This article was originally published in CRYPTOAM – access it here
FASHION is just fancy clothing and handbags, right? Wrong! Fashion is a movement of self-expression – a powerful means of communication and creativity. And developments in the crypto space have brought more disruption to fashion than to any other industry.
This seems unexpected, as fashion is one of the oldest industries in the world, with deeply-rooted traditions that must be respected – even when disruption comes along.
Prepared by a decade of experimentation in new technologies such as VR and AR, the fashion R/EVOLUTION has taken off with the advent of NFTs, which have unlocked new ways for a brand to appeal to customers and strengthen its communities while looking at new products and revenue streams.
Perhaps the pandemic lockdowns were one of the main causes: the need to embrace the digital world was vital for the fashion industry’s survival. When the world shuts down and you cannot go out to live the fashionista lifestyle, what else can you do?
NFTs have become new digital wearables on Snapchat and Instagram, but also collectibles in games and metaverses, the next generation’s favourite hangout. NFTs not only work as digital assets but can also link back to a physical product – usually personalised – and unlock certain privileges and unique experiences.
Like never before, NFTs have revealed the true power of the secondary reselling markets, where values can increase depending on items’ rarity and uniqueness.
Stellar prices for virtual sneakers don’t scare off Degen buyers willing to pay hundreds of pounds for a special virtual pair.
Owning NFTs is a status symbol in the newly- forming community at the edge of innovation. These people know what’s coming and they can afford it. Bored APE Yacht Club has been the first and best- known project to create this sense of belonging – only owners of a BAYT NFT can join. Celebrities raced to buy them. The NFT is the key to unlocking privileges, a VIP ticket to a new reality where social bounding is
based on common interest and similar wealth. The evolution of social groups is in the end not so different from the real world: not everyone can get in. Luxury fashion too operates around a close circle of initiates that is not so open to newcomers.
Membership is based on connections, appreciation for beauty and the inspiration to reinvent trends with an innovative twist. Fashion brands started to follow the APE model, having quickly learned that there is a vast opportunity to reinvent their marketing and product offering to attract a younger generation of wealthy crypto enthusiasts.
Therein also lies the opportunity to strengthen their customer base and revive
that sense of exclusivity that the luxury industry has always championed. The post-pandemic world is different, so the ability for brands to adapt and reinvent themselves is crucial to their survival. Testing – and learning – what will be cool tomorrow is a must-have skill for fashion brands to survive and retain status, market
share and revenues.
Interestingly, after a year of experimentation with NFTs and metaverses, we are moving into a new territory: identity. Perhaps fashion will be at the forefront of that, too? Crypto is money – a new, open and borderless asset class that doesn’t discriminate on social class, education, age, gender or race. Anyone can get in and own a piece of it – own it truly, not via a third- party custodian or bank – but put it straight in your wallet and use it as you want. Crypto is a celebration of freedom and inclusion.
From tokenised businesses to NFTs, blockchain technology is creating a new ownership economy and empowering people. For fashion businesses and brands, there is a lot to unpack. Blockchain has the power increase transparency along a product’s life cycle. This refers not only to supply chain but also to sales tracking. This track-and-trace ability unlocks multiple opportunities for brands, such as royalties, but also offers unique value to users who can finally easily verify the authenticity and history of a product on a blockchain.
Product ID has become a topic of discussion and experimentation in fashion tech. A unique digital identity is assigned to each physical product, which can help combat fakes as well as increase a brand’s reputation and credibility. These unique credentials are equally valuable for digital products: NFTs, as a brand’s new assets and products, can be targets of abuse and counterfeiting. NFT trademark law has gained headlines with Nike’s lawsuit against the online platform to StockX over fake NFT sales. A similar case can be seen with Hermes and the Metabirkin creator.
IOHK, the tech company that built the Cardano blockchain, is at the forefront of innovate solutions on product ID. It has developed a suite of modules called Atala SCAN, TRACE and PRISM which can be easily integrated by companies and can work across multiple chains. As important as product identity is to the fashion industry personal identity plays an even more crucial role for us humans as we enter the Metaverse. So, who are we in the digital realm? In Cryptoland, you are your address.
In the unfolding metaverse in Web3, avatars represent our identities. As avatars are customisable and can be personalised with wearables, brands have already capitalised on this to create digital products and experiences but we need something more. Enter our new digital IDs. The success of P2P NFTs showed the power of what must come. NFTs can unlock portable identities so we are set to see the rise of a new form of virtual, self-sovereign identities through which we fully own our data while interacting with the online worlds.
Brands are definitely looking into this. In their latest Twitter space with digital platform UNDX, Dolce and Gabbana mentioned the launch of their project ID later in the summer, though no details have been revealed yet. Nike’s RFTKT have launched their Clone X drop – a genesis avatar project that goes beyond fashion to
embrace a new concept of word-building.
In the metaverse, you can be who you want to be. You can create your own world and social circle – be the cooler version of yourself. There can even be many versions of you, multiple aspects of you can have a life in the virtual world. You can have multiple identities and with those, access different multiverses.
The metaverse is not only a place to escape a frustrating or constrained physical reality but also a new world to express your creativity and liberate your fantasies and desires. But freedom always comes with risks. The online world gathers an unprecedented amount of data and there are big concerns over data security and privacy, not to mention challenges like interoperability as users want to move freely from Decentraland to TheSandbox, Roblox and Zepeto and many other metaverses. Self-sovereign identities (SSI) – digital identities focused on verified and authentic credentials linked to biometrics and other individual verifiable data – arrive as a
solution to protect us and build trust in the metaverse. They are managed in a
decentralised way by each user.
It is not just about owing your assets but also ownership of your credentials, your
identity. It has been said the metaverse is a $1 trillion opportunity. A new report from Grayscale stated that the rate of active metaverse users increased 10x between the start of 2020 and June 2021. The incredible point is that we are just at the beginning and much more has to be developed. The metaverse space will grow into a multiverse future where you can be multiple versions of yourself.
The future won’t be one dominant metaverse (sorry, Meta) but a multiverse future with many metaverses specifically defined for different purposes: social interaction, gaming, live events and concerts, shopping, dating and more. Each of us will have a reputation in each metaverse exactly like in the real world… or maybe different.
This is where fantasy takes over and your hyper-real self is created. The idea that digital identity matched that of real life is no longer true. The metaverse is where your dreams and fantasies take over. Fashion is a powerful communicator of identity and self-expression and will be here to capture these amazing developments.