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This Week’s Deep Dive: RTFKT & Nike Push the 'Phygital' Boundaries

By now, you’ve probably heard about RTFKT. Especially if you’ve been reading Sporting Crypto for a while. If you haven’t, they’re one of the most successful NFT companies in the world — and that success saw Nike acquire them in late 2021.

They pride themselves on being one of the premier creators of high end digital collectables, and more specifically, digital fashion. Much of this, looks and feels like sports leisure wear — but digital.

So why is their latest drop, a black hoodie, really interesting?

This world, Web3, Crypto — whatever you want to call it — has a lot of buzzwords and unknowns within it.

So when I say that RTFKT’s latest drop is a forgeable, digital wearable hoodie, that has an NFC (Near Field Communication) chip embedded into a physical counterpart, that allows for AR (Augmented Reality) interactions, you’re probably sat there confused.

But fear not, that’s why Sporting Crypto is here.

Let’s break this down:

• RTFKT are a leading NFT studio/company that are part of Nike, and are leading their charge into Web3

• They have allowed their NFT holders to claim a digital wearable hoodie, that can be worn by their Clone X Avatar NFTs

• The digital claim also allows holders to get a physical hoodie

• That physical hoodie has an NFC chip embedded in it

• This chip allows wearers to augment their physical hoodie, using AR filters, to morph them into something else (see above example with wings!)

• Your physical and digital hoodie are interconnected via the NFT, & NFC chip

On the surface, this might not seem exciting but you can see how RTFKT are connecting a previously fragmented universe.

When people say the word ‘Metaverse’ — most of them don’t know what they’re talking about.

In fact, no one really knows what they’re talking about when we say that word, *really*.

But if we’re talking about the tangible ‘things’ that are part of that ‘environment’, or 3D digital, more decentralised, internet thing we’re mentioning, you think of the following:

• Digital property rights (NFTs)

• The ability to interact digitally in a meaningful way (VR)

• The ability to blur the lines of physical and digital (AR)

• The ability for those things to be connected in a way that doesn’t rely on a centralised party (Blockchains, smart contracts and NFTs) 

And RTFKT, aren’t far away from essentially doing what they can with the infrastructure (from a tech perspective) that is available to them. Which doesn’t sound like a compliment, but it wholeheartedly is.

It always Starts looking like a toy

A wise man once told me that it often ‘always starts looking like a toy’

Now ometimes the toy is a one stop thing and there’s not much beyond it.

Take Pokemon Go. If we fast forward 6 years after it was launched — Snapchat and Instagram filters are probably the most used AR filters since then? Is that good…?

That’s obviously not to say that AR won’t be a big, big part of human experiences in the future — of course. Just that we may have expected things to come further since 2016. Now, in that six year period, we’ve had a two year period of slight hiatus with Covid, unfortunately. But the thought remains.

The iPhone's first 'killer apps' were Fruit Ninja and an app that you could drink 'digital beer' with. The innovators and creatives see clues like these and are open minded enough to see what the future could look like. The clues in this instance came from the likes of Pokemon Go when we talk about AR.Through drops like this RTFKT studios are showing you the clues and are even doing you the favour of interconnecting them.When we think about Sports specifically, merchandise and the ability for fans to wear their favourite team or athlete's jersey is age old but powerful and important in connecting fanbases. To me, we're seeing the starting point of the next step for sports brands and franchises.

But why is this really exciting and what’s the potential?

Pokemon Go still has 80m, monthly users.

And it was launched in 2016.

There is a huge amount of opportunity here.

Imagine your hoodie suddenly becomes a key to an IRL event, and to claim a POAP (proof of attendance token) where your hoodie has to be within 5 meters of the QR code.

Imagine being able to toggle on and off geo location, at a meetup for fans of a specific franchise.

Imagine rewards being allocated from brands dependent on the amount of people in a specific vicinity at a specific time.

Imagine IRL treasure hunts with physical and digital rewards where the AR filters are only useable to those with the hoodie on.

These are all pie in the sky thoughts from someone who’s never created an AR product — but the pieces are there to do very interesting things.

The ways that could play out, in conjuction with NFTs, as well — is fascinating.

The ability to create physical and digital counterparts that are connected via chip and authenticated token, unlocks the ability to do some amazing things.

RTFKT are creating the building blocks for a gateway between physical and digital that hasn't been seen before.

But the most exciting thing is that this is only starting point of what could come.

An interconnected world where the physical and digital are linked, where customers have as much ownership of the latter asset as you traditionally have with the former. A world where the lines are blurred between digital and physical, and where the size of a venue no longer dictates how bold and daring a brand or organisation can be. A world where, well, you might not need a venue at all.

Nike made a big bet on RTFKT.

I think it’s one that can pay off massively.

I once posted on LinkedIn that I felt, in time, this would be an acquisition as successful as Google buying YouTube or Facebook buying Instagram. I was met with a few comments that said “Nice thoughts but they’re wrong, RTFKT isn’t a platform’And those people are right. RTFKT isn’t a platform in the traditional sense. What they’re wrong about is that something that interlinks these two worlds successfully, something that gives commercial rights to their NFT holders and emboldens them to create a ground-up catalogue of free and purchasable derivative and auxiliary content — is probably just as powerful…

RTFKT are a veteran in the NFT space at this point.

But as they get all their lego pieces in place, it feels like just the beginning. 

More sports crypto stories & things to put your radar

• Sorare have signed Serie A on a multi-year deal starting this season. They join the Bundesliga and La Liga on similar licensing deals. 

• Ian Botham is launching an NFT collection. Looks like it’s really well thought out and executed.

• FC Barcelona have launched an NFT in collaboration with Sotheby’s, auctioning off a digital, golden statue of Johan Cruyff. 

• Commemorative NFTs are something we’ll see a lot of over the next couple of years. 

• Candy, here again, commemorating hall of fame baseball inductions with NFTs.

Great reads, great tweeting and more general ‘stuff’ that could impact you

• So Minecraft banned NFTs. And the discourse around it has been super interesting.

• Roblox might not be a crypto native platform. But it sure as hell resembles a lot of where crypto based virtual world projects want to head.

Thanks!

Thanks for reading the latest edition of the Sporting Crypto newsletter. I’m really happy to see so many people enjoying it and sharing it with their networks. If you enjoyed this, please tell your friends who might be interested - and share it on social :)This newsletter is for informational purposes only and is not financial or business advice. These are my thoughts & opinions and do not represent the opinions of any other business or entity.