Nike is being sued by owners of non-fungible tokens (NFTs) issued by its RTKFT digital fashion subsidiary who claim their assets are now worthless following the company’s decision to shutter its Web 3.0 operations last year.
RTFKT was founded in 2020, offering shoes and collectibles that could be used across various avatars and applications in the metaverse. Nike purchased the company at the height of interest in Web 3.0, hoping to use RTKFT’s user base, as well as its expertise in game development engines, blockchain, and augmented reality (AR) in targeting customers in digital environments.
Although NFTs were often marketed as digital items with collectible value, many were implicitly positioned by sellers or interpreted by buyers as investments. The value and volume of NFT sales have collapsed since the market peaked in early 2022, with one report suggesting as many as 95 per cent might now be worthless.
With dampened consumer enthusiasm, and growing interest from regulators who have long suspected many NFTs are unregulated securities, many firms have retreated from the sector.
OneFootball, which spent huge sums on licences to create NFTs based on major soccer leagues, has since returned to its core competency as a digital soccer platform, while DraftKings has closed its Reignmakers platform. Earlier this month, Candy Digital, which held licenses for Major League Baseball (MLB) and others was sold to Futureverse.
Nike’s decision to do the same is further evidence that the original vision prophesied for Web 3.0 and the metaverse has failed to materialise and that there could be legal consequences to follow.
By SportsProMedia
