The Future of the Luxury Industry with NFTs
Over the last twenty years, the market for personal luxury goods has grown to its current valuation at approximately $4 trillion. Today, it exists in various forms all over the world such as jewelry, bags and accessories, clothing apparel, and more that could date back years or even centuries. In its current state, the luxury market is highly fragmented and plagued with issues of counterfeiting, unfair working conditions and unethical sourcing of raw materials. The blockchain innovation could tackle the future challenges in the real-world luxury industry which include counterfeiting, illiquidity and asset price fluctuations.
The past months have been filled with multiple promising blockchain-related projects from luxury brands including Gucci, LVMHWha, Prada and Cartier blockchain consortium, and more recently Dolce&Gabbana with its first collection of NFT wearables.
While the luxury goods industry is performing relatively well despite the world uncertainties and crises, LuxFi sees an opportunity to further explore its possibilities. Here’s how the future of luxury goods could be shaped with the help of NFTs, DeFi and LuxFi.
How to Improve the Future of Luxury Assets
Although NFT was first disruptive to the world of Art and Design, LuxFi now considers it as the new trend and an opportunity for luxury brands. Throughout the digital ages, the world is shifting into a place in which blockchain would complement various industries and online services. The benefits in terms of transparency, immutability, authenticity and traceability on such platforms prove to be some of the most important factors in persuading luxury goods companies to adopt blockchain into their brands strategy.
Moreover, luxury brands are starting to think that NFTs hold great potential in revolutionizing the luxury goods industry. NFTs bring security, authenticity and transparency into the industry. It combines democratization, decentralization and demystification of assets onto one platform. Therefore, more and more luxury brands are building partnerships with different blockchain companies to integrate NFTs into their system.
The main goal is to serve consumers with transparency and traceability during the whole lifecycle of a luxury item. On a global scale, blockchain can support sustainable practices with tremendous advantages and entirely redefine customer experience. LuxFi aims to build a secure and decentralized ecosystem and provide to the luxury industry a safe place for assets and owners.
The DeFi Innovation — LuxFi
LuxFi is one of the world’s major DeFi ecosystems for luxury assets. It is a highly accessible platform that enables real-world luxury asset-backed NFTs creation for buying/selling, collateralized lending, auction trading and fractional ownerships in our ecosystem.
This ecosystem comes as an alternative and unique solution for pre-owned items and second hand retailers.
LuxFi offers same day collateral loans to luxury asset owners, where the value of each asset-backed NFT is backed by real-world data. The interest rate charged to borrowers is based on market trends and demand of the luxury asset on collateral. It enables users to get loans in the form of fiat currency or stablecoin.
Users who want to borrow any of the supported cryptocurrencies, stablecoins, or NFT via LuxFi must pledge collateral that will be locked on the protocol. These assets must be over collateralized and will enable up to 70% of that collateral value borrowed. These collateral ratios are determined by the protocol and are controlled through the DeFi platform of LuxFi.
How LuxFi Pushes the Luxury Industry Forward
The ecosystem promotes product authentication and traceability with real world assets-backed NFTs. The digital profiles of the assets are created and permanently stored into LuxFi’s system. Issues related to traceability, sustainability and authenticity are recurrent to all luxury brands, and blockchain product traceability solutions will effectively tackle these challenges, empowering safe and confident buying decisions.
With LuxFi, the luxury items are handed to professional verifiers for authentication. Additionally, LuxFi is using the Product Fingerprint Technology to link each physical asset with its virtual asset (NFT) and an NFT card containing a unique QR code and NFC chip is created. Each NFT is provided with accurate pricing that is backed by real-world data, unlocking this way the true value of each asset which is fundamental for a sustainable luxury ecosystem.
The authentication process and use of blockchain technology will ensure the safety of transactions for both the buyer and the seller, and avoid the circulation of counterfeit items that generates losses for the luxury industry. Protection of client privacy and data becomes a major advantage, as the information on the blockchain cannot be changed, hacked, or be tampered with.
LuxFi aims to provide a successful tool in supporting the future of the luxury industry. With our technology, LuxFi will innovate the luxury industry by making it a safer environment for owners and consumers worldwide, effectively addressing the prevalent issues facing the luxury industry and bridging the gap between real-world luxury assets and DeFi powered by NFT.
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About LuxFi
LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.
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