The Newcomer of the Luxury Industry — NFTs
The digital world can unleash limitless potential in the luxury industry. Today, luxury brands are commonly using online platforms to introduce their products and services. Those same luxury brands engage in collaborations with companies using new technology such as blockchain and AI, in order to launch unique digital campaigns or develop exclusive digital products or services, as they are eager to market their brand globally to a wider audience. To discover the digital world of luxury, visit our previous article here.
Blockchain is emerging as a disruptive technological advancement. Luxury brands actively started to integrate blockchain technology through different use cases, in particular through NFT creation. This brings unprecedented innovation into the world of luxury, but what exactly is a NFT and how will it transform the luxury industry?
What is NFT?
Blockchain technology is a secure and unhackable system that is based on cryptography. A non-fungible token (NFT) is a digital file with a complete and verified identity and ownership information.
As the name implies, NFT is not interchangeable with any other assets as each individual NFT is unique. This is an extremely valuable tool for NFT creators, who can digitally “autograph” their own assets, even if the asset is widely shared online by thousands of people on multiple platforms. NFT brings digital scarcity and proof of ownership and will enhance the company image of brand and retailers.
The Usage of NFTs in the Luxury Industry
The luxury industry still has a long way to go in exploring the applications using blockchain technology and all its potential business opportunities.
The luxury world has already witnessed luxury giants like Louis Vuitton, Gucci and Dolce & Gabbana unveiling blockchain projects and for some, launching their own collection of NFTs. As an example, Dolce & Gabbana has recently partnered with NFT marketplace UNXD to launch a collection of NFT wearables called ‘Collezione Genesi’ for its clothes and perfume products. Every piece of the collection will be exclusively auctioned on the UNXD marketplace. NFT is a form of unique digital assets and is the next development of digital fashion. Gucci is partnering with a platform to develop 3D clothing as NFTs and will transfer them to clients.
Pain Points in the Luxury Industry
Multiple challenges have always plagued the luxury industry including:
- Counterfeiting
Counterfeiting is one of the key concerns when buying luxury assets in secondary market. - No Benchmark Price For Pre-owned Luxury Items
Price of pre-owned luxury assets differ greatly across different counties, sales channels and the selling price depends on each individual seller, so owner does not know the true value of the asset - Real Value Has Not Been Unlocked
Luxury assets and collectibles have high resale value in general but they are usually idle and not circulating. - Illiquidity
It is too slow and burdensome for pre-owned luxury assets to be sold or get financing through traditional channels and banks do not accept luxury assets as loan collateral.
LuxFi has recognized the pain points highlighted above and decided to take a step further with the use of new technology and the creation of a NFT Marketplace.
How Can LuxFi Use NFTs to Improve the Luxury Industry?
LuxFi is a real-world luxury asset-backed NFT solution that relies on a unique algorithm. It is a bridge between real-world luxury assets and digital assets (NFTs) to ensure sustainability in the Luxury industry. LuxFi will eliminate counterfeiting by linking physical assets with their virtual NFTs in the blockchain so the information becomes easily accessible, immutable and transparent.
To achieve this, LuxFi has developed different solutions in its ecosystem, including its NFT Marketplace. After the luxury item is authenticated by a professional verifier in LuxFi’s network, the physical product is associated with its NFT through fingerprint technology for finished products. For products we work with brands and manufacturers, we put an anti-forgeable NFC chip inside each product during the manufacturing stage. Owners have access to the product profile and history with the NFT card that contains a unique QR code. For the buyers, they can redeem the product after payment or the physical assets can be stored in local custodial/escrow for investment purpose.
This can tackle the challenges mentioned before with access to complete transparency of the product information (including its origins), verification of authenticity and full traceability even after products are being resold several times.
Another positive addon LuxFi ecosystem brings to the luxury world is the ability to unlock the true value of luxury goods. LuxFi collects real world price data from global sale channels both online and offline. The data is analysed and benchmarked against global trends to provide accurate pricing, interest rate and liquidation value for each NFT. The process allows the luxury items owners to more easily trade their products in the NFT Marketplace, borrow loans using luxury items as collaterals or use fractional ownership of the luxury item in order to reinvest in other assets.
The Future of Luxury
For many years, the luxury products became idle physical assets on closets, although their value remained the same or even increased with time. LuxFi aims to reshape the landscape of the Luxury industry with the use of new technology and blockchain as powerful tools, removing the counterfeits, unlocking the true value of the luxury items and allowing the users to trade these assets across the whole world with an ease of mind. While the luxury industry has newly adopted the use of NFTs, LuxFi is already making a headstart into expanding the functionality of NFTs, providing the best experience for communities worldwide who wish to have a safe, transparent and user-friendly experience.
The mission of LuxFi is to provide a NFT marketplace where anyone can create NFT that’s backed by real-world luxury asset for buying and selling, auction trading, collateralized lending.
LuxFi will provide a new way to unlock the true value and increase the liquidity of the real-world luxury assets through blockchain technology.
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.
Stay tuned on our social media channels:
Website: https://www.luxfi.io
Twitter: https://twitter.com/luxfiofficial
Telegram Announcement Channel: https://t.me/luxfinews
Telegram Official Group: https://t.me/Luxfiofficial
Medium: https://luxfiofficial.medium.com
