Last week, StockX announced that it was getting into NFTs. This is a big deal for both the crypto and sneaker communities, as it leaves an indelible mark on what’s to come by bringing both worlds together.
With brands like Nike and Adidas already having NFT projects under their belts, it makes sense for the mammoth reseller marketplace to enter the fold as well. Comparatively, StockX is setting itself up for its marketplace to host a few different deliverables with NFTs and sneakers that other companies haven’t quite tackled yet.
StockX’s first NFT venture is Vault, which uses tokens as a representation of authenticity and provenance for its sneaker resale market. This is helpful for those who flip sneakers as a speculative asset, where it eliminates having to send authenticated shoes back and forth.
StockX is hoping to use NFTs as a tool to reward top-dollar spenders and collectors. For its first reward, StockX held a giveaway of eight Kaws figurines that only NFT holders could enter. The idea of using NFTs as a way of gating-off and rewarding super-fans has been a growing trend, with StockX looking to utilize its strong community of collectors to reward behaviors those people are already engaging in.
With a heavy emphasis on Vault for its entry into NFTs, StockX’s execution of tying NFTs to sneakers made sense. However, there are a lot of questions remaining about how people are supposed to behave within this marketplace that differs from how other NFT platforms are set up: How are resellers supposed to price-in this “value add” of an NFT? What NFTs will be sold separately from sneakers? Will users be able to resell NFTs they buy off StockX on other platforms like OpenSea? Let’s break down what we know.
StockX announced Vault as its first offering, with more digital assets to come in the future.
Currently, Vault has 559 NFTs tied to sneakers for sale. Editions range from 1-of-1 for the A Ma Maniere x Air Jordan 3 Retro and Off-White x Nike Dunk Low “Lot 50” to 100 for shoes like the Kaws x Sacai x Nike Blazer Low and white-and-black Nike Dunk Low Retro.
Vault ties NFTs to shoes as a certificate of ownership and authenticity. This helps mitigate the steps of shipping and authentication for people who use StockX with the intent of reselling/trading shoes as alternative assets. For those who actually want to wear the shoes, the NFT is “burned” (where a token is sent to a wallet that can only “receive” them, effectively destroying it), and you can request for the shoes to be shipped (since the token is destroyed, you get the real shoes).
StockX already uses an order book for shoes, which is similar to what you’d see in stocks or crypto trading.
Currently, you can’t sell StockX’s NFTs outside of its platform, but they have set themselves up to be resold on marketplaces like OpenSea by using ERC-1155 tokens (these are minted on top of Ethereum: the most popular blockchain to build NFTs on). StockX does verify the minting on Etherscan (the public database of Ethereum transactions), however, all transactions currently live natively on StockX’s website (there’s no trading of wallets on Etherscan, just StockX as the custodial wallet/minter).
StockX’s order book for Vault is much different from how traditional NFT marketplaces show transactions from wallet to wallet. This lack of peer-to-peer sales history makes it confusing to know how many NFTs tied to shoes have been minted, what’s for resale versus first-minted (an important factor for some NFT collectors), and how resale pricing works.
Looking through the initial sales on Vault, StockX has minted NFT editions from three to 250 available for different shoes.
NFTs like the Nike Dunk Low Retro White/Black do a good job of being reflective of their shoe’s real-world price, fluctuating based on resale demand. Other drops like the Jordan 1 Retro High OG “Patent Bred” started at $300 for an edition of 250, which peaked around $860 but are now closer to $670. However, shoes like the Ben & Jerry’s x Nike SB Dunk Low “Chunky Dunky” are somewhat more head-scratching for someone trying to gauge what’s for sale and how much the NFT is actually worth.
Minted as an edition of three, the Chunky Dunky NFT’s sales history lists five transactions, with the first two at $1,250 (in line with the actual sneaker’s market price) and the third at $3,000. If the sales history to number of editions is correct, one of the first three buyers resold their NFT for $3,500 and another resold theirs for $5,000 (around $3,500 higher than the sneaker alone). At the time of writing, there are two asks (one of $42,069, the other at $55,555) and a bid history that’s currently at $3,600.
People put up trollish prices like $42,069 all the time in the NFT world, but if someone isn’t digging through StockX’s order book, all they’re going to see is the high-end asking price. Advertising strategies like that worked for sneakers on their own because the market was backed by outside forces (like eBay or other resellers), however, having that advertised as the main sales price has deterred some from investigating StockX’s Vault NFTs any further.
Judging by the sales history for StockX Vault NFTs, it looks like those who are invested in the digital sneakers have started to define prices more closely tethered to what they’d feel comfortable paying for the shoes alone (plus the token holder’s benefits).
The Ben & Jerry’s x Nike SB Dunk Low ‘Chunky Dunky’ Vault NFT listing. Image via StockX
As a way to reward super-fans, NFT ownership on StockX could lead to some positive outcomes, including exclusive events, more giveaways, or access to brand products not available to the general public.
Although StockX’s rollout of doing everything in-house made sense for tying its strongest product (reselling verification/facilitation) to NFTs via Vault, the company hasn’t unveiled details yet on what NFTs will be sold in partnership with artists/brands, but has expressed an interest in doing so in the future. Eventually, NFTs not tied to sneakers will be able to move off-platform and onto secondary markets or physical wallets like Ledger.
If StockX designs its NFT sales like other marketplaces, it could potentially enable gated access for Vault and other NFTs to some of the same rewards (depending on the asset’s price and rarity). A good example is comparing it to Bored Ape Yacht Club, where the current entry cost of $224,000 grants you access to a message board of users who are millionaires and billionaires. StockX is eventually aiming for its digital assets to reach a similar level (regardless of whether the NFT is tied to a shoe), where you’ll be granted access to events (like the recent Kaws giveaway), Discord channels, or other digital spaces with others who’ve paid the same.
“We’re excited about our digital future—a future where NFTs can be bought and sold across multiple platforms and paid for with cryptocurrency; a future harnessed by new NFT products that empower the creator economy; and a future where web3 unlocks marketplace efficiencies and new experiences for our global community,” StockX CEO Scott Cutler said following the Vault NFT launch. “Our digital future will enable an ever expanding opportunity to trade and consume current culture.”
While StockX is still working out the mechanics for all of these pieces to flow within the Ethereum ecosystem, they’ve established the proper foundation to make it happen. For the greater community, that means this relationship between NFTs and sneakers is only in its infancy.
BY JOSEPH GENEST