FEB. 27 MARKED the release of a trio of sneakers that looked a bit like doodled-on Air Force Ones—a collaboration between design studio Rtfkt and Fewocious, an 18-year-old digital artist living in Seattle. Listed respectively at $3,000, $5,000 and $10,000 the three chaotic designs, each slightly different, were sold during one seven-minute period. In total, 621 pairs were purchased, netting the equivalent of $3.1 million. In the current frenetic sneaker-collecting market, this rapid-fire exchange of money isn’t as shocking as it sounds. (A single pair of Air Jordans sold at auction for $615,000 in August.) What’s truly notable, however is that Rtfkt’s shoes can’t be worn. They can’t even be touched or held. At least not yet.
These virtual rainbow-colored sneakers were released digitally as NFTs or nonfungible tokens. The latest internet-based collecting craze, NFTs are digital art or collectibles that are authenticated or “minted” using blockchain technology and then purchased using cryptocurrencies such as Ethereum. A digital ledger, which anyone can access, tracks who owns a given NFT, and ensures that the NFT can’t be duplicated or tampered with. Owning an NFT does not mean you own the copyright to a given asset, but it does grant you bragging rights. And NFT sales can be staggering: Last week, net artist Mike Winkelmann, who goes by Beeple, sold a single digital collage through Christie’s for a record breaking $69.3 million to the Singaporean cryto fund Metapurse.
With all the money sloshing around the NFT market, it would seem like a natural playground for luxury industry players like Gucci, Saint Laurent or Prada, which have long sold costly, attention-grabbing goods. So far though, the roughly year-old company known as Rtfkt (an intentional misspelling of the word “artifact”) is the prominent player marketing NFT sneakers and now clothes. Its success could offer fashion companies a roadmap should they choose to wade into NFTs.
“Sneakers were the basic vehicle to start with,” because they were an existing asset class explained Benoit Pagotto, one of Rtfkt’s three founders. (In a very internet-age company structure, Mr. Pagotto is based in Paris, but his partners Chris Le and Steven Vasilev are located in Salt Lake City and Los Angeles, respectively.) Mr. Pagotto, who previously worked in the esports industry, noted that, in 2021, even teenagers know you can buy a new, hyped up sneaker such as an Adidas Yeezy Boost one day and sell it for serious profit the next.
That flippability of a sneaker applies even in the digital realm. Just a few weeks after their launch, some Fewocious “shoes” are trading for around double their launch price. And unlike the traditional auction market, each time the NFT is resold, Rtfkt receives a cut. This is a common practice in the market and makes NFTs even more enticing because on paper, creators can make money in perpetuity.