We’re calling it - in the year ahead, every NFT on the market is gonna need a utility.
Utility NFTs are more than just JPEGs on the blockchain. There are examples of utility where you buy an NFT and get early access to concerts, a membership to selective clubs, priority access to other NFT projects, or even the possibility to redeem a physical product.
Actually, one utility that is really growing in popularity lately is redeemability.
Redeemable NFTs or Physical NFTs allow the holder to have access to physical goods. For a lot of brands, it is the perfect utility — by opting for Physical NFTs, brands provide a real-life value for those who still identify NFTs as simple JPEGs.
So how do brands manage to create very successful campaigns with Physical NFTs? To figure it out, let’s review 5 of the best Physical NFT campaigns that are making some serious waves.
1. Adidas — Into the Metaverse
In late 2021, Adidas made its entrance into the metaverse. A total of 30,000 Adidas Originals NFTs were put up for grabs and sold out within minutes of its public launch. The acquisition of these NFTs allows people to unlock exclusive access to premium experiences in The Sandbox, but will also grant holders access to exclusive physical merchandise they can redeem.
NFT holders will have access to 4 exclusive physical products, at no additional cost, throughout 2022. When holders claim a physical product, their NFT is burned. In return, they receive a physical product and a replacement NFT with an increased phase number.
Physical NFTs are a great opportunity for Adidas. Sneakers and streetwear enthusiasts are already used to competing for limited edition product drops, it is pretty usual to see them queueing for hours (days sometimes) to put their hands on a very rare pair of sneakers. Physical NFTs just offer a new way to offer those kinds of drops and to trade these assets right away.
Earlier this year, retail giant GAP launched its first collection of NFT. For its release, the fashion brand is launching an NFT hoodie art that unlocks physical clothing.
For its first drop ever, GAP is collaborating with Brandon Sines, the artist behind the Frank Ape cartoon — the collection is hosted on the Tezos blockchain which uses an energy-efficient algorithm.
For $415 (100 tez), you can put your hands on the physical NFT, which includes digital art by Sines and a physical Gap x Frank Ape sweatshirt. With only 100 made this is the most limited edition GAP apparel ever released.
RTFKT creates next-gen sneakers and collectibles for the metaverse. On top of creating some of the craziest pieces of digital art, the meta-brand always pushes the limits of what’s already out there and makes every drop a unique experience.
For example, their sneaker drop with FEWOCiOUS gave collectors the opportunity to get a physical shoe as well. Each “open edition” NFT came with a physical pair of sneakers, the NFT holder who owned the NFT exactly 6 weeks after the drop was eligible to redeem the physical sneakers. In December 2021, one of these NFTs has been traded for 17.4 ETH ($78,000 at the time).
RTFKT was acquired by Nike in December 2021, in one of the most exciting deals of the year.
This one is not a brand but an artist. In February 2022, British artist Damien Hirst launched his second Physical NFT campaign: “The Empresses”. Each NFT represents the ownership of a physical print — and this is where things get super fun, as an owner of this Physical NFT, you have 3 years to decide about the future of your NFT.
Here are the options owners have:
Redeem the physical print, then, the NFT will be burned.
Keep the NFT and have the physical artwork destroyed.
Trade the NFT and let the next owner decide instead.
That’s not the first NFT project that Damien Hirst is working on, his previous drop was called “The Currency” which involved 10,000 Physical NFTs that gave NFT holders one year to decide if they wanted to keep the NFT, or redeem the physical print.
“The Currency” project sold out in minutes, and Artnet mentions that “Since the project launched in July, there have been a total of 1,571 sales on secondary market NFT platforms” — Another interesting fact is that only 522 NFTs have been exchanged for the physical since the exchange period opened (Feb-12 2022).
In January 2022, Patrón (a premium tequila brand owned by Bacardi) launched its first-ever NFT with BlockBar. The purchase of the NFT provides ownership rights to a very rare and exclusive physical bottle of Chairman’s Reserve — there are only 150 individually numbered bottles available and each NFT is priced at 1.5 ETH (around US$4,500)
The NFT serves as proof of authenticity, verification of ownership, and the right to have the corresponding bottle of tequila redeemed at any time. Actually, the NFT holder can choose to redeem the physical bottle and have it delivered or can safely trade its NFT version within the Blockbar marketplace. You might wonder where the physical bottles are stored, BlockBar keeps every bottle in a secure facility in Singapore with 24/7 security, motion sensors, and temperature control. Pretty cool right?