Since the inception of The Naked Collector in 2021, I’ve been one of the leading voices in Web3 consumer and specifically Web3 fashion research. My private newsletter, has attracted a loyal following from industry giants, including H&M, Harvard Business School, Adidas, JP Morgan and Coinbase.
Today, I'm thrilled to unveil the enigmatic world of Web3 fashion and corporate (Web2) NFTs to a wider audience. As a recognized authority in this niche, I've had the unique privilege of observing and shaping emerging trends, which positions me ideally to present these awards.
The awards represent the innovative spirit and transformative potential of Web3. They serve to acknowledge remarkable contributions and groundbreaking advancements in this rapidly evolving field.
Best Web3 Success Story: Pudgy Penguins
In April 2022, Pudgy Penguins was considered a dead project. However, under the new leadership of Luca Netz, the brand has undergone remarkable innovation and growth. This resurgence is best exemplified by the introduction of Pudgy Penguin Toys, now shelved in 2000 Walmart stores. These toys not only offer physical enjoyment but also unlock unique NFT traits, including clothing, which users can interact with and trade online.
A key to their success is the strategic use of NFTs as Intellectual Property (IP) to generate revenue. Pudgy Penguins anticipates toy sales to reach approximately $10 million from May to the end of the year, demonstrating a lucrative intersection between physical products and digital assets. What sets them apart is their approach to community engagement; Pudgy Toys are licensed directly from the community, marking a pioneering move in the market.
In 2023, the brand expanded its portfolio by launching Pudgy Toys and the IGLOO fashion line.
Looking ahead to 2024, Pudgy Penguins is set to join the ranks of BAYC, Azuki, and RTFKT by launching its own metaverse, "Pudgy World."
Best Web2* (Fashion) Success Story: PUMA
Puma NFT collections went largely under the radar but amassed 4th largest volume among Web2 brand NFTs (after DraftKings, Nike and Porsche). Notably, while PUMA's revenue in the traditional sportswear market reached only 35% of Adidas' revenue, its 2023 NFT sales volume impressively exceeded that of Adidas by 450%. Furthermore, PUMA's Web3 royalties achieved 73% of Adidas' figures.
A notable aspect of PUMA's NFT success is its ability to attract new participants in the digital asset space. Approximately 33% of its NFT buyers were beginners (wallets with less than 10 transactions), compared to the average of 18% across both Web3 fashion and other Web2 brand NFT collections. This statistic underscores PUMA's role in expanding the reach and appeal of NFTs beyond the traditional market.
Best Web2 (Non-Fashion) Success Story: DraftKings
DraftKings has emerged as a leader in the non-fashion Web2 space, thanks to its NFT-enabled fantasy games, including Reignmakers Football, UFC, & PGA Tour. The NFTs are minted on the Polygon blockchain and DraftKings games have amassed the largest NFT volume in 2023 among all Web2 brands. According to CryptoSlam data, the collections accumulated a total volume of $251,409,713 since February (as of December 2023). This achievement ranks them as the 25th most traded NFT collection of all time in less than a year, with over 120,000 holders.
Notably, the collection also secured the highest royalties among Web2 brands, totaling $25 million.
A key strategy of DraftKings has been targeting regular users, especially those not native to the Web3 space. By trading on the Polygon blockchain and simplifying the process – such as allowing payment for NFTs with credit cards and minimizing Web3 complexities like gas fees and cryptocurrencies – they have made their platform more accessible.
Additionally, DraftKings' ownmarketplace facilitates these trades, from which the company garners a 10% marketplace fee. Given the projected growth of the U.S. online sports betting market – estimated to reach an annual $12.5 billion by 2025, up from $6.8 billion in 2022 (Stifel Research) – and the inherent suitability of NFTs for fantasy sports, DraftKings' volume is expected to continue its upward trajectory.
Web2 Brand With Most Holders (Users): Reddit
As of December 2023, Reddit had the most NFT holders with 24.9M, according to Polygon Analytics).
For comparison, below is the holder situation in October 2023, from The Naked Collector Fashion in Web3 Industry Report.
Biggest Disappointment: RTFKT
Despite being at the forefront of merging Web3 with fashion technology and gaining publicity through endorsements from celebrities, RTFKT emerges as the year's biggest disappointment, primarily due to the lofty expectations placed upon it.
While Nike’s own native dotSWOOSH ID collection saw 376,000 holders mint the ID, RTFKT saw its performance numbers decline.
While RTFKT continued to dominate the fashion volume charts for the second consecutive year, the market witnessed a significant decline in the value of its collections. The Clone X floor price, for instance, plummeted from $8.5K in February 2023 (and an all-time high of $67K in April 2022) to just over $3K by December 2023. The most affected were holders of secondary collections such as CryptoKicks, EVO X Vials, MNLTHs, Trillium Lace Engines and Loot Pods, some of which lost nearly all value primarily due to their redeemable nature — a development that caught many by surprise.
RTFKT’s downturn can be partly attributed to delays in production processes. However, a larger factor was the misalignment between holder expectations and project delivery, exacerbated by insufficient communication (from many holders’ point of view).
The floor price, a reflection of current and projected sentiment, suggests that if RTFKT successfully advances its Wear to Earn technology and metaverse ecosystem, it could positively influence both the floor prices and the overall sentiment around the project. There have also been glimpses of RTFKT’s potential for mainstream adoption, evidenced by LeBron James wearing theRTFKT x Nike Air Force 1 - Genesis sneakers and DJ Khaled sporting the Nike x RTFKT AR Hoodie.
Whether the same holders who supported RTFKT from the beginning will still be here, is another question.
Most Surprising Web2 Brand Entry: Maison Margiela
Maison Margiela marked its entry into the Web3 space with a unique and surprising move, launching its first gamified minting experience on October 24. Participants were given the chance to collect 24 distinctly numbered digital tokens, numbered from 0 to 23.
This innovative endeavor utilized "Polygon Soul-Bound Tokens," which are non-transferable and allowed each participant to mint only one of each type. The experience was gas-free, emphasizing user accessibility and ease.
The competition, designed to be fast-paced and equitable, was set to conclude once all 100 numbers were minted. Despite its intriguing approach to gamifying FOMO (fear of missing out), the minting experience garnered some negative feedback, particularly concerning its perceived difficulty.
Biggest Fashion Trend: Phygitals
As predicted in 2022, one of the most significant trends in fashion NFTs this year has been the rise of 'phygitals' – physical fashion items linked to NFTs through embedded NFC or RFID chips. This trend aligns with the growing narrative around RWAs (real-world assets) within the broader crypto space, indicating a continuing expansion in the future.
In 2023, phygitals emerged as the most popular product release category among Web2 fashion brands, underscoring their rising popularity. The next evolution of this trend is expected to involve the integration of real-world data, such as ESG and sports data, through oracles. Other anticipated developments include the collateralization of high-value items, like luxury watches, and the introduction of physical-to-digital perks, exempli ed by concepts like 'wear to earn.'
Largest Avg. Profit in 2023 (Web2 fashion collection):Nike/RTFKT CloneX Mintvial ($1,751)
Largest Avg. ROI in 2023 (Web3 fashion collection): A Kid Called Beast ($684)
The "A Kid Called Beast" (AKCB) collection has emerged as a standout in the 2023 Web3 fashion sector. This collection features 9,999 unique, 3D characters that are ready for augmented reality, hosted on the Ethereum blockchain. Each character belongs to one of 20 distinct "beasthoods," symbolizing various personality traits and emphasizing the collection's focus on fashion and cultural representation.
Gaining traction on platforms like OpenSea, AKCB's innovative approach to distribution and its strong identity as a Web3 brand have been pivotal in fostering a robust community around these digital collectibles.
Secondary Volume in 2023 (Web2 vs. Web3 Fashion)
We can see that Web2 brands dominated the fashion NFT volume in 2023. This dominance was evident not only in the absolute volume of transactions but also in the average volume per collection. The data analyzed included 46 Web2 and 31 Web3 NFT collections, representing an 11% difference in the number of collections. However, the disparity in volume was far more significant, with a 106% higher volume for Web2 brands compared to their Web3 counterparts. This substantial difference underscores the prevailing influence of Web2 entities in the fashion NFT space.
Secondary Volume in 2023 (All Web2 brands)
When it comes to Web2 brand volume in 2023 (including non-fashion NFTs), DraftKings and Nike/RTFKT have established a clear lead over their competitors. Their performance notably overshadowed even the highly publicized Starbucks collection. It's important to acknowledge that both DraftKings and Nike/RTFKT bene ted from having a substantial supply of collections, a factor that likely contributed to their dominant positions in the market.
Brand Primary Volume (Web2 Fashion)
Nike is not only leading in secondary volume but primary (or mint) volume as well.
Phygital Fashion Secondary Volume in 2023 (Web2 & Web3 Fashion)
Nike/RTFKT is also the leader in phygital NFT secondary volume having three of their collections in the top 5.
The most noteworthy is their Clone X Forging SZN 1, which saw 45.4K items forged, making it the largest phygital collection to date in terms of both volume and size. Additionally, their collaboration with RIMOWA for a phygital luggage collection ranked third in volume. The innovative cIRL sneakers, equipped with Wear to Earn functionality, placed fourth.
10KTF, a Web3 native brand, also made its mark in the top 5 with their Kagami phygital digital displays linked to their parent PFP collection. Meanwhile, PUMA's Materializer, an NFT representing a physical pair of shoes claimable in 2023, topped off the list.
Highest Royalties in 2023 (All Web2 Brands): DraftKings ($25.1M)
DraftKings had the highest Web2 royalties despite having the second largest volume, mainly due to their 10% marketplace fee.
Highest Royalties in 2023 (Web3 Fashion): A Kid Called Beast ($1.8M)
Want to Read More?
Go to https://thenakedcollector.substack.com/p/2023-recap-2023-2024-data-based-web3, to read how you can access the full report including Web3 user insights.
The data in this report was generated directly by me through SQL queries on the Flipside Crypto platform
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