Nike NFTs Dominate Other Fashion Brands In Royalty Collections

AUG 25, 2022 • 5 Min Read

Adrian Von Catangal

Disclosure: Members of our team may own NFTs or tokens related to the projects mentioned here. These statements are intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in a mint. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.

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🚨 In Case You Missed It

  • Sam Trabucco, co-CEO of Alameda Research, announces his resignation. Caroline Ellison will continue as the sole CEO of the trading firm.
  • Coinbase gets into liquid staking derivatives with Coinbase Wrapped Staked ETH (cbETH), an ERC-20 token that represents ETH staked with Coinbase.
  • Alexey Pertsev, arrested Tornado Cash developer, is denied bail. Pertsev must stay in jail for upto 90 more days, despite not being charged with a crime.
  • Head of NFTs at Uniswap says they are in talks with 7 lending protocols with the goal of turning Uniswap into an interface for all NFT liquidity.

📊 Nike NFTs Dominate Other Fashion Brands In Royalty Collections

  • As of August 25th, Nike remains the most successful fashion brand to issue NFTs. The company has amassed a cumulative trading volume of $1.25 billion and cumulative royalties of $87 million across all NFT collections.
  • On the other hand, Adidas trails significantly behind Nike, despite ranking second with a cumulative trading volume of only $174 million and cumulative royalties of only $4.7 million.
  • Nike’s most successful NFT collection is Clone X, which was launched by RTFKT (pronounced ‘artifact’) in Nov-2021 with a 5% royalty on secondary sales. Two weeks later, RTFKT was acquired by Nike.
  • Since then, RTFKT has continued to release multiple NFT collections. Currently, 86% of the cumulative royalties earned by Nike come from just 3 collections – Clone X, Clone X Mintvial and MNLTH. These 3 collections make up $1.17 billion of Nike’s $1.25 billion in cumulative trading volume.
  • The size and popularity of Nike and Adidas outside crypto naturally factor into Nike’s advantage, but is not the only factor influencing success. While Adidas’ Into The Metaverse features only 2 items for its 20k+ owners, Nike’s Clone X is a PFP project with distinct rarities and artwork across all NFTs.
  • For more on NFTs, Delphi members can read our latest NFT Insights here.

BAYC Gets BendDAO-ed

  • BendDAO is a peer-to-pool lending platform for NFTs. In simple terms, NFT owners can instantly borrow up to 40% of their “blue-chip” NFT’s floor price in ETH. This is supplied by lenders who earn interest on the ETH they deposit into the protocol.
  • BendDAO currently supports 7 major NFT collections: BAYC, MAYC, CryptoPunks, Azuki, Clone X, Doodles & Space Doodles.
  • BendDAO has risen into the spotlight this week because a significant number of BAYC loans are now at high risk of being liquidated due to the falling floor prices.
  • This sparked fears of a liquidation cascade where liquidations lead to falling floor prices which lead to further liquidations.

  • The BendDAO situation presents a potential opportunity to purchase top-tier PFPs at bargain prices IF floor prices drop significantly and trigger a liquidation cascade. The gradual lowering of the liquidation threshold to 70% over the next month will also put added pressure on the existing loans.
  • There is a reasonable chance of this scenario happening in the coming weeks since the NFT markets have been quite weak. If floor prices do not recover, more BAYCs will get liquidated as the liquidation threshold falls. This can cause prices to fall.
  • At some point, new buyers will come in to set a floor and halt the downward price spiral. Selling pressure eases as the number of at-risk BAYC loans drops.
  • It is worth keeping an eye on the auctions:
    • You can purchase NFTs at a discount to OpenSea during the auctions.
    • If you review carefully, some of the auction NFTs have rare traits and are worth more than floor prices.
    • Be wary as some NFTs on BendDAO are flagged as “stolen” or “suspicious” items on OpenSea (since BendDAO cannot detect or filter for this).
  • Peer-to-Pool NFT lending is still unproven and risky (especially for lenders), largely because of the lack of dependable liquidity for NFTs.
  • Despite the high APYs (as high as 100% earlier in the week, now ~16%) for lenders, we remain highly cautious as there is a real chance you may not be able to withdraw your principal if something goes wrong. If you want to be a lender, consider peer-to-peer platforms like NFTFi instead.
  • For more on BendDAO, Delphi members can read our latest NFT Insights report here.

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