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digital daily: Just Do It

Just Do It: To many, NFTs are wall-art. Ingroup items displayed for a room of guests or a social profile. Rarified air. Wearable objects, like jewelry and sneakers, are where art collides with popular culture. They are all around us, interactive, and with broad participation. Brands that create wearable art generate primary revenue, but the secondary market is where these objects come alive. As they change hands, their cultural meaning evolves. So does their price. The digital property rights of NFTs alters this equation. Case in point is Nike, leading the charge by generating nearly $200M in revenue from digital sneaker NFTs since 2021. They lead by nearly 10x over runner-up Dolce & Gabbana. Interestingly, half of the revenue Nike captured was from royalties on over $1.3B in secondary sales. These are royalties that don't exist in the physical world. Brand strategies vary. Tiffany & Co. sold NFTs tying Cryptopunks to pre-paid jewelry, but few NFTs changed hands after the initial sale and no royalty fees on secondaries were charged. Recently, both primary and secondary sales of digital goods have fallen sharply with the bear market in digital assets. No volume, no revenue. But there is an opportunity to capture a larger share of economic activity. Brands have much to gain if they can foster revenues from secondary sales. Over the long term, their company valuations may depend on it. Players in the wearable art arena will almost surely take Nike's lead: Just Do It.