Metaverse

The Virtual “Cryptokick” Sneaker Brand RTFKT, Owned by Nike, Shuts Down

YEET MAGAZINE

03 Dec 2024 • 4 min read

Nike’s unexpected acquisition of the virtual sneaker brand RTFKT in 2021 now joins the growing list of pandemic-era crypto ventures that ultimately failed to deliver.

By Mia Rodriguez – YEET MAGAZINE | Published: December 3, 2024, 10:00 AM | Updated: December 3, 2024, 3:45 PM

Founded in 2020, RTFKT announced on Monday via X that it will cease operations. The company plans to launch a website to showcase its creations—including Takashi Murakami-designed NFT avatars and virtual versions of Nike Dunks—but will discontinue all services by January’s end. This includes the intricate online quests that had been a hallmark of its community engagement.

The decision comes shortly after Nike appointed Elliott Hill as CEO, signaling a strategic shift for the company as it focuses on reviving its core business. The RTFKT acquisition, an initiative by Hill’s predecessor John Donahoe, aimed to position Nike as a leader in digital fashion and included launching its own web3 platform, .SWOOSH.

At its peak, RTFKT was dubbed the "Supreme of the metaverse." However, while blockchain-based products attracted interest within the crypto community, they failed to break through as a sustainable commercial model for Nike and other brands.

Elliott Hill faces significant hurdles at Nike, including reigniting innovation, mending relationships with wholesale partners, and optimizing distribution for popular models like Jordans, Dunks, and Air Force 1s. The closure of RTFKT reflects Nike’s pivot back to core operations. Even before Hill’s appointment, Nike began scaling back on tech-oriented projects, laying off numerous employees in these areas.

"I believe Elliott wants the brand to return to basics, focusing on its core strengths rather than speculative efforts like NFTs and blockchain," said Matt Powell, a sports industry advisor at Spurwink River. "Let’s get back to creating quality products, engaging with our customers, and simplifying our approach."

Nike has yet to issue a public statement regarding RTFKT’s closure and declined requests for comment.

RTFKT was founded by Benoit Pagotto, Chris Le, and Steven Vasilev, who came together over a shared passion for gaming and sneakers. The brand gained prominence during the pandemic crypto boom with its virtual sneaker NFTs, which fetched high prices online. In December 2021, just before partnering with Nike, RTFKT launched its "CloneX" avatars in collaboration with Takashi Murakami. These avatars became a cornerstone of its online community and often resold for tens of thousands of dollars.

Nike’s acquisition of RTFKT marked a significant moment for both the crypto and fashion industries. While financial details were never disclosed, the partnership was seen as Nike’s commitment to exploring NFTs and virtual goods. RTFKT aimed to create an interconnected virtual ecosystem, with Nike as a key player.

In April 2022, Nike and RTFKT introduced their first virtual sneakers, customizable with digital skins. Later, Nike offered limited-edition physical versions of these sneakers based on the Dunk silhouette, merging digital and real-world fashion.

By 2022, however, the cryptocurrency market faced significant downturns, and consumer interest in NFTs waned. RTFKT’s NFT values fell alongside the broader market, despite attempts to maintain engagement through new product releases.

In March 2024, crypto influencer Nick O’Neill speculated that RTFKT was likely to shut down, even as the brand continued teasing upcoming projects.

Monday’s announcement of RTFKT’s closure disappointed many within the crypto community, particularly those who had invested heavily in its NFTs. Some now fear their digital assets may lose all value. During a discussion on X Spaces with over 1,000 participants, users voiced their frustrations.

"A lot of people invested significant money in RTFKT, both financially and emotionally," said one X user who claimed to have spent extensively on the brand’s items.

Despite setbacks, some remain optimistic about web3 and virtual goods, particularly in light of political developments such as Donald Trump’s re-election campaign, which has promised to make the U.S. a global leader in cryptocurrency.

Following the announcement, RTFKT’s founders shared statements expressing gratitude toward their community.

"What we built together was more than a brand—it was a movement," Pagotto wrote. "We are forever grateful to every creator, dreamer, and builder who made RTFKT possible."

The closure of RTFKT raises broader questions about the sustainability of digital fashion and NFTs. While these initiatives initially showed promise, their long-term viability remains uncertain. Brands must reassess consumer needs and focus on creating lasting value in an ever-evolving market.

Source: Business of Fashion
Image Credit: www.businessoffashion.com

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