RTFKT (Nike) Launch Web3 Mobile App

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Introduction 🔌🔧

A number of stories in the headlines this week — with Creator League hitting the headlines hardest but perhaps not being the most ‘sports’ story even though it’s an Esports league technically. Possibly a story for another edition of the newsletter. It does however show that NFTs still have an incredible challenge to overcome; comms and optics, which we will no doubt cover on Sporting Crypto in the future.

For now, RTKFT, the Nike-owned studio who have launched a mobile app and it’s pretty damn good.

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RTFKT (Nike) Launch Web3 Mobile App

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For the uninitiated, RTFKT are an NFT studio and technology company who are behind some of the most successful NFT launches of all time.

In late 2021, they were acquired by none other than Nike in what was the biggest Web3 headline of the year.

The terms of the deal were, and are, not available to the public, but 6 months prior to the acquisition, RTFKT had raised ~$8m at a ~$33m valuation.

Some rumours have the acquisition at the $1bn mark but I think that’s extremely unlikely. Whatever it was, it wasn’t cheap, is my best guess!

Fast forward almost 2 years, and RTFKT have continued developing the IP that they founded prior to the acquisition, in parallel to Nike’s development of .SWOOSH, their Web3 platform.

How the two intertwine, nobody quite knows… but we might be seeing the building blocks of they might do in the future.

This newsletter covers:

📱 RTFTK’s new Mobile App✔️What it means for Nike’s Web3 Strategy🧠 Thoughts and the future of Phygital

🌐 RTFTK’s new Mobile AppRTKFT have launched Cryptokicks iRL, a mobile app available on Apple and Android, which allows users to connect their Cryptokick NFTs to their physical counterpart.

The Cryptokicks iRL are exclusive, with 5993 pairs owned by 3254 owners.

The NFT line was dropped in December 2022 as the “first native Web3 sneaker featuring the latest technology combining decades of Nike Sneaker innovation, with RTFKT’s vision to merge the digital and physical world”

And that’s exactly what they’ve gone on to do, it seems. 

The app is pretty flawless, and although I’m not a Cryptokick holder — I thought I’d download it for background research.

Users are prompted to connect their wallet or sign up and create an account, where they can then view their inventory of digital sneakers amongst other things.

To connect the physical sneakers, users turn them on via two buttons on the actual model. You then pair the sneakers with your app.

This allows users to customise, modify and their sneakers.

There are two key ways to do so, 1) lighting and 2) fit.

Lighting modifications allow users to add ‘light packs’ to their sneakers, changing the colour of the sole on the bottom of the sneaker.

The fit customisation allows the modification of the auto-lace feature of the sneaker, allowing users to make the sneakers tighter or looser.

On top of this, the sneakers can be upgraded/updated via firmware installs using the app.

We’re either looking at the next generation of fashion or something that could be hacked in a Black Mirror episode. 

There have also been sneak peeks and announcements by RTFKT alluding to the idea of quests and move-to-earn challenges being a part of the offering.

In December 2022, RTFKT co-founder Zaptio tweeted:

Exactly how this works is unknown, but it’s clear RTFKT want to incentivise some sort of activity — and add some sort of community engagement to their offering.

The first quests are rumoured to focus on steps, quite similar to STEPN.

🏁What it means for Nike’s Web3 Strategy

Nike are probably to date, the most impressive brand alongside Reddit when it comes to a comprehensive, thoroughly thought-out Web3 strategy.

It still does remain to be seen, however, how exactly the RTFKT ecosystem will interact with Nike’s broader Web3 plans. In fact, it’s slightly unknown just how much influence the RTFKT team have in Nike’s Web3 strategy full stop.

There has been very little crossover beyond the use of Nike’s marks.

They seem to be attacking two different angles here with .SWOOSH and RTFKT respectively.

With .SWOOSH, it looks like they're going after a mass audience. Anyone who could buy a sneaker, for example.

Signing up for the platform was free and your membership (.SWOOSH ID) was a free-to-claim digital collectible. The first paid drop (Nike OF1) on the platform was modestly priced at $19.82 each, and they have already partnered with Fortnite and EA in order to connect to some of the largest digital audiences.

RTFKT on the other hand are positioned more acutely; as a digital end-to-end concierge for the more exuberant spending sneakerhead or NFT collector.

The two being at the opposite ends of the spectrum could be seen as puzzling but I do think it could make a lot of sense.

Where it’s exciting, is where it could meet in the middle.

Is RTFKT Nike’s Web3 experimentation layer in the sense that anything successful is then plugged into the .Swoosh matrix?

RTFKT push the boundaries hard, so to some extent it’s normal that their propositions are not fit for purpose when it comes to a mass audience.

But it does beckon the question as to whether this was an acquisition to further innovation and future-proof your audience or stop a potential future competitor in their tracks.

If we take a step back further, Nike are looking at selling high volumes of lower priced items via .SWOOSH and RTFKT are still fixed on selling high-end digital (and physical) content to a smaller audience.

There is one common denominator between these two strategies, though. 

They are both trying to create platforms for their collectors and users and engage them via these channels directly.

I don’t want to say the L word (Loyalty) again but… RTFKT have launched an app that is functional, but at the same time will look to reward its audience through engagement.

.SWOOSH, as mentioned before, is already collaborating with some of the biggest audiences in gaming with EA and Fortnite to engage and reward their users.

The dots can definitely be connected from this perspective.

Both of the applications/dashboards have inventories to view your digital content.

Both of them allow you to interact with other things — whether it be physical trainers or digital partnerships.

Therefore, does the best-in-class future Web3 loyalty program combine physical goods with digital ones, giving users ownership of both, and then grant access and community via activations and partnerships?

Eventually, I do see these two opposite ends of the spectrum in .SWOOSH and RTFKT merging together because the opportunity is too big not to.

🧠 Thoughts and the future of Phygital

This is either way too early or the future of sportswear. 

Everything that RTFTK do is on the bleeding edge of innovation.

Do the things that they create and develop have mainstream potential, and do they create something that completely changes the way users interact with physical and digital content?

Do consumers actually want to have sneakers they interact with, or are Nike and RTFKT banking on the fact that in 10 years, it will be weird if you can’t interact with your sneakers using your phone?

In 2023, 56% of children 8-12 have smartphones.

In 10 years, will those children think it’s weird that they can’t change the colour of their sneakers with their phone?

In terms of engagement and consumer behaviour more broadly, I do find it fascinating that RTFKT are thinking about ‘Move-To-Earn’ in a (seemingly) serious way.

STEPN was a flash in the pan to some but still had 50k monthly active users in August 2023. 

Supercharging a daily human activity with crypto rails was in retrospect unsustainable but there was logic, stickiness and demand for the proposition at a baseline level. Just like Duolingo, or Strava, it became habitual and part of your everyday life regardless of the crypto angle.

Look at Starbucks with Odyssey right now.

They are trying to do something not too dissimilar but in a simplified way, rewarding and delighting you in return for something you do anyway.

The other aspect of Starbucks Odyssey that is pertinent here for me is the community-building aspect.

The incentivisation of not only individual actions and behaviours, but group ones in order to reward your fellow community members by banding together and achieving a goal is pretty awesome.

Now imagine if that is linked to a physical good that you wear every day… the combination of these things really interests me. Each is individually cool in its own right, but a user journey where digital and physical content, loyalty and community are all interlinked seems pretty awesome.

Overall, this is how I see the Nike x Web3 ecosystem heading:

• It’s key for RTFKT to continue at the bleeding edge of innovation and continue to cater to those sneakerheads and those people who want customizable, curated phygital experiences.

• It’s key for .SWOOSH to scale to millions of users globally and onboard the masses.

• The two strategies may not seem coherent right now because they're at polar opposite ends of the spectrum, but I do think that at some point they will move and meet in the middle.

• RTFKT will find something customers want to be part of their consumer journey. Imagine winning a final in an EA Game, and therefore allowing you to have some sort of access to a fan event, or a specific colour pack. Your wearables become the access key, on and offline.

The two ends of the spectrum — mainstream and hyper-curated collector audiences — will meet in the middle one day.

I’m excited to see what that proposition looks like when Nike unify those two pathways of innovation.

💡 Sporting Crypto Spotlight - Ep. 4 of the Podcast!

Should sports team ownership be democratised?

Krause House thinks so.

In Episode 4 of the Sporting Crypto Podcast, I had the pleasure of being joined by Flex Chapman, Co-Founder of Krause House - who are trying to get their DAO on the cap table of an NBA team.

Watch the episode below on YouTube!

Or your podcast player of choice… if you’d prefer not to see our faces!

🍎 Find us on Apple Podcasts here [Link] ✅ or on Spotify here [Link]

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