In the Aftershock of the NFT Collapse, Fashion Has a Lot to Discover About Digital Ownership
With lawsuits mounting and priorities shifting, fashion must rethink what digital ownership really means.
The fashion world’s infatuation with NFTs once felt like a new chapter: one where owning a digital handbag, jacket, or sneaker would be as culturally important — and as profitable — as its physical counterpart. But in the wake of a sharp decline in NFT value and utility, a wave of disillusionment has followed. And now, with Nike’s NFT division RTFKT facing a lawsuit, the industry finds itself in a necessary reckoning.
The hype is gone. The avatars are fading. And yet, the question remains: What does it actually mean to own something digital in fashion — and why should it matter now more than ever?
⚖️ The Lawsuit That Signals a New Era
Nike’s web3 studio RTFKT (pronounced “artifact”), once a poster child for fashion’s NFT future, is now facing legal action from an unhappy buyer who claims they were misled about the promised utility of a high-priced digital sneaker drop. It’s a signal to the wider industry that expectation and delivery have officially diverged, and that NFT ownership, in its current form, lacks the clarity and protection consumers demand.
At its heart, the lawsuit highlights something brands and tech players largely ignored: digital ownership without accountability is just a transaction, not a relationship. And that gap is starting to matter.
💔 The NFT Hype Collapse
Over the last three years, fashion invested heavily in Web3: Gucci, Balenciaga, Dolce & Gabbana, and others launched NFT collections, built metaverse flagships, and collaborated with digital artists. But today:
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Many NFT collections have lost most of their value.
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Consumer interest has shifted from speculative assets to experiential utility.
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Brands are quietly pivoting away, or redefining their digital strategies under new names (like “phygital,” “immersive,” or “token-gated”).
The collapse didn’t just reflect market correction — it exposed fashion’s lack of a long-term digital ownership strategy.
🧠 The Misunderstood Promise of Digital Ownership
When NFTs first gained traction, they were touted as keys to digital exclusivity: proof of ownership, access, and status. But in reality, most fashion NFTs offered:
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No true interoperability (a Gucci skin in Roblox couldn’t be used in Fortnite).
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No guaranteed value retention.
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No legal protections that could mirror physical-world property rights.
This disconnect between what was marketed and what was delivered now defines the tension at the heart of the digital fashion space.
🚧 A Fork in the Road: Collapse or Reinvention
Fortunately, what comes next looks more focused, more useful, and more sustainable. Fashion’s digital evolution is far from over — but it must be grounded in reality.
Here’s how the next phase is shaping up:
1. Utility Over Speculation
Brands are shifting toward digital items with clear value: wearable NFTs in games, token-gated physical drops, loyalty systems, and identity tools. Digital ownership is evolving from collectibles to currency in community ecosystems.
2. Phygital Integration
Projects like Louis Vuitton’s €7,900 varsity jacket (which includes an NFT) and Adidas’s linked physical-digital drops show that blended ownership is the new frontier. Owning the digital means getting something tangible — and vice versa.
3. Digital Product Passports
As the EU prepares for digital product passports (DPPs), blockchain-based ownership will matter not just for marketing — but for regulation, traceability, and sustainability. In this way, NFTs may find new life as infrastructure, not art.
4. Legal & Ethical Clarity
Lawsuits like Nike’s will help define how digital assets are sold, protected, and litigated. In the long run, this will empower consumers and force brands to take digital commitments seriously.
🌐 What Digital Ownership Should Look Like
Fashion now has the opportunity to rebuild trust in digital goods by anchoring ownership to transparency, usability, and identity.
That means:
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Clear terms of service: What do you own, and for how long?
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Interoperability: Can your digital item move across platforms and apps?
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Cultural value: Does your ownership grant access, status, or belonging?
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Resale rights: Can you profit from your digital assets the way you do from vintage or resale markets?
These aren’t just technical checkboxes — they’re cultural mandates in a world that’s spending more time and money online.
🛍️ Final Thought: A Reset, Not a Rejection
What fashion needs now is a shift from storytelling to story-doing. From hype to infrastructure. From novelty to norms.
Nike’s lawsuit may be a blow to the past. But it’s also a chance to shape a smarter, more ethical, and ultimately more compelling future for digital ownership in fashion.
