Foresight 08: Can NFTs really be sustainable?

Jul 9

A bi-weekly newsletter diving into the concepts, people and brands who are shaping the future of fashion, beauty and retail.

Welcome back to Foresight!

There was so much great feedback from the previous newsletter theme around the metaverse that I’ll be continuing to look for ways to weave the topic into what we’re talking about. It’s a must-read if you missed it.

When we first talked about NFTs in Foresight 03, I noted the environmental impact and how I was keeping an eye on the space. We have some interesting progress here and it looks like there’s already lots of interest from consumers who operate on these exchanges. We’re also talking about two luxury brands testing XR experiences, Balenciaga and Louboutin, further cementing how game developers hold significant power in the luxury sector now and in the future.

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IDEAS, INSIGHTS & FORWARD THINKING PERSPECTIVES

Planning for digital sustainability

As excited as I get talking about the virtual realm and everything that exists in it, we can’t ignore the fact that NFTs require thousands of computers to validate transactions and “can consume as much electricity per year as the entire country of Libya.” It’s predicted that this type of energy use at today’s rate has the potential to raise the Earth’s temperature by two degrees. As consumers’ focus on sustainability continues to increase, luxury and any other industries dabbling in the NFT world need to consider less energy intense alternatives. This is where “digital sustainability” comes in. A relatively new term, digital sustainability is defined as “the balance of utilizing digital transformation in meaningful ways that don’t contribute to the overarching carbon footprint.” Put simply, as tech-savvy players produce look books, skins, video games, and NFTs, it’s necessary to mitigate the physical and virtual waste created in the process. A few suggestions on how to reduce this waste from AR company Dazlus AG and digital passport platform Arianee include:

Building from digital templates. Consider building product bases from existing templates as many garments, such as t-shirts and pants fundamentally have the same shape.
Create around seasonal events. Once new items or projects have launched, they typically sit on a server eating up energy. How about driving sales around big, seasonal events rather than months-long periods. For example, China hosts shopping festivals around Singles’ Day and when everything is sold, everything is removed from severs.
Use blockchain to support secondhand resale. Although blockchains have a bad environmental reputation, it’s possible they can be part of the solution. “Using a more energy-efficient side chain of Ethereum called L2, the French startup has created digital passports for physical goods.” The ability to track and authenticate high-end items makes the process of entering the resale market much more seamless and can even provide transparency into how the garment was made, including labour certifications and where raw materials came from.

This all leads to a gap in the market and The Aria Network, an integrated marketing group, has a solution. Aria Exchange is an NFT trading platform that alleviates environmental concerns by offering carbon-neutral methodology for minting its NFTs. “Aria alleviates that concern by offering a carbon-neutral methodology for minting its NFTs. Aria uses the Hedera Hashgraph network to create its tokens, whose blockchain employs a proof-of-stake process rather than the more common proof-of work model, allowing it to consume far less energy.” The exchange will also calculate the footprint of its NFTs in partnership with Carbon Analytics and purchase carbon offsets to “redeposit” more than twice its withdrawal back into the environment. Although carbon neutrality and carbon offsets are a bandaid solution, it’s smart thinking while perhaps Aria or someone out there introduces a permanent solution.

Balenciaga and Louboutin explore extended realities

A follow up to Balenciaga’s Fall 2021 collection presented in the video game Afterworld: The Age of Tomorrow, the brand has teamed up with video game developer Quantic Cream for the collection’s campaign. Unlike the game, viewers have no control over the narrative. Instead, viewers follow the CGI protagonist through the augmented reality of Afterworld, which is entered through an AR headset and showcases the collection on characters throughout dystopian environments. Using motion capture to create animated versions of real-life people, it’s clear that Balenciaga is no longer competing with other fashion houses, but rather with players like Netflix and celebrities who increasingly engage in extended realities such as Travis Scott. In Foresight 03 we talked about the need for retailers to embrace game developers— fashion houses are going to have to use the same approach to creative assets and experiences.

Christian Louboutin recently introduced LoubiFuture, a combination of augmented and mixed reality to create an immersive experience for the launch of the brand’s Spring-Summer 2022 men’s collection. The experience begins with a music video featuring French singer Julien Granel, using extended reality to take the viewer on a journey through Loubitown and its surrounding virtual worlds. The VR experience then leads to a double showroom to view the latest collections. Upon clicking on each displayed product, users can view a 360-rotation to showcase every part of the item. The showroom styles are also available to view in AR (the best part!) by scanning a QR code. Upon testing, I was able to do a full 360 walk around objects without a single glitch and even put my phone “inside” the products to see inner detailing. I caught myself doing double takes between my screen and the floor space in front me. Louboutin teamed up with animated gaming app Zepeto to mix AR and XR to create this experience, further proving the point above on fashion and game development partnerships. You can check out LoubiFuture here!