As brands continue to explore the metaverse, NFTs, or digital collectibles, continue to explode with new opportunities for creativity and connectivity with a community.
According to Adam McBride, the NFT Archeologist who got his start in cryptocurrency, the window of opportunity for brands or companies to really create value in the space is now. And moreover, he told WWD, brands have the advantage with existing communities and ownership.
Still, while it’s possible to release these digital collectibles for a quick “cash grab,” making a mark and creating a valuable NFT takes strategy and understanding of the market. Meaning, in some cases, brands need to give rather than take to build value behind an NFT.
Here, McBride talks to WWD about creating a valuable NFT, building community and what brands should consider as they embrace the metaverse.
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WWD: Can you explain what an NFT is and why you believe they are revolutionary?
Adam McBride: If you understand what NFTs really are, and this is why I’m more excited than anything, is that NFTs are digital ownership of everything. We’re doing art now because art makes sense to people as collectibles. So, we’re thinking about it as art. But when you start to think about it, in the sense of ownership on a public blockchain that is not controlled by any person or any entity on Earth. That is revolutionary and has never been possible in the history of humanity.
For example, if I own this house, it’s owned on a piece of paper at a municipality or a database at a municipality. That all can change if we want to. We can take that completely away and take the power structure completely away from governments from third parties like Amazon or Google or any big name, any big company on Earth.
We can take that away if we want as humans in this world. For the first time in the history of humanity that is possible and almost nobody gets that — even in the NFT and crypto community. It’s terrifying to governments. You already see it with China banning cryptos of all kinds.
WWD: When is it valuable for a brand to create an NFT?
A.M.: The way I think about it is the NFT should bring value, or potentially bring future value, to the holder of the NFT. In the case of a brand, they need to think about bringing value to their clients or their customers.
So many people are looking at it the wrong way right now because they’re looking at it as a way to grab money. You see this with artists all the time — they basically do a dump of NFTs and make money by selling NFTs. And that’s certainly possible now, but it won’t be possible in a year; people just won’t buy it in a year.
Brands really need to start looking at that. How can these things potentially grow or create special niche communities [that] allow access? This is the thing where I think artists can get creative because we’re really just at the first steps of this and actually creating that value for the holders. That’s the real thing. And most people have not figured it out yet.
WWD: Can you explain how value is being brought to NFTs by attaching decentralized finance?
A.M.: People are starting to attach decentralized finance, or DeFi, to NFTs as coin offerings.
For example, with Kong, you earn bananas with apes every day. They’re basically bringing in NFT communities who are starting to bring in these DeFi aspects, these tokenomics aspects. It’s a crypto coin. Do those bananas have any value? That is something that the team and the community needs to build value around. And they’ve done it where you could buy a shirt with bananas or you can join certain special groups with those bananas.
These are just the first steps. If I’m an artist, you need to ask “Do those provide access to me? What do the NFT holders get? What value am I going to bring to those holders?” It’s really an exchange of value and 90 percent of the brands just miss it. They think I’ll just attach an NFT to this and that’s it. And that’s the wrong way to look at it.
They should be considering how to provide value to the holders of these NFTs. By providing value to those holders, they talk about the brand, they engage with our brand, they tell all their friends about the brand. So for an NFT drop, it’s bringing not only the loyal followers in, but new people who want to get in as the community builds by providing a never-ending stream of value. And that’s really hard to do, but it’s easier for brands to do as long as they understand the value proposition. And that the value proposition is them giving rather than taking.
WWD: How do NFTs fit into the metaverse?
A.M.: The way NFTs fit into the metaverse is really, very simply about digital ownership. Digital ownership is the game-changer. And people don’t really realize how big a deal this is, but it’s beyond massive. NFTs are the first step where humanity is understanding that I can own something digitally, and it’s mine and nobody can take it away from me, and I can transfer it to anybody and I can sell it. That’s revolutionary.
It’s the exact opposite of Napster, where digital goods had unlimited quantity, unlimited supply and are infinitely sharable. That was good for the listener but terrible for the artist. We recognize that that’s bad, right? What we all want to do is have a community where artists can thrive. But this does something better, which is not just artists thriving, but the holders of their art also thriving.
In this, it’s a two-way street. It’s a community, but it goes both ways. If the artist doesn’t provide to the community, the community is not going to provide to the artist right and that NFT is worthless, and the artist gets almost nothing out of it.
WWD: How should the fashion industry, specifically, be thinking about NFTs?
A.M.: It’s so huge for fashion. Fashion designers are already getting into augmented reality, and I think when that really pops, it’s going to be massive. The ability for me to have a Gucci jacket, that’s verifiably Gucci (and that verification process will be through an NFT), that verification will be everything here. It’s the difference between me going to Chinatown and buying a $10 counterfeited version or buying the real Gucci jacket. We’re far away from AR, although many companies are working on it, we may be five or 10 years away from it.
If you look at my son, he’s probably spent $800 on skins in Fortnight where the value is just flexing or showing off for friends. Few people understand the power of that. There’s a reason I wear this jacket rather than another one. It just ties into a core human nature that is going to allow people to be much more expressive with the fashion and the brands that they connect with. For those early adapting brands, who were able to create those experiences for users, they have them hooked.
That proposition that goes back and forth that value now and you become the first mover. You just had a huge advantage. When it actually comes about and you actually have the AR glasses maybe it’s five years away, maybe it’s 10 years away, but I’ll remember that my first one was the Gucci NFT I still own.
WWD: Knowing that the full reality of a metaverse is still years away, what should brands be thinking about now?
A.M.: Whether it’s a new app or just a page on their website where they can start by giving value [with NFTs] and create the relationship digitally, where there are existing holders. Or existing owners of their brands can begin understanding the idea of digital ownership and position themselves for five years or 10 years where this stuff really takes off and just be in the pull position. Every time their new runway show comes out, maybe you can buy the NFT with it. And when you’re buying the physical, you get the digital to which you can use in the metaverse or through AR glasses.
There are all of these creative ways that artists and fashion brands can go forward with this, but there is a small window of opportunity where they can begin creating that value now and be kind of in the pull position going forward.
I wouldn’t be surprised if some of the small brands or fashion designers or the start-ups who are nimble and actually understand become the big brands in the metaverse and the AR experience space just because they get it and understand the value proposition at the beginning. You’re able to create these kinds of huge communities of rabid fans who just like love their stuff.