Nike sold an NFT sneaker for $134,000

The market for collectible sneakers has exploded in recent years. And until recently, so has the market for NFTs, or non-fungible tokens, which function as digital certificates of ownership for works of art as well as tattoo designs and virtual real estate.

It was only a matter of time before the two hypebeast markets collided.

In April, Nike released its first collection of virtual sneakers, called Cryptokicks, which included 20,000 NFTs, including one designed by artist Takashi Murakami which was purchased by a man named AliSajwani for $134,000.

“The mechanics around NFTs and sneakers are quite similar,” said Jurgen Alker, who runs the NFT studio for Highsnobiety, the lifestyle site that covers streetwear and sneakers. “Both are created around scarcity and drops. It’s about community, status and belonging to something.

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This is Nike’s first entry into the market and its first exit with RTFKT (pronounced “artifact”), a company it bought last December that had fueled the virtual sneaker market.

Other sneaker giants have also gotten involved. Last December, Adidas released an NFT collection called Into the Metaverse that gave shoppers access to limited-edition streetwear, including hoodies and tracksuits (but no sneakers). Made in partnership with the Bored Ape Yacht Club, Punks Comic and crypto evangelist GMoney, it was essentially a digital drop for NFT-savvy Adidas collectors and grossed over $22 million first after. – noon, according to The edge.

Asics, the Japanese athletics brand, recently created 1,000 NFT sneakers in collaboration with STEPN, a fitness app that rewards runners with cryptocurrency for every step they take (think of it as a combination of Pokemon GO and Strava). The virtual sneaker can be worn in the app and offers “gamification” features including sneaker leveling, shoemaking and NFT customization, said Yawn Rong, one of STEPN’s founders.

In a sense, virtual sneakers offer the same bragging rights as real ones. Collectors can show them off on social media or in NFT exchanges like OpenSea.

So what do Nike Cryptokicks buyers actually own? It’s not entirely clear.

The deployment was shrouded in mystery. In February, RTFKT released 20,000 NFTs from a mysterious box called MNLTH, pronounced “monolith” (vowels, apparently, are for noobs in the NFT world). The only clue to what was inside was the Nike Swoosh and RTFKT lightning bolt logo.

Some 8,100 people who owned an NFT from one of RTFKT’s previous collections received an MNLTH at no additional cost, said Joe Chui, 39, an NFT analyst in San Francisco who runs YouTube channel RealTalkFIRE, and who received one. of them. Anyone could buy one on OpenSea, starting at around 5 Ether (about $15,000 at the time), although no one knew what was inside. (Nike did not respond to multiple requests for comment.)

That didn’t stop Bryson Honjo, 31, who lives in Honolulu and runs UntiedHawaii, a YouTube sneaker channel, from paying 5 Ether each for two MNLTH boxes. “You have to believe this will be another groundbreaking sneaker, similar to the Air Jordan 1 from 1985,” Honjo said.

On April 22, after months of speculation, Nike announced on Twitter, Discord and other social media platforms that owners could connect their crypto wallets, where they stored NFTs, to the RTFKT site to “open” their boxes, Chui said.

Inside, the owners found a digital image of a generic basketball shoe called the Nike Dunk Genesis Cryptokick, as well as a virtual “skin vial” – a glowing cartridge that, when inserted into a port on the tongue of the virtual sneaker, gives the sneaker its final appearance. .

Skins also determine the value of the sneaker. Owners were randomly assigned one of eight skins, ranging from the most common, “Human,” with its fuchsia and black colorway, to the rarest, “Alien,” in purple and green.

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Their value on the secondary market varies greatly depending on the rarity. As of this writing, 5,661 human flasks are available on OpenSea, with a floor price of 0.59 Ether (about $1,154, although crypto prices have fluctuated wildly). There are only 18 Alien flasks on the market, with a floor price of 90 Ether (about $176,000).

For now, Cryptokicks only exist in digital form, which can be viewed on OpenSea or the RTFKT site. But the owners hope they can eventually modify them as new skins are released, and also port them to online games and the metaverse.

“It will be huge if Nike can get their NFT sneakers into games like Fortnite or GTA6,” Highsnobiety’s Alker said, referring to Grand Theft Auto VI. “Then you can flex your sneakers in games, not just on the streets.”

Others hope to be able to exchange their NFTs for a physical version. But a physical release is almost out of the question for Honjo.

“The most expensive physical sneaker I ever owned was a pair of Nike Air Yeezy 2 Red Octobers, which I sold for $9,000,” Honjo said. “In the four years I’ve owned them, I’ve worn them twice. So, with that in mind, is a shoe that’s basically only advertised as a shoe not really a shoe anymore? »

Chui feels the same. For him, Cryptokicks are much more than a virtual sneaker.

“What excites me the most is experiencing this rebirth,” said Chui, who owns two pairs of Cryptokicks. “We live in this intersection of the physical, the virtual, the gaming world and the real-time investing world.”

This article originally appeared in The New York Times.

James T. Quintero