Luxury fashion’s love affair with NFTs gets hotter by the day. Tiffany & Co. started offering bespoke jewelry pieces for CryptoPunks holders, Byredo is partnering with RTFKT to make “perfume of the future in Web3,” and Gucci is doing well, lots of things, as always. For years, luxury brands have had a complex relationship with the digital marketplace. Web 2.0 (i.e. social media) was built on the idea of abundance, lack of differentiation, and personal data exploitation — not something that screams luxury codes. Meanwhile, Web 3.0 concepts like NFTs are the total opposite. Scarcity, provenance, community, knowledge — these are the codes of NFTs. It’s no surprise that luxury adapted them so rapidly.
One area of fascination in particular for luxury brands has been access to the secondary market via NFTs. NFTs have smart contracts linked to them, which means the original creator receives royalties every time they’re resold on the secondary market. Imagine every time a Dior x Air Jordan 1 is sold on the secondary market, both Dior and Air Jordan taking a small clip. With secondary market sales of the Dior x Air Jordan 1 fetching close to $10,000 with multiple sales a week, that’s a pretty appealing concept. Cue the Gucci Superplastic NFTs, the Prada Timecapsule NFTs, and everything in-between. But a gap still remains: All these brands are doing digital NFTs, but when it comes to pairing them with physical products, there’s resistance.
“For these major luxury brands, there's billions of dollars of brand equity on the line with their physical products. If they mess up, it’s a huge dent to them,” says gmoney, one of Web 3.0’s most recognized and respected figures. He famously owns one of the rarest CryptoPunks, launched adidas: Into The Metaverse, and recently vaulted two pairs of the Air Force 1 x Louis Vuitton by Virgil Abloh as NFTs.
Last month, gmoney launched 9dcc, a crypto-native luxury brand. His categorization of 9dcc as luxury may be puzzling, as ITERATION-01, his first T-shirt launch through 9dcc, may not look like what we traditionally understand as being high-end. But 9dcc pairs physical products with NFT technology embedded within them right from the start, and these kinds of NFT projects often fetch high-minting prices (with an average sweet spot of around 0.05/0.1 ETH). If they’re successful, they can go for many times this amount on the secondary market. In this way, not only are gmoney and 9dcc redefining the definition of “luxury,” but also kickstarting what other major luxury brands have yet to dive into.
gmoney got his nickname at a young age. “In high school, I always had something going to make some money.” At the time he was trading stocks, but he “would've been all over StockX if it existed.” He has a keen appreciation for the value and opportunity that the secondary market provides, so much so that he is “designing for the secondary market” with 9dcc.
For the brand’s first release, gmoney is dropping a limited supply of T-shirts for holders of his Admit One NFT. The T-Shirt can now be minted at 0.3 ETH (currently clocking in at just under $500) and the Admit One NFTs are reselling on OpenSea for just under 8 ETH (roughly $12,000). What’s special about this T-shirt is that it contains an embedded NFC tag, which means that an NFT is directly linked to it, proving its authenticity. “It's one thing for a company to tell you, "We made a hundred of these T-shirts," but you really don't know. As a consumer, I'd like to know that because it affects the aftermarket values.”
Tracing authenticity is just one aspect of the NFT integration. When you begin to trace ownership and activity, things really start to get interesting.
“How much is a shirt worth if it was worn by Ye? If something was owned by a specific person, there might be more value associated with it.” To put it in context, in-game shoes worn by Jordan fetch far higher prices than off-the-shelf Air Jordan’s. If a 9dcc shirt was worn by Ye West and scanned at a specific moment in time — let’s say an album drop — the NFC tag can trace that. Imagine you’re looking to cop an ITERATION-01 on the secondary market and StockX doesn’t just show you the product, it shows you that specific time and place in history that this shirt was worn by Ye. Its potential for aftermarket value is going to be far higher.
Now let’s think about the archive for a minute. Brands lose ownership over their archives quite quickly and it often takes years for one to replenish. “When brands are starting out, they're probably leaner so you don't necessarily have the budget to say ‘Okay, let's store this (product) and set up a vault and keep everything pristine.’ Then when they’re big enough to start keeping stock, a lot of the magic of the earlier years might be lost. Archive diving has become such a crucial new branding tactic — just look at things like Gucci Vault.”
With NFC tracing, 9dcc’s vault is open source. They are able to stay connected to their product and if down the line they would like to use their ITERATION-01 T-shirts in an archive play, it’s just a case of buying it back from the community, not scavenging through vintage stores and secondary market places to try to locate it. Traceable ownership keeps the tabs. Even if the product isn’t publicly listed on OpenSea, 9dcc can trace the owner and offer them an amount to buy it back.
“Everybody wants to bring their crypto flex into the real world,” gmoney says. By wearing a 9dcc ITERATION-01 shirt paired with an NFT, not only are you bringing your crypto flex into the real world, you increase the value of 9dcc, and thus increasing the value of the product and NFT you are holding. Let’s say you wear your ITERATION-01 shirt courtside at a Lakers game where LeBron James happens to have a career-defining night on the court. What if the tee performs a “check-in” function at the game and proves it was there? That shirt may be worth more on the secondary market.
If an ITERATION-01 holder gets incentivized to wear the brand during cultural moments, it’s a win-win. The holder is benefited with cultural experience, and the aftermarket value of 9dcc’s product goes up.
Currently, the status quo around highly valued cultural products is to vault it and protect it from damage. 9dcc will offer this as an option as well, but now holders have a choice: Do they vault their ITERATION01 shirt, maintaining its value by keeping it pristine? Or are they active with it, having it show up at cultural events, increasing its value via experience? Whichever they choose, 9dcc is prepared for both.
The community behind gmoney is large and the appetite for his NFTs demonstrates the true potential of launching a crypto native brand. It’s really where his differentiation lies. “You might buy a Dior shirt, and it might mean a few things to a few different people, but no one will think it’s crypto native.” RTFKT famously wrote in their early pitch decks that they were building the roadmap for Nike’s digital transformation. In many ways, 9dcc is building the new roadmap for the secondary market across the entire fashion landscape. “I'm going to push boundaries. Not everything is going to work, but at least I'll learn from it and get a step in the right direction. Disruption is what happens in this space.”