The Retailer Spring Edition 2023

THE RETAILER

8

THE WORLD OF WEB 3.0

Nicholas Buckland Legal Director Lewis Silkin

Wendy Saunders Head of Financial Services Regulatory Lewis Silkin

JJ Shaw Managing Associate Lewis Silkin

Amy Earnshaw Trainee Solicitor Lewis Silkin

T his vision of the future may not be that far away. The virtual world of products and services offers great opportunities for brands, but there are potential bumps in the road ahead, not least regulation and asset protection A new dawn for NFT technology? It’s fair to say the NFT market experienced a dark end to 2022, with freefalling cryptocurrency prices playing a significant role in the sharp drop-off in NFT transaction volume (a 97% nosedive since the dizzying heights of January 2022 Bloomberg reported , citing data from Dune Analytics). Whilst some sceptics may question whether the NFT market will ever recover, others posit that the 2022 crash was simply a much-needed shake-up to the system (akin to a financial or real-estate cycle) that will usher in a new dawn for NFTs in 2023. The development of blockchain applications remains strong and the core technological propositions behind NFTs (i.e. as digital authentications of ownership, with attached rights and economical efficiencies) still present exciting potential use cases for brands as we head into the new year.

Innovation of NFTs We are likely to see a shift away from the ‘bubble’ of expensive collect ible jpegs in favour of truly innovative deployment of NFTs across the worlds of fashion, gaming, music, sport, ESG, food and entertainment. Take for example: • The rise of ‘phygital’ NFT projects in the fashion industry – meaning physical goods that are tied to NFTs – such as Prada’s Timecapsule drops or Spatial Lab’s LNQ. The convergence between NFTs and wearable items will see clothing and apparel serve as points of experience or access to exclusive events for owners. • Increased integration of NFTs in the video games space – afford ing players greater ‘ownership’ over their avatars, skins and in-game items and entrenching brand loyalty for the new genera tion of avid gamers. • Philanthropic NFTs – big brands in the food industry such as McDonalds and Campbells, and luxury houses such as Louis Vuitton, Nike and Gucci, that are releasing limited-edition NFTs to raise money for charity. • The expansion in the NFT real estate market – whether to acquire a house, an island, or a piece of land, we are likely to see more opportunities to invest and buy living spaces in the metaverse using NFTs.

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With the metaverse emphasising a new level of importance on brand image, brands must more clearly define their personality, core values and stance on social issues (if they choose to do so) more than ever.” Advertising Week