s MetaTABI, Moncler & Adidas AI-based NFT Campaign and more: Are the NFTs still ruling or fading?

Technology in Fashion

20 May, 2024

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Non-fungible tokens (NFTs) are a digital experience that boomed in 2021. The phenomenon captured wider attention around the world. In 2021, the market was valued at a revenue of $21 billion. However, experts have stated that around 95% of the NFTs are worthless now. This drop is driven by various factors such as economic shifts, failure among big players, market saturation, and many more.

Rise of NFTs

The introduction of NFTs started when blockchain and cryptocurrency technology were created. NFts acted as a digital concept that guided us on how we see digital ownership. They are digital tokens, generally purchased with cryptocurrency to represent the ownership of a specific product.

It was Adidas that introduced this phenomenon to the Fashion industry. The brand launched the NFT collection in Metaverse in December 2021. The digital collection is the largest web3 project that a fashion and/or footwear company has taken at that time. It sold 30K tokens in a few hours at a starting rate of $800 for a token. But now, one can buy an NFT token for $260 on OpenSea, the famous NFT marketplace. In December 2019, Prada launched Prada Timecapsule collection which was then renewed to monthly NFT drops. Moncler entered the NFT market in 2022 with the 500 limited-edition Maya down jacket.
Nars Cosmetics released the pioneer beauty brand-based NFTs in 2021. Givenchy Parfums was the first beauty brand to launch an NFT, named Pride, to show its support to the LGBTQIA+ community during pride month. Yves Saint Laurent Beauté dropped its NFT blocks for the first time in June 2022.

NFTs can be differentiated from one another with their unique code verified by blockchain technology. This technology has helped consumers and brands to transact and transfer the ownership of NFT. With this transparent and immutable nature, the authenticity of the product is assured. Labels including Louis Vuitton, Dolce & Gabbana, Gucci, Dior, and Prada used NFTs to authenticate their products and avoid counterfeiting. Dolce & Gabbana’s Collezione Genesi sold around 6 million phygital NFTs as of February 2022. The collection was auctioned off for $5,7 million.

The brands also collaborated with NFT artists and creators to launch collections. Louis Vuitton, Burberry, and many other labels have partnered with NFT-only companies such as The Fabricant, RSTLSS, and RTFKT.

Fall of NFTs

NFTs took a fall at the same pace they went up. The phenomenon was rising exponentially due to the higher inflation, compact monetary policy, and interest rates during the pandemic. After the end of the post-pandemic lifestyle, the NFT market began to show downturns due to various reasons. During the initial days, the investors were drawn to the market due to its several features, including digital authenticity, high selling point, and quick returns among others. This excitement was gradually saturated due to an overwhelming creation of NFTs and the comeback of old economic spending in supply and demand.

One classic example is the investors’ lawsuit against Yuga Labs for the financial loss faced due to Bored Ape Yacht Club NFTs and ApeCoin tokens. They sighted the misleading promotion through the endorsements by celebrities including Jimmy Fallon, Paris Hilton, Justin Beiber, and Madonna, who were labeled as plaintiffs in this class-action lawsuit.