Thoughts on NFT and fashion industry.
Fundamentally, both are Status-as-a-service (cr. @eugenewei) i.e. you pay money to gain social status (have BAYC profile ≈ wearing luxury suites).
However, with different mechanism, the business & future prospects are different.
Similarities:
1. Both NFT and fashion goods indicate social status, and people pay for that.
2. Status can only be established in social scenarios: luxury suites: formal events, NFT PFP: social media.
PS: yes, NFT can be art, but CryptoPunk as digital art is much cheaper than it as PFP. Value comes from consensus, and social scenarios generate consensus most efficiently.
3. Both NFT and fashion are driven by fads, which are inherent elements in status games.
NFT fads are composed of different collections/brands.
Fashion fads are different styles (color, design pattern) of each season, and the brands don't change that much.
Note: why are fads inherent for status games?
High-status stuff will quickly attract low-status imitators, making it less fancy. Thus, high fashion industry must come up with something new to distance itself from consumer brands.
Differences between NFT & fashion industry:
1. Blue chip NFTs do not need to create fads, because they have a natural price barrier. NFT fads usually take place at lower price level (like the recent black cats).
2. fashion goods have higher consumable utility and are perishable, while NFTs have higher investment value and are persistent & fraud-proof.
In the same scenario, the latter is more efficient in generating status.
3. fashion brands usually have numerous product lines, while currently 1 NFT brand ≈ 1 NFT collection.
OK, those are observations, here are my conclusions/guesses:
1. I expect successful NFT brands to have more collections (and blue chip NFT project are already doing so), because it reduces cognitive burden and produces tools to gain social status more efficiently.
e.g. most people in crypto have heard of BAYC, and that's the result of numerous marketing & branding. However at most 10k people can enjoy the status premium. That's inefficient.
2. Ultimately, market share of NFT vs. physical fashion brands depends on the relative importance of metaverse and the real world in our social life.
More specifically, as humans have similar social demands, the more time we spend in the metaverse, the less important are real world fashion brands, vice versa.
3. We might see the NFT counterpart of LV/Gucci as well as Nike/Adidas producing a larger number of collections that can be used by millions of people, given that humans in general spend more time in the digital world.