Crypto Fashion: Why People Pay Real Money For Virtual Clothes

People care about what their avatars are wearing.

When virtual world Decentraland said in June that users can make and sell their own clothes for avatars to wear on the site, Hiroto Kai lay awake all night designing Japanese-inspired clothes.

Selling kimonos for around $ 140 (around Rs 10,390) each, he said he earned $ 15,000 (around Rs 11 lakh) – $ 20,000 (around Rs 14.8 lakh) in just three weeks.

While the idea of ​​spending real money on clothes that don’t physically exist is baffling to many, virtual possessions generate real sales in the “metaverse” – online environments where people can congregate, go for walks, meet friends and play games.

The real name of digital and passionate artist from Japan Kai is Noah. He’s a 23-year-old man who lives in New Hampshire.

After earning as much in those three weeks as he earned in a year at his music store, he quit to become a full-time designer.

“It just took off,” Kai said.

“It was a new way of expressing yourself and it’s traveling art, that’s what’s cool about it … When you have a piece of clothing, you can go to a party in it, you can dance in it, you can show yourself and it’s a status symbol. “

In Decentraland, clothing for avatars – called “wearables” – can be bought and sold on the blockchain in the form of a crypto asset called a non-fungible token (NFT).

Kai’s kimonos feature pieces of exquisite crushed blue velvet with a golden dragon border.

NFTs exploded in popularity earlier this year, as speculators and crypto enthusiasts flocked to purchase the new type of asset, which represents ownership of online-only items such as digital art, cards. collectible and lands in the online worlds.

Niche crypto assets are also catching the attention of some of the world’s biggest fashion companies, eager to partner with a new generation of gamers – although most of their forays so far have been in marketing.

Louis Vuitton, owned by LVMH, has launched a metaverse game where players can collect NFTs, and Burberry has created branded NFT props for Blankos Block Party, a game owned by Mythical Games. Gucci sold non-NFT clothing for the Roblox game avatars.

“Your avatar represents you,” said Imani McEwan, Miami-based model and NFT enthusiast. “Basically what you wear is what makes you who you are.”

Selfie shopping

The overall size of the NFT wearable market is difficult to establish. In Decentraland alone, wearable clothing sales volume totaled $ 750,000 (around Rs. 5 crore) in the first half of 2021, compared to $ 267,000 (around Rs. 2 crore) in the same period of the year. last, according to NonFungible.com, a website that tracks NFT Marketplace.

Some proponents argue that clothing and shopping in virtual stores could be the future of retail.

“Instead of scrolling through a feed and shopping online, you can have a more immersive brand experience by exploring a virtual space – whether you’re shopping for your avatar online or purchasing physical products that can be shipped. at your doorstep, “said Julia Schwartz, director of Republic Realm, a $ 10 million (approx Rs. 74 crore) virtual real estate investment vehicle that has built a mall in Decentraland.

For NFT enthusiasts, online fashion is no substitute for physical shopping.

But Paula Sello and Alissa Aulbekova, co-founders of digital fashion start-up Auroboros, say it could be an eco-friendly alternative to fast fashion.

Sello argued that the concept of virtual clothing could limit the waste of consumers buying clothes to wear on social media, citing a 2018 Barclaycard study which found that 9% of UK shoppers had purchased clothes for photos on social media. social networks and then returned them.

“Now we have to change the mode. The industry just can’t go on,” Sello said.

Virtual sneaker company RTFKT sells limited edition NFTs depicting sneakers that can be “worn” in certain virtual worlds or on social media through a Snapchat filter.

“It really took off when COVID started and a lot of people got more online,” said Steven Vasilev, co-founder and CEO of RTFKT.

RTFKT’s NFTs can also be used as a token to get a free physical version of the shoe, but one in 20 customers do not use this token.

“I didn’t make the buyout because I couldn’t be bothered,” said Jim McNelis, a Dallas-based NFT buyer who founded the NFT company, nft42.

“I try to avoid physical stuff as much as possible.”

© Thomson Reuters 2021


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting Founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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