Despite the crypto winter, nonfungible tokens (NFTs) continue to draw interest. This has become apparent as many brands and retailers have started to offer digital NFTs attached to physical products. Known as “phygitals,” these offerings allow real-world products to be tied to digital NFTs.
For example, RTFKT — a digital fashion and collectible company — recently launched a project called Cryptokicks iRL. According to sources, RTFKT is creating digitally-designed sneakers backed by a physical product.
RTFKT’s official Twitter account recently tweeted that Lace Engine NFT holders will be able to reserve a pair of Cryptokicks iRL, which can then be redeemed for its physical version starting May 1, 2023.
1/ We are allowing all Lace Engine holders to reserve their sneakers in the RTFKT Interdimensional Hub. This will allow holders till May to figure out a US shipping address.
To pick up a Lace Engine NFT on secondary:https://t.co/PoPwbooYqG
— RTFKT (@RTFKT) December 12, 2022
Redeeming physical NFTs can be challenging
While the concept behind phygitals may be appealing to brands and consumers, redeeming physical NFTs has proven to be challenging. For instance, in some cases, NFT holders may only need to provide a wallet address to redeem a digital NFT linked with a physical item. Yet, this makes it difficult to collect personal information, such as shipping details, from NFT holders.
Jacob Ner-David, CEO at wine marketplace Vinsent, told Cointelegraph that he encountered such a problem after launching two NFT drops tied to physical bottles of wine. Ner-David explained that at the end of 2021, Vinsent launched both a public and private NFT drop. This allowed consumers to purchase tokenized bottles of fine wine that could be redeemed for physical bottles one year later.
Image from Vinsent’s collaboration with a company called LAAVA. Source: Vinsent
Although the project was successful, Ner-David shared that only a small percentage of NFT holders have come forward to claim their physical bottles of wine….