The following is an unedited stream of thought that I had in regards to future consumer demands with respect to crypto, fashion, NFTs, etc. Reach out to me on Twitter @alinedxyz, if you have ideas or suggestions!
Product
A vertically integrated online shop and peer-to-peer marketplace for Web3 related merchandise/apparel across the spectrum of physical, digi-physical, and metaverse.
Thesis
Within the web3 world, communities dedicated to DeFi protocols, digital art collections, and the crypto space, in general, are growing extremely fast and are extremely sticky. Sticky as in they have extremely passionate individuals that form cult-like associations. It’s inevitable that these communities will want apparel and merchandise that reflects their interest in these projects and the ideologies + memelogy associated. There are very few producers of web3 related apparel/merchandise, and thus there is more than enough room in the market to produce high quality, limited edition apparel with branding conscious of rabid communities, popular memes, and general crypto culture. This traditional online storefront for physical apparel will serve to test the markets to see if there is enough demand, to generate revenue to bootstrap the rest of the operation, and most importantly to build a reputation within the community.
An online storefront offering basic apparel catered toward the crypto community is great for the reasons aforementioned, but the advent of digital/digitized art and NFTs allows for much more. NFTs are tokens that represent ownership of unique digital assets. The NFT market is mostly centered around art, and art in a sociocultural context is mostly a psychological phenomenon. Here are some observations I see that pertain to its psychology.
- Individuals collect NFTs in order to associate with respective communities, but also to display their individual interests.
- NFTs are rapidly entering mainstream culture as a result of fast growing fomo induced communities centered around popular art projects and celebrity endorsement of said projects. (ex. BAYC, Cryptopunks, ArtBlocks, Axie Infinity)
- There’s an ever increasing movement to connect the digital and physical world. (This can be extended to NFTs + physical apparel)
With respect to the third point, the movement to connect the digital and physical world can be extended with NFTs and physical apparel. Currently, there is no way for an individual to represent the intangible digital assets they own in the physical medium in a way that is streamlined for the average consumer. We envision a way for individuals to display the digital assets they own in the physical world on mediums such as common apparel, where creativity of the design can fully be controlled by the owner of the digital artwork, and for production of such digi-physical goods to be scalable. We believe the key component with respect to the above idea is verifiable proof that the owner indeed has ownership of the physical good and that the physical good can be verified as authentic. Lastly, with respect to this idea, we envision a way for people to trade these digi-physical goods in a way where user experience is maximally seamless and ownership transaction history is recorded on-chain.
Here we propose a platform that allows for people to use their NFTs and mint physical clothing with their digital art displayed and an on-chain marketplace that allows for people to buy/sell/trade the ownership of said clothing. A brief overview of the implementation can be found below.
With the connection of physical to digital, owners must be able to prove that they actually own the item and that the item they own is authentic. We will call these two concepts proof of ownership and proof of authenticity. Proof of ownership of a digital asset is as simple as looking up the associated NFT since transaction history is recorded on the blockchain. Proof of authenticity of a digital asset is trivial as the token is linked to a link of the digital asset and this link can be easily queried. When crossing over to the physical chasm, proof of ownership is relatively the same as it utilizes the same mechanism of linking to a digital twin in the form of an NFT, whereby ownership and transaction history can be queried on the blockchain. Proof of authenticity is slightly more complicated as the connection of the physical good to it’s digital twin must be non-replicable, incorruptible, immutable.
To continue from the above, the physical item must have a secure method to prove the linkage of the item to its digital twin. One solution involves a custom programmed NFC chip that is attached to the physical item. The NFC chip would have uuid + digital signature encoded in it or a link to a uuid + digital signature. When scanned the NFC chip would be able to transmit this information to the phone. The private key would be stored on our end, and using the private key to decrypt the digital signature, if it yields the uuid would result in a verifiable match. Other means of cryptographic verification may apply here. This NFC chip should be present in an easily accessible and scannable area while maintaining concern for design and minimalism.
Implementation of the NFT + physical apparel marketplace requires much more thought. A few questions that should be asked include, is it possible to implement a decentralized scalable exchange of NFTs + physical apparel? What will the transfership process look like? How can fraud be prevented? I will be expanding more on this in another article, as it requires much more writing.
Lastly, one paradigm of the web3 world is this concept of the metaverse, which is a very loosely defined term to describe an interconnected digital world. It’s very possible that NFTs will serve as a trusted base layer of digital good ownership/transfership in this interconnected digital world. Assuming that there will be a standardized format for apparel/merchandise in this metaverse, there is room in the market for a producer of metaverse specific clothing. The producer can control the creativity of the design with apparel relating to popular trends/memes/projects/designs or the consumer can create their own designs using the NFTs that they have ownership over. The concept of a secondary marketplace can also be extended to metaverse specific apparel and merchandise. This idea is extremely early in its stage as the idea of a metaverse has not even been fully conceptualized yet.
Additional notes left out of long-form text.
- “Don’t trust, verify” extended into the physical realm where physical apparel is rife with knockoffs and fakes.
- These communities are mostly millennials and the average age of participants continues to decrease over time.
- Potentially give perpetual royalties to the original creators for each transaction
- Experimentation with fractionalized nfts
Examples of Consumer Needs
- I want to buy clothing related to crypto/defi/nft projects such as Solana, SushiSwap, BAYC, or popular memes like GM, few, etc.
- I own a cryptopunk, and I want to wear a cryptopunk shirt/shoe/hat that is provably mine and legitimate.
- I own a cryptopunk, and I want to create a collection of physical apparel that I can distribute to my friends, family, or fans and that is provable theirs and legitimate.
- I want to be able to browse a secondary marketplace of nft apparel and buy from storefronts of popular creators/designers/personalities/art projects.
- I want to buy apparel/design from popular projects or popular memes to represent my avatar/character in the metaverse
- I want to be able to design/sell a collection of metaverse apparel that utilizes the NFTs that I own.
