On August 22, a chart published on Dune (a blockchain-analytics platform) by Stanford student Noah Levine sent shockwaves through Crypto Twitter by clarifying top-selling NFT projects by "large brands" of 2022 thus far, compiled using data sourced from the Ethereum blockchain.
Nike tops the list, thanks to its December 2021 acquisition of RTFKT, a purveyor of digital goods. RTFKT has since joined the Nike family of brands, sitting alongside the likes of Converse, SB, and Jordan.
At the time of purchase, RTFKT was estimated to be worth around $33 million; however, internet rumors estimated its purchase to be north of $1 billion.
Regardless of the price, Nike's investment is looking to be a wise one. Levine's chart asserts that Nike made over $185 million off of RTFKT NFT sales this year alone.
To put this in comparison, in 2021, Jordan Brand alone earned Nike $4.7 billion in revenue, all of which came from primary sales (eg: a customer pays Nike directly for a pair of Jordans).
This is only a fraction of how much value the Jordan brand actually creates, as secondary resellers (eg: StockX, resale stores) will upcharge anywhere between double to 10 times the original retail price. It’s estimated, however, that this price fluctuation only impacts a very small, sought-after group of sneakers with an estimated total resale market (including other brands like Reebok, adidas, and New Balance) of about $6 billion as of 2019.
Meanwhile, RTFKT did $1.29 billion — including $92 million in royalties — in secondary/resale volume prior to the acquisition. Combined with the $93 million in primary RTFKT sales, Nike captured the same volume in product sales from its secondary and primary markets for the very first time.
Although RTFKT and Nike have a ways to go before topping the $4.7 billion in revenue generated by Jordan Brand, they’re going to be able to catch up quickly with secondary market sales of their NFT sneakers and hoodies.
After all, if Jordan accounts for even 30% of the estimated $6 billion in resale I mentioned earlier, it'd be able to factor an additional $1.8 billion into its revenue. Not only is RTFKT already capturing that resale value but its secondary market has the potential to grow bigger with every drop, rapidly generating royalties for the lifetime of Nike-created NFTs.
Outside of Nike, Levine's chart reveals that other brands have seen some interesting results for primary versus resale value, which can help partially explain some of the volatility in the perpetually fluctuating NFT market.
Although troubled brand Dolce & Gabbana came in at #2 — mirroring its rising fashion demand — these results were driven by primary sales of its "Boxes" project that many users on the Highsnobiety Discord described as a clunky drop belying the high price.
Launched in April, D&G's Boxes NFTs could only be purchased through third-party site UNXD with wETH on Polygon, then were then airdropped to your ETH wallet several days later (a complicated process, even for so-called "NFT people"). D&G only recently announced physical Boxes goods for token holders, stemming several weeks of the NFTs' falling prices and secondary sales.
Meanwhile, Tiffany & Co.’s CryptoPunks jewelry collection sold out immediately, pinning the company at #3 with high-traffic, high-price IRL utility.
Gucci’s partnership with SUPERPLASTIC helped contribute to the Kering-owned house landing at #4. However, its secondary volume had been following a similar pattern to Dolce & Gabbana until the final installment of its SUPERGUCCI project.
Besides Nike, Adidas has arguably had the most consistent success by trade volume in primary and secondary markets. Its masterful partnerships with Bored Ape Yacht Club and gmoney may have the Three Stripes at #5 but its relevance as an NFT mastermind has held strong even through the so-called crypto winter.
Rounding out the fashion brands of the top 10, Lacoste placed at #9. Although its UNDW3 project only just launched this summer, it's had a great showing thus far.
As more brands enter web3, it's clear even with this early showing that those who provide the most utility to token holders are consistently rewarded financially. Whether it's Adidas 'forging' tokens for exclusive merch or CryptoPunk holders being the only ones able to buy $50k Tiffany pendants, the name of the game is quality rewards. However, this is why Nike is a different beast altogether.
When you consider that Nike now has the strongest head start of any brand in NFTs, the added utility they offer to RTFKT NFT holders is endless. An exclusive party with Drake? You got it. Tickets to the Super Bowl? No problem. The latest pair of Jordans? Already being shipped. Any one of these moves could bolster RTFKT's secondary market overnight while Nike reaps royalties on every single payment.
People used to say it was dumb to spend $1k+ on a pair of shoes but kicks are now classed as perfectly reasonable alternative assets. The same might be said about RTFKT NFTs, with the biggest difference being that Nike gets a cut of every sale. This begs the question: what does Nike see as a bigger earner long-term, sneakers or NFTs?