How Luxury Brands Will Embrace NFTs
Before diving into the topic, you might be wondering, what is an NFT? To put it simply, it is a unique crypto token that acts as a digital certification of ownership rights (but not necessarily copyright) to a digital or physical asset. NFT technology is a tool used to authenticate the token’s unique history. With digital assets, there’s also an opportunity for royalties to be programmed, applicable for the lifetime of the said digital asset. If programmed, every time a digital piece changes owners, the creator then receives a fixed commission.
For physical assets, the identifier is a seal or a serial number that links the product back to its ‘digital twin’. The ability to attach an NFT to a physical object allows it to be tracked throughout the product’s full lifecycle, a fact which is very attractive both for brands as well as secondary markets.
Luxury & Fashion and The Rise of NFTs
There have been multiple promising blockchain-related projects in the luxury industry that emerged during the past months. One of those is the Aura blockchain consortium, developed by LVMH in collaboration with Prada and Cartier. Each product receives a unique identifier, or a digital certificate, with a record of its origins. More recently, Dolce & Gabbana presented its first collection of NFT wearables, Collezione Genesi.
We can quote further luxury brands that have created their NFTs collections. In August 2021, Burberry, in collaboration with Mythical Games created its first limited-edition, limited-quantity NFT collection. The game, Blankos Block Party, features digital vinyl toys, making Burberry the first luxury brand to make a debut in gaming with their NFT entitled Sharky B.
Also in August, in celebration of the founder’s 200th birthday, LV released its own mobile game, Louis the Game. Here players make their way through animated worlds, en route to a birthday celebration. What’s interesting is that there are 30 NFTs available throughout the player’s journey, one-of-a-kind NFT collectibles which cannot be resold.
LuxFi— Bridging The Gap Between NFTs and Luxury Assets
Although NFTs were revolutionary mainly inside the world of digital art, it is only a matter of time until luxury brands begin mass adoption using this technology. Currently, a new trend might be shifting towards NFTs being sold as twins of physical products; as such,LuxFi considers this trend to be a massive opportunity for luxury brands to sell NFTs tied to their real-world luxury assets. By using biometric technology such as fingerprints to associate a physical asset with its digital token, data is permanently secured and cannot be altered once it’s stored on the blockchain. Such NFTs can be used for buying, selling and investing in luxury assets within LuxFi’s proprietary ecosystem. LuxFi’s key advantage is that instead of assisting one brand, we incorporate all brands in consideration for marketplace listings.
By purchasing an NFT on the LuxFi marketplace, the customer thus owns the ‘digital twin’ of a luxury asset (thanks to this cryptographic mathematical invention known as blockchain); likewise, the owner retains possession of the physical item itself. Once the ownership rights are transferred, the holder of the NFT may either hold on to it, trade it to others or redeem it on the LuxFi platform (thus having the actual physical product shipped to their chosen physical address). All transactions are public on this globally-distributed, decentralized, immutable ledger known as the Ethereum blockchain.
LuxFi NFT Marketplace Takes the 1st Leap
It is still an early phase of the development of NFTs, especially in application to physical assets as asset-backed NFTs. Taking into consideration the growing interest of luxury brands in digital tracing and ownership, and given the rise of the secondary market, brands will likely continue to explore how they can make such new but promising technology work for them. LuxFi is the perfect option for brands and customers to consider, as LuxFi offers the first NFT marketplace backed by physical items, thus providing a new and innovative way to buy, sell and invest in luxury assets of all types.
LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.
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