On April 6th 2021, DEPT® hosted an interactive panel where brands such as Snapchat, Circle & Fabricant discussed the power of virtual AR fashion, virtual goods and the digital ownership of NFTs. Interesting predictions were made on how NFT platforms could create opportunities for brands in the digital space. During the event, the climate controversy around NFTs and ways in which this new form of ownership can be sustainable was discussed.
Curious about this event? Watch on demand to learn all about NFTs:
Brandon Aaskov, Director of Web at Rocket Insights (part of Dept)
Hi, I’m Brandon Aaskov. I’m the Director of Web Projects at Rocket Insights (part of Dept). So today we’re going to kind of, well, first I should talk about who Rocket is. So Rocket’s based out of the US, we work closely with a bunch of crypto companies in the greater Boston area. I should also talk about why I’m here. So I’ve been in that space for a while, but I will say that back in April of 2013, I definitely traded half of the Bitcoin for a pizza. So myself, like many others, have this whole fear of missing out, especially this time around or receiving all this popularity in the NFT space. Suddenly very popular in mainstream media from Jack Dorsey signing and selling his first tweet to people becoming the third most living valuable artist ever. That said, there is a confusing sea of lingo and barrier to entry. And so it’s still very hard for your average consumer to get involved in this. So today, what we’re gonna do is I’m gonna pass it to Isabel shortly, she’s going to walk you through some slides to really kind of explain this space and where you can tap into it. And then we’ll move into a panel discussion for a little while, where we have some people from all relevant areas in this space from digital creation to actual delivering the stuff on a variety of blockchains. And then we’ll move into a Q&A so we can answer some questions with the time we have left. But I do think the slides are super helpful, so I won’t waste any more time and I’ll pass straight to Isabel.
Isabel Perry, VP of Emerging Technology
Hello, everyone, hopefully, you can all see my screen. Great. Thank you, Brendan. I am Isabel Perry and I’m the VP of Emerging Technology. I think probably a lot of you are here today, because you’ve been seeing headlines like this. Over the last sort of six months there has been an absolute explosion or sort of conversation around virtual fashion and NFT’s. And a lot of you’re probably wondering, sort of, what is all of this space about? And how can brands participate in this new area of technology. We certainly had our attention caught by the headlines, partly because we create a lot of AR for brands. And I think it really got us wondering if we could create an AR NFT as a sort of proof of concept for our clients about the way that we could bring together virtual experiences with a sort of more interesting area of ownership around those virtual experiences. But to understand what the opportunity was for our clients, we needed to spend a bit of time to really get to grips of what an NFT was because this area really has exploded in the last few months. So I’m going to share a very short summary of what an NFT is before talking about the context around why this thing I think is exploding at the moment. And then going on to what we created for DEPT® as our first NFT edition. So an NFT stands for non fungible token and non fungible tokens are unique digital items with blockchain managed ownership. What’s really key about the word is fungible. It’s quite complex, quite a confusing word. But actually, it’s a really, really simple concept, which basically says a fungible item is interchangeable. If I have $1, and you have $1, and we swapped dollars, we both still have $1. So Bitcoin is an example of a fungible digital item, because one bitcoin is the same as any other Bitcoin. A non fungible item is unique. And so just like the Mona Lisa, an NFT has been created to be one of the kind. And that means that I also might choose to swap an NFT with you because we want to own different NFT’s. They have different values, and they are intrinsically sort of different objects. And the way that that actually works in the blockchain, and I’m not here to talk about blockchains or cryptocurrencies, but it’s really helpful to understand sort of the simplest level, why NFTs exist on blockchains and how they exist on blockchains. And when we show that ownership is managed, what does that mean? So at the simplest level, a blockchain is a method of storing data. And data is stored in these blocks which are linked to the previous block. So it or the cryptocurrency, really what you’re getting is a list of transactions which might be happening on that with that cryptocurrency, and that’s literally pushed to a block and stored indefinitely. And over time, you can understand the way those transactions sort of are continuously stored. An NFT exists on blockchains in a really similar way, because basically you can mint or add to blockchain. And that basically puts that unique item within a block and it’s there forever. And people can check that it’s there. And you can also trade it. So if I mint NFT, I can then go on to sell it, you can also check that it’s there, like I said, and then what’s really interesting is that some other people, if they own that NFT can then continue to resell it. At the simplest level, that is the way that NFT’s exist on blockchains. So that’s how it works. But really, what’s so amazing with NFT’s is just the sheer sort of unlimited breadth of what an NFT can actually be within that context. So NFT’s include collectibles, which might be something that you want to either collect a number of or sort of trade to build out your hand a bit like Pokemon cards, and it can include game items. So within virtual worlds, you might have an NFT of a specific sword, for example, very famously. And that’s a sort of real driver of a lot of the conversation that’s happening at the moment around NF T’s. But they can also as Brandon said, include things like tweets or even ownership records for physical assets. And this is just a little bit of a timeline that you can see actually, NFT’s were first being issued and back in 2017 with crypto punks, which was a very simple image, which would continue to be traded today. And then you can see that there was basically this flurry of activity over the last sort of while in 2021, around things like albums being released as NFT’s or incredibly rapidly increasing sales prices. So you might hear that these NFT’s are being bought and sold, but sort of where are they? Where is this happening. And there are over 130 different marketplaces where you can mint trade and track these NFT’s. And because they’re all sort of built on top of blockchains, that’s incredibly transparent to look into and understand how much money is actually sort of being traded on these different platforms. One example of them is a foundation app, which is one of the largest ones, it’s built on top of Ethereum, which is a blockchain. And you can see here there’s sort of digital art uploaded, and people can bid on that. And then they can also resell those assets. For brands. The most interesting example that sort of the most successful and huge example to date is the NBA top shot, which invites you to witness history and only NFT moments in a new era of fandom. And it started with this video here of James O’Brien reenacting a Kobe Bryant slam dunk. And that was turned into a moment. And moments are really a concept that NBA Topshop created, where they essentially packaged up that footage, and then sold it as an NFT on NBA top shot for incredibly high prices. And then that asset is then treated as a sort of collectible again and again, by multiple different people. And the amazing thing for NBA top shop, because every time it’s resold they can make, I’m not sure if it’s 5%, or 2%. But they take a royalty on that resale. And it’s been so successful that if you look at the top 20 NFT marketplaces, NBA top shot, which is the most branded version of NFT’s has driven almost 43% of all gross value of NFT sales in all time. So there’s huge amounts of money at play here as well, because 1.6 billion pounds has been spent on the top 20 NFT marketplaces. And within the art space alone, 45% of that has just been in the last four weeks. Some of these other marketplaces are sort of around virtual worlds, lots of them around art, some of them around sport, and there’s real sort of breadth and lots of them around gaming, and it’s real breadth in what some of these verticals are emerging around NFT marketplaces. But I think, again, I think it was unbelievable to see Justin March. So last month, when suddenly across all headlines, people were talking about the fact that people had just sold an NFT for 69 point 3 million US dollars. And that is quite astonishing. And it does beg the question, it’s just a JPEG. So are we in a bubble, and Beeple himself did say that he thought that we were in a bubble shortly before his art then went on to sell for 69 million US dollars. But I think that there’s a much bigger and more important context. That means that even though there’s the art world might be in a bit of a bubble right now, there’s something really, really interesting about the sort of need for NFT’s as we spend more and more of our time online. And I’ll sort of go on to explain that slightly. But I don’t really need to tell you on this call that our lives are increasingly being spent online. Just in the last sort of three years, and this is actually from 2018. Now, an increase of 5% people thought they spend almost all of their time online. And you can see here that the younger you are, the more time you spend online. And this data from Q4 2020 shows that around 15% of Gen Xers are spending more than 10 hours online a day. So that’s a really, really key. And that’s not going to change. And as we do spend more and more time online, buying virtual goods has become more mainstream. Lots of you remember the million dollar homepage, which was a genius idea with sort of 1000 pixels by 1000 pixel website, and you could pay to own multiple pixels. And my brother who’s younger than me had a friend who at 16 has become a multimillionaire from selling tepee textures on Minecraft and now lives in Bali with his own helicopter. And then I’m joined here on the panel later by The Fabricant, but sort of that as you can see the transition into suddenly, in like 2019, we are buying these digital goods as NFT’s. And this was the most beautiful version of sort of very, very early experimentation with digital fashion. And that’s what we’re seeing today become more and more prevalent. And I think a lot of the reason why that’s happening is because the gap between in real life and online has narrowed. And we’re beginning to live these augmented reality lives. So back in 2014, when Asos was talking about Halloween, there was sort of taking photographs of real people wearing real clothes, and cut to six years later, he was talking about Halloween in the sort of augmented reality life way, where actually it’s through the use of augmented reality effects on Tick Tock and their invite, then creating these experiences to the customer is not just the sort of creators to really own part of that brand and build out that sort of content, always with a sauce. But COVID has forced us all to behave more like Gen Z. I think we all know that we’ve been spending more and more time, given we haven’t been able to do anything else. We’ve been spending more time online in the last 12 months. And as we live more and more lives, online, digital goods are going to become even more valuable. And so you see the likes of the sort of $200 Photoshop outfits. And Gucci sort of announced that they were creating $12 Gucci sneakers a couple of weeks ago, and RTFKT sells NFT trainers for $10,000 a pop. And this is kind of extraordinary. Because I think it’s always sort of if you’re not really in the space, it’s almost crept up. And suddenly, you realise that there are all these sort of amazing, digital money spent on these beautiful digital goods, which you will never see in the physical world, but it doesn’t matter. Consume online. And I think that really highlights the tension because the Internet has made sharing information frictionless. And this is sort of really at odds with a deeply human instinct to own and to trade. So this is just sort of three minutes of screenshotting, my computer and sort of everywhere you look online, you see copy, download, forge share, and everything is about sort of distribution of information. And that is brilliant and wonderful. And one of the reasons why the internet is such an incredibly special place. But there’s this human need or sort of like unstoppable need to own things. So back in 9000 BC, we were owning cattle in 12,000 BC people’s sort of trading with shells. And I think it’s a real interesting sort of reflection of whatever people value, they begin to create ownership around. And I think because we value being online so much, it’s really important that we understand ways of building our ownership. And I think that’s also reflected by the fact that sort of, there’s a really disproportionate value driven by collectible NFT’s versus unique NFT’s because that is that thing of like I want to collect shells or I want to collect sort of land or I want to own patents. So even though only 50% of the largest of the top 20 NFT marketplaces are offered collectibles, they drive nearly 80% of the gross value of NFT’s. So I think NFT is a really inevitable form of digital ownership. And although there’s definitely hype and there’s definitely bubbles right now, it is really interesting to think about where do you start if you accept that people are going to want to own this digital space. So digital items. And for that, you kind of have to take a step back and address the unsustainable elephant in the room. And there is a lot of talk about this. And I think, actually it was really, it was. So we released an NFT. Last week. And it was really, really brilliant actually to see that there was push back, even within DEPT® on should we be doing this, is this environmentally friendly enough, how we address this, so it’s a concern, it’s a really real concern. And if you are building an NFT or creating an NFT on Ethereum, for example, which is the most commonly used blockchain for NFT’s is like flying for two hours. And that is, that is a problem, I think, and just sort of to help you understand, energy is used to mint to bid to cancel bids for sales, every sort of transaction that you’re making on that blockchain does require some energy to enact. But technology has progressed since sort of blockchain technology was introduced 10 years ago? Well, well, no. And there is a sort of new way of building blockchains, which instead of using proof of stake, you can use proof of work to verify that transactions are accurate, and to ensure the sort of stability and validity of any given blockchain. And you can see here the difference between sort of the estimated annual energy consumption of Bitcoin compared to Ethereum, which was a sort of blockchain version two, and Tezos, which is a sort of blockchain version three, which uses proof of work. And it’s estimated that actually even compared to Ethereum, is also sort of 1.5 million times less environmentally damaging. And to the point that is really like running any other website. So there are absolutely sort of ways around creating inviting less environmentally damaging lefties. And with that in mind, we sort of went through this, these five steps of actually, this is how you can create your first NFT. So the first thing is to create your NFT asset. And that’s really, what do you want to turn into an NFT. The second is to select a marketplace and some steps might be required to prove eligibility of that space. The third thing is to set up your crypto wallet. So that’s to sort of create your public address on the blockchain. And also to create the private keys to actually control that. The fourth is to mint the NFT. So that’s when you actually sort of upload your NFT asset into the blockchain. And then you can list the NFT and allow people to sort of bid on it or buy it for a fixed price, or to resell it. And I think we only joined that back in February. And it was kind of easy to see that that already had a parallel line of this, like street wear. And we thought what if actually the next step to parallel drop, which happened really regularly was virtual, and that becomes the NFT. So you can see here the depth of our website, we designed and built this virtual jacket as a snapchat lens using the new sort of full body tracking, which was only recently released. And that sort of opens up really beautiful clothing into Snapchat. And we push that to Snapchat to actually sort of make the jacket beautifully modelled by some colleagues here. Then we needed to choose the NFT marketplace. And for that the number one requirement that we had was that it was a proof of stake blockchain. We also wanted something that was semi curated so that it had a sort of high quality of goods on it, something that supported checkout. So the NFT’s could be bought via the market place because we didn’t have time to build our own back end for that and unlikeable files so that once someone’s bought the NFT, they can then access the design files of that AR lens. So we chose to work with NFT Showroom because it’s built on the blockchain and cryptocurrency Hive. And then we need to set up the crypto wallet. So for this, you sort of create your account, and you register within the name of what you want to be so for us we actually had to pretend to be a collective of artists to qualify on an empty showroom. So we registered as DEPT® department of artists. And then we generated the necessary keys accessing all it when you hear about people that have been trying to uncover hard drives, which sort of would give them access to Bitcoin that somewhere in a dump somewhere. What they’re actually referring to is the private keys which are generated when you sort of register for your crypto wallet, and that’s what this process will sort of generate for you. Minting the NFT’s is in some ways, one of the simpler steps when you’re working with a marketplace like NFT Showroom. We decided to create one NFT of the video render of the jacket and create 20 additions, because there are 1700 Depsters. So we thought any less than 20 was not realistic, we could set the price at around $10, which was 12 Hive at the time. And people could unlock a link to the Google Drive once they had purchased the NFT jacket. And you can see here, you sort of literally upload an image, you can upload videos, and you set a number of settings around sort of, yeah, price and so on.
And then you list it. And I think it’s slightly complex, sort of creating a crypto wallet and buying these NFT’s. I think we had no idea how many people would buy these NFT’s when we first went live. And they sort of essentially sold out within a couple of hours. Someone immediately relisted one at over a million pounds of over a million dollars, at its most at 750,000. And there’s just been a sort of incredible sort of resale activity or flurry over the last five days or so. And I think it was a bit of a window into the NFT world at the moment because someone called Arbitrage has bought about 16 of them and keeps this sort of setting basically gaming the price. And so it’s been incredibly interesting seeing how it’s sort of played out in terms of the actual sort of sell and resale of the NFTs. And on NFT Showroom, if you do want to buy an NFT, the UX is still actually quite sort of challenging. So within NFT showroom, you have to click buy five times to actually confirm that you really, really, really want to buy the NFT. And I guess it was quite a complex process initially getting to grips with how to both generate and buy NFT’s. And it hasn’t necessarily been easy. So I think and sort of the question is, why bother? But I think that the sort of bigger question is, how can we make it easier, and I think both Brandon and Rachel from Circle, are sort of working at companies that are spending a lot of time and thought into thinking about how to create much much richer experiences, and that do make that path to purchase a lot less friction, less friction for. So I think to answer, why bother, you really need to think about why people are buying NFT’s at the moment. So the first thing is there’s a real sort of explosion of people that are speculating on NFTs. And I think we need to be realistic about that. And I think some people will probably lose a lot of money actually on it. But there is sort of a lot of speculation going on. But there’s also a lot around sort of pride and ego and sort of it’s deeply human instinct to own and to want to own something and to have that be visible. There’s also huge growth in sort of sales of NFT, just around fandom, because it’s about a way of always expressing your identity through what you admire. And I think that’s a really, really interesting space for sort of creators and influences as well as for brands, but then also patronage so because all of the transaction history is visible. Actually, if you become a patron of an artist that you really admire, then your early patronage will be indelible sort of when the blockchain so how can brands make NF T’s work for them? Well, I think you need to sort of tap into the drivers behind customers and think about allowing resale to create large markets, creating buzz around ownership, integrating with your existing goods and services, and leveraging sort of a really dedicated fan base. So if you help, if you have existing customers that are really dedicated, then like, lean into that. So I think just to sort of, to sort of some thought starters are just how brands can then leverage NFT’s by category. So for fashion, can you provide exclusive virtual versions of owned outfits that also prove the authenticity of that outfit? Could you actually create a leaderboard at the sort of the top spenders if there is a sort of competitive element of that? And I won’t read through all of these. I appreciate this sort of at time, but just within property, can you offer digital monopoly experience to trade virtual versions of homes within law? Can you fast track paperwork for property sales patents, vehicle registration or even diamonds? And within marketing strategy? Actually, what does sponsorship look like when you actually give away NFT’s, all behind the scenes content to customers that it’s all tradable. Or can you do sort of out of home create location specific coupons for collection and redemption as NFT’s? I think there’s just a huge amount of creative potential in this space. So just to sum up, I think, yes, like a lot of NFT’s are just JPEGs. And yes, we probably are in a hype cycle. But we are only human. And as we increasingly value digital items, we really need a way to earn them. Thank you very much.
Brandon Aaskov, Director of Web at Rocket Insights (part of Dept)
All right. I know when I went through that for the first time, it was like very helpful, and probably the simplest blockchain analogy I’ve ever seen. And I mean that. Cool. So yeah, now we are at the panel discussion side of the talk. So I’ll let everyone introduce themselves. And I’ll pass it in the order here. But basically, we’ve got Isabel. We just saw, we’ve got Will from Snapchat. We’ve got Kerry Murphy from The Fabricant, we have Damara Inglês from well, she’s a virtual fashion creator and artist, which I think brings a whole cool concept of this, this whole talk. And Rachel Mayer, who is from Circle, so I’ll pass well, Isabel, we know who you are. I’ll pass it onto Will to first introduce himself. And we’ll go through intros and then I’ll kick off with a couple questions.
Will Scougal, Snapchat
Hey, everybody, thanks very much for that as well. And hey, Brandon, thanks for inviting us along to the panel discussion. And I’m global Director of Creative Strategy at Snapchat, where I’ve been for five and a half years. And I’ve been working on AR since that moment, really, since the vomiting rainbow kind transcended the platform to become the most popular Halloween costume of 2015 in North America all the way through to what we’re seeing today, with augmented reality really becoming a full funnel format across attention, emotion and utility and fashion being very much at the driver of the forefront of of that shift and change. Thanks very much.
Brandon Aaskov
Alright, let’s pass it to Kerry next.
Kerry Murphy
Everyone. I’m Kerry, I’m one of the founders of The Fabricant. We are the world’s first digital only fashion house where we focus on creating the digital only fashion industry. It’s highly creative. It’s super technically challenging, but the biggest challenge for digital only fashion industry is to find that monetization, new revenue streams so everybody can become a digital fashion designer. So fashion brands can start their own digital only fashion labels. On the side. We are also an agency, we help fashion brands digitise, we create digital samples, we create content for that lookbooks. And we do marketing campaigns and interactive experiences. But I’m super excited about the digital only fashion industry. So yeah, I’ll leave it at that I’m sure we go deeper into
Brandon Aaskov
Well, since we’re on a digital fashion trend, I’ll pass it to Damara.
Damara Inglês
Hello, everyone. My name is Damara Inglês and I am a self proclaimed fashion tech cyborg, and designer of extended reality experiences and virtual fashion. Basically, I use technology as a lense to criticise analogue fashion in ways to make it more diverse of different cultural identities, more inclusive of our digital citizenship, and also overall more democratic and sustainable.
Brandon Aaskov
Alright, and of course, last but not least, Rachel…
Rachel Mayer
Hello, everyone. Nice to meet you all. My name is Rachel Mayer, I’m VP of growth and Product Marketing at Circle based in Miami, have been at Circle for nearly four years. If you don’t know who Circle is, Circle is a payments and infrastructure company. For internet companies, we marry both traditional means of payments and treasury with blockchain based worlds. You also might know us as the creator of the world’s leading stable coin US dollar coin USDC. And we power today a lot of companies and NFT marketplaces, like dapper labs for their NBA top shot. So excited to talk to you about some of the challenges and experiences and how Circle and other companies in this space are tackling some of those for you to build new products and services.
Brandon Aaskov
That’s great. All right. I’ve got a few questions queued up that are sort of targeted at direct people. But I figured we’ll start with one person who answers them and then we’ll just go from there. Someone wants to jump in and add in to the answer. Feel free. So let’s see how this goes. We’ll start with well this first one is kind of about the NBA top shot stuff. So What can brands like the NBA, you know, that’s one of the biggest ones. What can they do to involve this community of creators that are out there considering they have these proprietary marketplaces.
Will Scougal
So I guess, in terms of the NBA example, which is a fascinating one, I did have no idea about just how much of the NFT economy was really powering and driving at this time is absolutely phenomenal to see that level of growth. From a creator perspective we’re talking from, from the Snapchat perspective and point of view, what I think what we’re seeing is really a democratisation, certainly of augmented reality in terms of the technology that people can use to craft these types of experiences. Certainly, since we released the Lens Studio software for free a couple of years ago, which is the software we use to build all of our augmented reality experiences, we’ve seen over a million lenses built within that software and over a trillion views of those lens experiences. So we’re starting to see a community build up and emerge and really drive influence. And I love this point, actually, around the idea of craft, I think that the influence that we’re seeing through digital creativity and with augmented reality is one where it’s influenced through beautiful craft, as opposed to just personality. And I’m not saying one is better than the other. I just think that it’s really interesting. We’re seeing that emergence. And I think that that is, is really celebrated in what we’re seeing in kind of NFTs and the growth that we’re seeing across you know, whether they’re JPEGs, or gifs, or whatever they might be, it’s really beautifully crafted digital assets that people are celebrating, and buying into and wanting to have a sense of ownership of as the physical and digital worlds are kind of becoming closer and closer together and becoming kind of part of each other. So I do think that for brands, the opportunity is to think about the craft that you can really bring to the table. And for me, that’s about contribution. I think so much of that so much of digital has previously been about interruption whereas I think we’re in this beautiful phase now where we’re thinking about how can we make the digital world better, more interesting, more entertaining, more useful, more beautifully crafted, and as the tools become more democratised and the accessibility becomes more democratised, the volume of content and the quality of content is going to become more democratised as well. And I think that really flipped the narrative and the question back to brands about how can you contribute with something beautiful?
Kerry Murphy
I would like to ask a question on that straightaway. Are you going to tie your lens filters into NFT’s? I think that’s probably the biggest question that we get from all the brands and every single brand is trying to monetize on this.
Will Scougal
Well, so I think that with AR and with AR that’s built within the Lens Studio, when a brand builds within the studio, that’s something that they’re building for themselves. What they do with the assets that they create is really, really up to the brand itself. There’s not anything that is currently immediately on the radar in that respect. But I would say that it’s up to brands to realise the opportunity and work to you know, make the most of the asset that they’re creating. Within the studio itself.
Kerry Murphy
Gucci just dropped some sneakers for $12 which you get to release as NFT’s as a AR shoe wearing experience. Yeah, I
Will Scougal
I think so, I think one of the things that actually we’re seeing with the AR studio and with Snapchat in particular is 75% of our 265 million users are using augmented reality every day. There’s millions, hundreds of millions of people using AR on the platform that makes an NFT meet that gives you an immediately scalable audience. So when someone like you know if we look at new the question of is this a fad or is it something that’s becoming mainstream? You know, I think art follows fashion brands follow people if you if you know i mean and what we’ve seen in AR and certainly with product trial and fashion trial is Dior, Gucci, Lacoste, Balenciaga, Nike, Adidas, all building digital fashion assets, augmented reality, fashion assets in order to raise awareness and provide accessibility to those assets to people huge scale. So I think in Gucci what they’re doing and actually also with DEPT® what you did with the, with your first NFT puffer was provide interest and awareness and scale through Snapchat and AR trial through body tracking, then obviously released the NFT through different platform.
Brandon Aaskov
Alright, well, this is a good segway then because, well, this one’s actually gonna be targeted at Rachel. So it comes as no surprise that there’s a whole bunch of interest from brands and a flurry of interest about having their own NFT based storefronts, since many of those brands are just getting started right now. What’s one or two key considerations that you think they should keep in mind when they’re sitting in meetings planning these things?
Rachel Mayer
Yeah, absolutely, I think Isabel’s presentation did a great job of explaining the pain points of a brand, going through creating a digital NFT good, but also how to put that good out into the world and have your existing audience interact with that and perhaps purchase with it. So marrying those two worlds of how you monetize today and how you interact with the technology today is something that you should consider, and how to have sort of that seamless user experience that your consumers today expect when they’re shopping on something like Amazon, you know, what she just went through? That’s not currently the experience with blockchain technology, it’s entirely new, right? Even the nomenclature, the usage, wallets and fees and gas and acquiring cryptocurrency for your consumers, that is entirely new and scary sometimes. So you need to choose very well how to interact with this technology and partner with a company and an infrastructure provider that abstracts some of those challenges to your audience, but also brings in the crypto ecosystem and crypto natives, who you know, this is their bread and butter and eat live and breathe Ethereum and Bitcoin on a daily basis. So let’s talk about Circle and how we can help you and brands and companies, you know, craft that experience. One of the reasons why NBA top shop and dapper labs has been so successful, in addition to you know, sports being cool is that they created that user experience that really mirrors you know, web today on how to shop through the internet. So they let you put in your debit and your credit card very seamlessly, just with the shopping cart experience, as you would expect. But they also let you pay with traditional crypto currencies like usdc or aetherium, or Bitcoin. So they’re catering to both audiences, both mainstream and crypto, creating a user experience where it abstracts the blockchain that is behind the scenes but gives that digital ownership. And so when you’re choosing a provider, you really need to think about the provider, where do they fit in that spectrum? Can they cater towards you know, why different users and give you the ability to create the user experience that you want for your brand, and not interfere with the user experience that your brand wants to create? So that’s what Circle does, and excited to work with all of you all on how you’re thinking about building new web 3.0 experiences using blockchain technology.
Will Scougal
And just on that point, Rachel, I thought one of the things which I found so interesting about the NBA top shop site is that they don’t think that you have to dig really hard to find any mention of NF t ethylone. any mention of sort of all of the language around blockchains. And I feel like it’s not just a UX job. It’s also been a sort of linguistic marketing, incredible linguistic job. And I guess, I guess it’s just interesting to know, how do you find it? How do you position it with your audience that they, like, understand what the ownership means without getting too scientific is going to be a challenge that we’re all going to have to, like, tackle.
Rachel Mayer
Exactly. Like in their checkout flows, there’s, you know, no mention of providers, no mention of how the funds settled behind the scenes or how they’re, you know, bearing blockchain worlds. And it’s just in the fine print where it’s like, hey, this NFT, go to the block explorer and see how you own it. And right now, you know, it’s a closed loop marketplace, but pretty soon, like similar other marketplaces that you show, you’ll be able to trade and and and, you know, send each other these NFT’s publicly transparently on the blockchain. So that’s another consideration for a brand is, do you want to start out in a closed loop fashion, and sort of limit that ownership to just your ecosystem? Or do you want to start with the entire world and there’s different trade offs and benefits to both of those. But the success of dapper is sort of, you know, introducing to their consumers little by little with bite sized pieces of information to get their feet wet with NFT’s.
Brandon Aaskov
That’s a great answer. I’m gonna take a little shift on this one and talk about more of the artist community. So Damara I’m going to use for this one to start with, although Kerry expect you probably jump in here too. There’s like a pretty large community of 3D artists out there, I’ve seen some really weird stuff, I’ve seen some pretty great stuff they could be tapping into this and probably already are. But if you think about it right now, we already have kind of basic formats like JPEGs, and videos. If you think about where the technology is headed, what’s the advice you would give to those creators so that they can stay relevant and profitable as the market gets flooded with more and more creators.
Damara Inglês
And I think that my first advice would definitely be to cultivate your own artistic perspective and your own identity before just trying to follow the mainstream, because what happens in both the fashion industry and the digital art industry is that when there is a sort of meta narrative, then everyone, including the consumers, and the clients think that everything should look exactly like that. And then that aesthetic is consumed, is thrown away, and you are thrown away with it as well. So my advice would definitely be to explore your digital identity within this space. That’s the best way of remaining relevant. Also understanding what is unique to you, to your experience, and to your voice in ways that instead of just remaining relevant in this field, you’re also a valuable contributor. And you’ll also become a mirror to the industry so that more and more people can feel that they are represented to your own particular perspective, and voice. And also, it’s very important to keep track of all the new templates and technologies that are coming up that you can definitely take advantage of. So that you can also sort of ride the wave of hype that these templates come with. For example, Lens Studio just released the 3D body tracking technology that is like a revolution, as someone that has been experimenting with augmented reality for a few years, this is really the first tool that I can see that will truly elevate my work and make it look more realistic, make it look more in the moment. And I was lucky enough to be collaborating with Spectacles and Snapchat, and had early access to the 3D body tracking feature. But as this feature is being more and more talked about, obviously, the Lens Studio in the Snapchat community is looking for this particular type of filter. So if you make it first, you’ll also be one of the first people to define the aesthetic of a new template, or of a new product. And it’s definitely very exciting. I was trying on the DEPT® bomber jacket online on Snapchat, sorry, earlier today. And you know, you move your arms and it moves with you it’s just completely unthinkable a year ago, I would never think that this would be happening today or that there would even be a need for it today. So I think that the best way to remain relevant is definitely to remain authentic to yourself and to your identity. And to keep track of all of these amazing, amazing creative opportunities and features that are coming out.
Kerry Murphy
I would like to add to that it’s also very important to really get people following you. And that really an authentic connection to the blockchain industry is necessary because there’s a lot of people jumping on, they’re just trying to make a quick buck right now because it’s a hype. So for any 3D artists who’s coming there should come with concept, should come with the attitude that they’re there to stay, and not just to like throw something onto a marketplace and trying to monetize on it. Because that’s what that’s what the buyers want. That’s what the users want. When you ask the people who are doing the big investments in the blockchain space. You know what, why would they invest in our piece, they really just need to have an authentic connection to the artist and know that they are there for their artistic and creative reasons for their storytelling reasons. For something that has to do with their digital identity. As Damara says, something that really connects to the space and what I love about it is that it creates a space. A whole new generation of artists like this artist called Ferocious who just did a drop with the RTFKT guys, digital sneakers for 3.1 million. He’s done multiple different drops on his own as well. And he’s making a lot of money. This kid is 18 years old. And he really came into the community with the storytelling aspect of an 18 year old artist, my parents hated my art several years ago. And here I am with my community and they are investing hundreds of 1000s investing millions in my art, people see him as the new key herring of the digital art generation, that story really resonates with that community. And with that space, it really provides kind of like this idea of the new world. We don’t have to be tied to the Sothebys and Christies in the traditional art world, all of a sudden, we have this whole new medium of a whole new generation of people coming in there from a very, you know, genuine perspective. And if anything, no from the blockchain community, they know that they despise data. They’re not all about status quo. They’re not all about, you know, big organisations, they’re all about decentralisation. So, you know, independent people, and, you know, just trying to do things differently than they exist, let’s say in, you know, the old world versus the new world. So for me, it’s the exciting space. And, you know, like, we’ve been in it for over two years right now. And there’s been a lot of people jumping into the space over and over again. And the question always is, do they stand the test of time? Are they here just kind of like dropping in? Are they here to stay? Because these cycles, they come and go, we’re in this hype cycle right now, it will die out at some point, who are going to be the people that are going to stay in the blockchain community when the money’s not flowing anywhere? And who are the people that are going to be stepping out again? Because you know, it’s not a trend. It’s not a hype. But uh, yeah, it’s definitely gotten so much better. And I recently read a letter by somebody who’s knee deep in the blockchain space. And he talked about cycles from 2011, 2013, 2017. And now 2021. And he really says that vision is going to be the one main differentiator between all the players in this hype.
Brandon Aaskov
I’m going to agree with that as well. I think that you’ll find that people will rise to the top of that pile, I’m personally wondering if they’re gonna end up getting hired by these luxury brands, or be their own luxury brands like create the supreme that is the digital version or something like that?
Kerry Murphy
I think that’s the latter. Absolutely.
Brandon Aaskov
I hope so. Right?
Damara Inglês
Yes, I just wanted to add up that I definitely think that they will become their own future and present culture, digital fashion brands, like The Fabricant for example, there’s no comparison between the experience of The Fabricant and the experience of a physical luxury brand.That these are two completely different niches. And our challenge right now is to respect both of them. And if luxury analogue fashion brands really want to be part of this niche, and really want to be relevant and create an impact on these needs, the best thing that they can do is to collaborate with artists and designers that already have a voice in this space that are already followed. Because like in any niche out there, this is very important. And if there is no authenticity, people just run away from a concept. So I think that right now it’s really about building up the energy. So that it’s not just a fad. As many people I see, I really do believe in the power of NFT and digital artists, for it to be a new era of interaction and consumption of art overall.
Brandon Aaskov
I don’t think you could have made a better segway to the next question, which also ties into a few Q&A questions, which is about authenticity. Rachel, you’re probably gonna weigh in here too. Like there’s any artist who can sell their goods directly to consumers on blockchains multiple, right? But verifying that authenticity can be hard because what’s to stop someone from making multiple copies? What’s to stop someone from selling in multiple marketplaces or multiple times? So even though it’s not in the spirit of blockchain, it seems like we still defer to brands or clearing houses or whatever to be the trusted authority in the matter, the Sothebys and Christies of the digital world. What is the future of verifying ownership when those records exist on multiple blockchains in multiple wallets? Do we look to some one solution to rule them all? I don’t know how we end up dealing with this. How we prevent forgeries.
Rachel Mayer
Right. I can chime in.
I mean, there’s different blockchains that you can issue NFT’s on. And so the proof of ownership can exist amongst those different blockchains. Obviously, the question is how do we enable the creative economy and sort of marry that proof of ownership in the real world and how your brand and identity interacts with the real world today with those blockchains? Today, at the end of the day, proof of ownership relies on who actually carries the private keys across any blockchain, right? So you as a brand and as a creator, you need to choose if you want that ownership yourself, and it’s pretty scary to be your own bank, and custody, you know, 24 words long see phrases and whatnot? Or do you want to delegate that to, you know, such a custody provider? Maybe someone like Circle who can custom NFT’s and, you know, as, especially as NFT’s rise in value, like do you really want to be the owner of an NFT that’s worth, you know, millions of dollars. So that’s one aspect is the real ownership lies and who custody, the NFT’s. But then how do you represent that ownership to your audience? I think it’s going to be a combination of your existing social and community channels, to marry those two worlds. So they, your audience will be able to see sort of your, you know, public wallet address where you’ve minted the NFT. And when you tweet it out, or when you post it on, you know, social and Instagram, and Snapchat, you as the existing sort of brand and creator ownership, you know, voicing that you’ve mentioned this in a tweet married with that proof of ownership with your keys, through the public wallet address is going to be sort of the nuance of how digital ownership represents going forward. And then you can choose where to distribute that across any any, you know, any one of the horizontal or vertical marketplaces that is about one through going forward.
Brandon Aaskov
Now Will,l do you see like, kind of stuff happening at Snapchat, where let’s use the Gucci sneakers example? What if I had the skills to make my own Gucci sneakers? And I made them and I’m like, yeah, and there’s my filter, and there you go. And then Gucci can like send you a takedown notice or whatever? Have you had to deal with any of that stuff yet?
Will Scougal
So in that respect, that would be between you and Gucci. And with a platform that you’ve used to a certain degree. I think I’ve talked about authenticity, just from another aspect, it’s from the brand point of view. And I think that’s in terms of, I think, for me, just to take a step back from the NFT space and just look at it from a marketing perspective, one of the things that I think brands look for, or have always looked for is authenticity and marketing. And with NFT’s with augmented reality, what you have is a an experience where people are welcoming the brand into their world, certainly when you look at say Gucci sneakers or Adidas sneakers, or any kind of product trial AR experience that may lead on to a purchase of the actual product or of an NFT, what you’re finding is that people are spending the time to choose to pay attention to that experience, right and attention, supposedly, a diminishing commodity within marketing is really not people are just choosing to spend their time paying attention differently, is diversified as opposed to diminished. And I think that with augmented reality, what you’ve suddenly got is this amazing, well crafted high attention experienced lead space where people are choosing to spend time with brands, but they’re doing it totally on their own terms, you have to choose to open up the platform to scan the world to launch augmented reality and to spend time with it and then share with your friends before you go and make a purchase. Really the intent and the attention is all in the hands of the consumer at that point. And then I think that if you build on that again, and look at emotion, which supposedly is also something that’s very hard to build at the moment, well, TV ads are getting shorter, and ad people have ad blockers on again, with augmented reality. And with NFT, you have this opportunity to create an emotional connection through the craft and through the moment that the person is spending with the brand, before they go on to kind of grow and take that action. So for me kind of authentic, the way we think about authenticity is how brands can use this emerging technology. And actually, I don’t think it’s a fad. I think it’s something that’s just going to grow. As we’ve already said, we’re seeing more and more time with our digital lives being just our lives, right? Our augmented reality, virtual reality, extended reality is just the new reality. And I think that people are going to be spending increasing amounts of time and giving increasing amounts of attention and actually building bigger, more emotional connections with these experiences as they become richer and more developed. So I think for me in that respect, authenticity is something that is going to grow in time alongside values of attention and emotion. As people become more familiar with this as an experience that just is a part of the new reality.
Brandon Aaskov
Yeah. Well said. So, we’ve been getting a bunch of questions in the chat. And I’d like to take a couple of them and wrap this up pretty quick. But it’s a bunch of stuff around sustainability and environment, which I was surprised about. Maybe that’s just because I’m American. But it’s, you know, it’s definitely top of mind for a lot of people. There’s one particular question that I thought was interesting, which is to say, you know, we’re going back and forth on, you know, is it green energy? Is it okay? Could you use green energy somewhere else? And then we kind of got down this rabbit hole of why do we even need NFT’s in the first place? Do all brands need them? Could they make them without doing it on the blockchain? Or there? Should we look at the breakdown like that? Should we look at it like, hey, there’s a sustainable thing we’ve been doing for a while, there’s this newer thing that uses a lot of energy and everyone’s jumping on that bandwagon? Do we? How do we fix that problem? Do we? Is it a marketing thing? Is it just switching? Do we just all get off of Ethereum? I don’t know. There’s a big question there.
Rachel Mayer
I think there are a lot of misconceptions in this place. And it’s, you know, similar like, Is it just the JPEG, there’s a lot of headlines going on, particularly when it comes to carbon emissions. So there’s a tonne of nuance. So let’s start with a theory. Obviously, it’s one of the chains that has the most adoption when it comes to NFT’s. But there are other chains that Isabel put forth, in her presentation around, you know, proof of stake. And Ethereum in itself is actually migrating to proof of stake. And it’s real, and it’s coming pretty soon. I won’t go into sort of, you know, the trade offs or differences between proof of work and proof of stake. But long story short proof of stake is less energy intensive, because it combines verschil aspects of mining. Similarly, there are layer two solutions that are helping Ethereum communities go faster and minimising some of these work, as they migrate to proof of stake. So this is something that will be solved within the next, you know, year, 18 months. And if it’s really important for your brand, then you can choose to adopt an NFT standard on a third generation blockchain that already supports proof of stake to address the question on, you know, miners, you know, minting fees in latent capacity, it is true, there is excess capacity right now, in places like Iceland, or you know, that use geothermal energy. And these miners are simply solving for a latent demand that exists there and where renewables are actually under utilised and under discussed. So there’s a tonne of nuance, and it’s all relative, as you said, right, relative to specific emissions from a specific artist that might be travelling to Art Basel in a year. And now you know, because everything is virtual and if NFT’s let you take advantage of digital ownership, they won’t take that private jet to basketball anymore. So there’s a trade off between the physical and digital worlds. And in the digital as you said, the trade off is proof of ownership versus not. So it’s a nuanced topic. It’s headline grabby, but the crypto and blockchain community is definitely working on solving some of these proof of work versus proof of stake issues. And if you are as a brand new, you can choose to make a stake, no pun intended, in your marketing, by choosing a specific blockchain and being really conscious about it.
Brandon Aaskov
That’s great. Will, did you have something to say?
Will Scougal
Yeah, so, I was just going to jump in and say, I think there are other elements to the environmental point as well. I mean, you know, what you’re finding with product trial is kind of trial without travel, right, we can open a shop wherever we want to, we can put, you know trainers on people’s feet wherever they are, they don’t have to actually travel into town or travel to a shop to go and make make the purchase. So there’s a kind of small environmental impact that increases with scale, when you look at it in that respect, and I think that’s possibly also kind of tied to manual manufacturing, too. And lots of other areas of industry where augmented reality is being applied to remove the need for physical presence and physical state. So I think that as Rachel said, there are many nuances to it. But I do think that we’re in a period of positive change and the responsibility sits with all of us, right like to make kind of considered and thoughtful decisions about The way that we, you know, interact with the world with the work that we do.
Isabel Perry
And possibly just to add to that, I think also, if you think about people flying around the world to look at art and buy art, and then compare that to being able to buy digital art, there’s trade offs in that as well. But I think you are sort of with all of these environmental issues. Why? Why would it be worth doing this? And I think that it’s also interesting thinking about NFT’s as that contract. So beyond the digital art and digital fashion, actually, if you’re using NFT’s to represent a contract, which might previously have had a lot of middleman in the middle. It’s more verifiable, it’s instant. It’s and it’s sort of decentralised and permanent. And there are obviously huge benefits to that. That’s great.
Brandon Aaskov
Well, we’ll just do one little layup question for everyone as we wrap this thing up. So we’ll go around. We’ll start with Isabel. And then I’ll go from there. But basically, can you give me like one or two lines about what’s making you excited in this space and where it’s headed? Which is, that’s a loaded question. So let’s try to do one or two lines. I realise. So Isabel I’m putting on the spot first.
Isabel Perry
All good. Um, maybe often, Art and Design comes first in new technologies. And I think that the next five years will be a sort of sweet shop of interesting thoughts around how you could actually apply NFT technology and even just thinking about NFT’s for the last two weeks has just made me, I was fairly new to this until two or three weeks ago, and I’ve just been totally seen the light on their potential. Damara?
Damara Inglês
Oh, um, I think that the, what… Okay, let me reformulate this, the most exciting thing about digital art in general, and NFT’s for me right now, is the concept of ethno digitization, which is the idea of making sense of technology to your own cultural identity, and livelihood and background. And I see it as a great tool of being able to construct a more global aesthetic or virtual goal of global culture. There is more inclusion of different backgrounds, because as of right now, specifically talking about fashion, we have the ethnical fashion or the Oriental fashion, and then the mainstream standard, Western fashion. But with digital fashion, I see a lot of inclusion of different cultures. And I hope and expect these different cultures when they actually impose themselves on the mainstream analogue fashion industry as well.
Brandon Aaskov
Rachel…
Rachel Mayer
So I’ve been in the crypto industry a long time, and I definitely feel like NFT’s and what we’ve seen in the last two months, you know, people say that crypto is going mainstream. And this is a mainstream moment. But I actually like to think of it as now mainstream is going crypto the other way around where you feel that push towards the industry. And, you know, it’s been many different use cases for the last 10 years. It’s been primarily sort of trading and speculation and you know, store of value and NFT’s are really just enabling the creator economy, for moving rent seeking intermediaries, letting them have control over their demand, and how they get to monetize and making their fans, owners of their work and using a new technology. And so it’s just turning users into fans and fans into users and having a technology power that is really powerful and really powerful to see actually happening at scale, which is pretty cool.
Brandon Aaskov
I like that the mainstream is going crypto stealing that. We’ll do Will. And then do Kerry, so Will your next.
Will Scougal
Great, thanks very much, so I totally echo all of those. I’m very excited about everything that everyone’s mentioned so far. And I think that I’ll go back to something I said at the beginning which is around craft really quite simply. I just love the idea that a lot of what we’re seeing now is kind of a focus on digital craft and the accessibility and ownership of that not just being democratised as well as the accessibility to being creative itself. I think that’s all wonderful to see. And then just to kind of bring it back to them to improve from a marketing perspective. I think that is relevant to brands as well in that they’re able to create something that’s just a quality with which people choose to spend time with an idea of people being able to choose to spend time with a brand and as opposed to being interrupted with it, I think is unique. I think that AR in itself is probably the most interesting format to come along since film for me personally. And I love to think we’re really at the end, not necessarily at the beginning, but we’re really starting to see a mass tipping point, as we’ve mentioned a couple of times. So I think all of that’s very exciting.
Brandon Aaskov
That’s a great segway to Kerry.
Kerry Murphy
Well, we call it the NFT hype right now, non fungible token hype, and NFT is an acronym and I would love to just throw in another acronym that’s been around for a long time to that, I think will be the next hype within blockchain. Now it’s DAO, decentralised, autonomous organisations, I think that’s what I’m the most excited about in this space. And I think within eight to ten months that we’re going to have a DAO hype. We are going to be super excited about that as we are about NFT’s. And that, to me, is the most exciting space because it is really talking about the blockchain economies, it’s really talking about community. It’s really talking about the decentralisation of multiple different aspects. And it’s really asking for participation from people to start taking part rather than just be passive observers. Now you have to be an active participant. And that’s what’s going to be necessary moving forward not only in blockchain, but in you know, general society. So yeah, I think there’s going to be a lot of interesting DAO’s coming up in the next few months, especially this year.
Brandon Aaskov
Man, I could not have ended this talk better than that was, that’s great. If you’re excited by this talk, go Google that and you can learn more, you can crawl down the rabbit hole a little deeper. Thank you, everyone so much for joining today and taking the time out of your day to join this panel and educate the masses and talk about this stuff with like minded people. Thank you as well for putting together a presentation and I had a great time. I hope everyone else did. If you need to reach out to me for any questions, my name is Brandon Aaskov. [email protected], that’s probably the fastest way to reach me. And yeah, I’d love to talk about this more soon. I’m sure we’ll hit another bubble soon. So we’ll talk about it then.
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