Unpacking luxury's NFT and metaverse opportunity

featured-post
type - big idea
Big Idea
sector - media & technology
sector - luxury
Daniella Loftus, a member of digital fashion collective Red DAO, describes how non-fungible tokens (NFTs) and digital goods can open new revenue streams and audience engagement

Can you share some background about Red DAO? How did it begin and what does it do?

Red DAO was set up after the Dolce & Gabbana inaugural NFT collection was announced, and it became clear that digital fashion was an interesting emerging asset class. We are a hive mind of 40 people who come from finance, blockchain, funds, crypto and fashion backgrounds. We have a Discord channel where we vote on which digital fashion projects to invest in and collect.

What does the DAO structure afford you that a conventional organisation would not?

By pooling together our capital, we can do more collectively than any one person could do on their own. In this way, DAOs can democratise access to goods. You basically have 40 partners in an investment fund, which you would not be able to have traditionally.

DAOs have a multi-signature wallet, which means that no individual can access the treasury alone. At least six people need to give consensus for the wallet to be unlocked. The idea is that if you bring everybody together, the opinions will be more diverse and interesting.

Published by:

29 November 2021

Author: Lavinia Fasano

Image: This Outfit Does Not Exist (TODNE)

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This Outfit Does Not Exist (TODNE)

For luxury and fashion brands, what are the benefits of engaging with DAOs?

If you give users a stake in your platform, those users have a vested interest in the platform’s success. If you had a digital fashion marketplace that required a token for access, it would incentivise users to promote products being sold on that marketplace. The more desirable those products become, the more people want access to them and the more valuable the token becomes.

There is also this idea of splitting revenue and royalties to compensate makers. Say you have a suit where a different designer did the colour, the cut and the pattern, for instance. Every time it was sold and resold, each designer could get a proportion of the profit, automatically, for their part in the creation.

Why was the D&G Doge Crown something that Red DAO wanted to collect?

There was a lot of hype about the Doge Crown representing the king or queen of digital fashion. In future, we might use the asset as a promotional tool for the DAO and for digital fashion in general. We could even rent it out. The idea is that you can keep monetising an asset like this in the future.

If you could give a piece of advice to luxury or fashion brands who are interested in launching an NFT, what would it be?

In my eyes, luxury brands aren’t taking digital fashion seriously. It’s currently being used as a marketing tool to redirect attention to physical clothes, but it should be its own diversified revenue stream. There are going to be 3bn gamers globally by 2023 (source: Newzoo). That's a colossal market opportunity that brands are not grasping – it should have its own dedicated team.

‘Digital fashion isn’t being taken seriously by luxury brands – it’s being used as a marketing tool to redirect attention to physical clothes, but it should be its own diversified revenue stream.’
 
 

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