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Fashion NFTs as Cultural Stock

The future of fashion and brands in the age of web3.

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What are NFTs? Non-fungible tokens are a digital asset class that bring scarcity to the virtual realm, by making items unique and trade-able. Their uniqueness makes them valuable and their standalone value makes them more scalable than cryptocurrency, especially when they have an avid community of supporters rallying for them.

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web what? web3 is an evolution of web2, an era of the internet mostly associated with the introduction of the mobile web and social media. Web3 builds on and disrupts some of these advances in pursuit of decentralization, democratization and reorganization of power, capital and ownership, respectively.

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How do NFTs tie into web3? NFTs are a vehicle for fundraising, revenues and governance. As such, they can be used to generate community buy-in, finance product development and grant holders voting rights, especially as companies become more decentralized and turn into decentralized autonomous organizations (DAOs).

What are Fashion NFTs?

Image sources from left to right: New York Times, The Fabricant, Balenciaga

Fashion NFTs

Can be ported and traded seamlessly and aren’t confined to any one virtual realm

Virtual fashion

Typically exists as filters on images or within apps

Digital Fashion

Typically exists as skins or wearables in games and closed virtual realms

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Just like other NFTs, fashion NFTs are tradable, interoperable, programmable, unique, scalable, and, potentially, very valuable.

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NFTs operate on community as a business model. Meaning, community members drive the engagement, growth and, ultimately, value of the NFT and its underlying asset.

How are NFTs and web3 impacting the fashion industry?

⚡ Utility

Fashion NFTs offer creative, financial, social & multiversal utility. They can be an investment or collectible, can signal status or belonging to social groups, are interoperable and harness creativity, either through expression or co-creation.

👙 Use Cases

Fashion NFTs can be used as wearables, loyalty or membership rewards like access and benefits, can vouch for authenticity and warranty as product IDs and allow brands to gauge demand for physical items.

👀 Attention vs. Ownership

Brands have long operated on generating attention and using third-party platforms to reach consumers. This notion is being challenged and replaced by offering consumers true value, namely ownership.

💅 Permissionless Brands

With the offer of ownership, brands harness consumers’ engagement, while creating the basis for collective brand building. As brands embrace this concept, they turn increasingly community-lead, paving the way for permissionless brand development.

Wearing NFT jewelry from Jevels.com

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The future of brands will lie in the hands of consumers. As they turn into owners or, rather, investors, they will have a vested interest in being involved in product and brand development.

Key propositions for the fashion industry

⬆ NFTs and web3 are all about end-user and putting their experience first

💎 Brands can use NFTs to engage with customers in a more meaningful way

👠 NFTs prompt a different wearer-ship of fashion: without physical limitations & as an asset

💪 NFTs can lead to democratization, financial inclusion and digitization of the industry

🌿 NFTs can foster more sustainable consumption, unless they promote physical items

🔧 New, technical skills and talents are needed in the industry

✨ web3 is turning the fashion industry a value-driven economy, where brands connect with customers through values first

Author: Adina Goerres (MSc Management & Technology, TUM)

Supervisor: Prof. Dr. Isabell Welpe (Chair for Strategy and Organization, TUM)