The Non-Fungible Token (NFT) has gripped the popular imagination and caught the attention of brands across the globe. While many skeptics dismiss ownership of NFTs as a passing trend, it is difficult to dispute the numerous benefits for both businesses and customers, particularly in terms of redefining the future of product ownership.
NFTs are crypto tokens that are one-of-a-kind, verified data units on a public blockchain. They can be used to represent a variety of digital data, such as photographs and videos, BUT can also be linked to tangible objects, allowing for real-time tracking of their journeys and related transactions.
$37B has been spent on NFT marketplaces only in 2022. Valuable products and collectibles are being sold as NFTs for millions of dollars, and the number of luxury brands jumping on the NFT bandwagon is growing by the day. While these are some of the pricier and more attention-grabbing instances of NFTs in action, popular luxury businesses are also implementing NFTs to improve convenience and visibility for their customers. Brands are integrating real products with NFTs to make them digitally manageable, rather than dealing with virtual products alone.
For example, real diamonds are insured and regularly audited in a vault at a jewelry store. The possession of an NFT is an “IOU” of the item, which may be freely sold online. If the buyer of the NFT desires actual access to a piece of jewelry, the NFT can be redeemed by a brand that can retrieve the item and send it to the client. The item can be replicated as an NFT for continuing trade after it has been redeemed, subject to scrutiny.
The power of proof through the blockchain
NFTs are most commonly used to represent digital items. Traditionally, content creators’ income and earning potential are currently being sapped by platforms that give exposure but are not paying much to the artists.
NFTs fuel a new creative economy in which creators retain control of their work rather than handing it over to the platforms that promote it. Ownership is ingrained in the substance. When they sell their work, the money goes straight to them. If the NFT is sold by the new owner, the original creator may be entitled to royalties, forever. The creator’s address is part of the token’s metadata, which just can’t be changed on a public blockchain.
“Luxe Watches” launches NFTs to provide certificates of authenticity
Luxe Watches is the first luxury watch retailer to introduce personalized non-fungible tokens (NFTs) that come with certifications of authenticity.
The Epping-based firm is offering the first 10 free – five for buying and five for selling – to kick off the process. The Luxe Watches NFT certificate will serve as proof of ownership that can be passed to future owners, adding provenance to the watch and perhaps increasing its worth even more.
To show rightful ownership of products, these tokens symbolize one-of-a-kind items with guaranteed authenticity and worth. Customer ID (rather than name) will be included on the Luxe Watches certificate.
NFTs are used by Icecap and Mouawad to provide fractionalized ownership of The Miss Universe Crown.
Does the Miss Universe crown symbolize luxury to you?
Icecap, the world leader in developing NFTs for investment-grade diamonds, and Mouawad, a well-known luxury jewelry firm, have agreed to sell NFTs for fractionalized ownership of the Miss Universe crown.
The renowned jewelry firm was responsible for the creation of the crown. The procedure will be coordinated by the Dubai subsidiaries of the two firms. Fans of the Miss Universe pageant have never had such easy access to, much alone ownership of, the legendary crown. Token holders can vote to auction off their portion of the tokens if it is ever retired, or continue trading them if it is placed in a museum.
Revolutionizing luxury product ownership
Take Hermès, for example. The scarcity of its most iconic bags, the Birkin and the Kelly, has been used as a marketing technique by the French luxury goods firm. It has also leveraged the brand’s desirability to set prices for its bags because leather bags do not all have the same worth in the luxury industry.
Non-fungible assets can be used by businesses to provide unique value for their products. More crucially, NFTs provide security against copycats and replicas. Protecting marketers and content creators can increase artistic confidence and creativity. NFTs can also be the platform for lesser-known creators and storytellers.
Consider an artist with a thousand Douyin fans who create a highly captivating short video that is re-shared millions of times. By making the video immediately traceable to her, an NFT can help her gain popularity while also increasing her profit margins.
The same concept applies to craft product creators. Instead of working with a middleman who is “in charge” of selling, such as an influencer, incubator, or e-commerce platform, the artist can sell the work directly to the end-user. She will be able to increase her profit margins while also providing more trustworthy and transparent contact with her fans.
Meanwhile, by eliminating intermediaries, creators can gradually lower marketing costs. As a result, they can give discounts and special price collaborations. However, the elimination of intermediaries via NFTs benefits everyone tremendously.
Brands can not only save money on marketing, but they can also combat influencer fraud and avoid the risks of sponsored bots and phony followers.
How NFTs can prove ownership (the tech)
If you own an NFT, you can easily prove it. Demonstrating that you hold a non-fungible token is equivalent to demonstrating that you have ETH in your account.
When you buy an NFT, this one-of-a-kind token gets transferred to your wallet via your public address. Your private key verifies that you hold the original. The public key of the content author serves as a certificate of authenticity for that specific digital object.
The public key of the originator is inextricably linked to the token’s history. The creator’s public key can be used to prove that the token you own was generated by a certain person or brand, increasing its market worth (vs a counterfeit).
You can also prove that you own the NFT via signing blockchain messages that confirm you possess the private key.
NFTs: Value and authenticity
Certifying a real-life object’s chain of custody over a long period of time is a difficult task. It is also a very costly operation, which is why not everything is being tracked and blockchain is steadily finding its way into the supply chain.
Because jewelry and works of art are so valuable, they are closely tracked. While tracking technology has advanced significantly in recent years, the process of transferring a product to another person remains opaque.
Anyone can view the artist’s work on his or her website for free. Yet, Metapurse (the winning auction collective) valued ownership highly enough to pay tens of millions of dollars for it.
We can expect the future of ownership to be one in which the chronology of ownership can be easily determined or will be integrated as part of the product, at least for high-value items. With NFTs, creators (of art pr products) can share and sell their work, knowing that they will retain part-ownership of the master copy even if duplicates are shared online, getting a cut each time it is sold.
Are you a creator or a brand?
Are you looking to give new utility to your NFT collection? Or maybe you are a brand looking to explore collaborations with NFT Artists and Collections?
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