Luxury Fashion Houses Are Jumping on the NFT Market, Here’s Why

The world’s top luxury fashion companies are joining the latest digital innovation and are producing non-fungible tokens (NFTs).

What is an NFT?

Put simply, NFTs are unique digital assets, like drawings, music, in-game items and videos. Creators and collectors are describing them as the digital version of fine art. The owner of the NFT has access to the original digital token and can sell it.

So How Does it Work?

The digital make-up of an NFT is similar to cryptocurrency; they are made using the same programming techniques. Most NFTs are built as a part of the Ethereum blockchain. Cryptocurrency varies because it is fungible, or one can be traded for another, and one bitcoin is equal to one bitcoin. Whereas NFTs require additional information to be supported in the blockchain to allow for an NFT’s unique identifier. 

Why make an NFT?

The NFT market has been rising in popularity since its inception in 2014; it has been skyrocketing since 2017. Across platforms, the average sell price of an NFT is USD 3,900 of AUD 5287. NFTs have a similar volatility to cryptocurrency, and for that reason, the fashion houses getting onboard the NFT trend are only dipping their toes in. One of the most famous NFT is Jack Dorsey’s “The First Tweet”, which sold for USD 2.9 million in March 2021. The most expensive NFT ever sold was digital artist Beeple’s “Everyday: The First 5000 Days”, which was auctioned off by Christie’s to NFT Collector Metakoven for USD 69.3 million.

Louis Vuitton, Burberry, Balenciaga and Gucci have all released NFTs to great success. Dolce & Gabbana have announced that they will release their first exclusive NFT collection. Though most have collaborated with other companies, each fashion house has a different take on its first foray into NFTs.

Louis Vuitton has released 30 NFTs as a part of their recently released game “Louis the game”. The game celebrates the 200th birthday of founder Louis Vuitton and players collect NFTs throughout the game. Ten of the NFTs are designed by famous NFT artist Beeple. Burberry teamed up with Blankos Block Party for an exclusive NFT release. The release includes 750 Burberry Blankos, skins for the game character, 1500 jetpacks and unlimited mints during the two week release period. This is the most exclusive drop Blankos have done.  In June 2021, Gucci sold an NFT, inspired by their Fall/Winter 2021 collection, for USD 25,000. It was auction off by luxury auction site Christie’s. Dolce & Gabbana have partnered with UNXD for their first NFT drop. The city of Venice inspires the collection Collezione Genesi. 

NFTs are an evolving form of fine art. Top luxury fashion houses are launching towards the future of fashion by developing digital fashion and digital collections. As the NFT market continues to grow, we can expect to see more luxury houses creating NFTs.