Endstate’s Next drop features 1000 NFTs connected to the luxury Drop 2: Statecraft Sneaker.
ENDSTATE entered the Web3 and NFT space with an approach similar to RTFKT which was acquired by Nike. The comparison should stop there. ENDSTATE has been extremely conscious about focusing on the blockchain’s ability to tie the metaverse with physical products which can be verified utilizing your phone. Where RTFKT went the route of cool and quirky, ENDSTATE decided to be functional and fly (Look at the pictures here). With the endless number of questions around the crypto space, layoffs at Coinbase and most recently layoffs at Opensea (one of the biggest marketplaces for NFTs), ENDSTATE is offsetting the difficult environment with a more educational aspect of ownership in Web3. Their educational approach has tangible business aspects which could change the landscape of third-party retail.
The previous drops from ENDSTATE took place in a manner requiring participants to be aware of how to purchase an NFT. As popular as digital currencies have become, there is a fear of tech by a lot of the community who could benefit from understanding the process of opening a metamask account. A person unfamiliar with the blockchain and NFTs could be intimidated, and they may avoid entering the space altogether, losing the ability to become more empowered and knowledgeable. Moving this tech discussion from the metaverse to real communities, ENDSTATE has the ability to use a sneaker launch to integrate a fiscally underserved community, who actively participates in sneaker culture, to Web3. What do I mean? There is a reason the unbanked and underbanked communities in the U.S. still utilize check cashing services which are basically predatory lending platforms. The educational tools needed to trust traditional banking institutions are fraught with mistreatment of certain communities. Hanging this responsibility on a tech company might be side eyed, but some connections can’t be avoided.
The advantages of Web3 and the tech supporting it are currently held by those actively involved in the collecting of digital assets. ENDSTATE’s decision to move towards pop culture in the form of the sneaker industry is a neurotransmitter closing the synapse for more than the tech savvy. There have been other companies dabbling in the sneaker and NFT space, but those releases, even when paired with physical products, lived on the side of being splashy and loud. The sneakers ENDSTATE created are more elevated and wearable. The sneaker lives in that space where Timberland and other companies have attempted to merge, luxury sneaker boots. The appeal of the Statecraft is broader and as the pictures begin to circulate through sneaker media, they will reach that crowd who has heard of NFTs and crypto, but simply didn’t know how to begin. After earlier launches on both a marketplace and on their site, ENDSTATE has pulled back and developed a different delivery system where an owner who doesn’t even understand how to open a digital wallet, won’t initially need to own a wallet, or be actively involved in Web3. The Statecraft Drop is an on ramp to Web3 allowing a person to purchase NFTs using dollars and the purchase process will assist the buyer in building a wallet. The advantages for ENDSTATE don’t end with the sneaker purchase.
Authentication, Third-Party and Reshoring
The Drop 2: Statecraft sneaker will feature an NFC tag/chip in the tongue. The sneaker will also be made in the U.S. I recently discussed the benefits of bringing manufacturing back to the U.S. with the COMUNITYmade Knit Molino. As supply chains are disrupted, sneaker media, which has been built on delivering images and dates of sneakers to be released, has been thrown for a loop as reported release dates are constantly being pushed back and adjusted. Reshoring allows ENDSTATE to build and deliver their footwear in record timing (which they accomplished in their first drop). The Statecraft puts into action work Nike began in 2017. The Swoosh added QR Codes and embedded chips behind the labels of their sneaker releases. In 2019 the brand made a decision in some markets to add NFC tags. While Nike can track their products and their QR codes, and their chips help with their supply chain, the company has yet to really nail down the process of creating provenance. The Statecraft’s NFC chip will enable the owner to verify ownership outside of the blockchain using a phone. Nike has just added to their NFT lawsuit against StockX, that StockX is selling fake sneakers on the platform. I recently wrote that StockX’s website traffic has taken a hit since this announcement. In the sneaker industry third-party sellers from eBay to Poshmark have been purchasing authentication services. eBay bought Sneaker Con and Poshmark bought Suede One. There is often a feeling by consumers that buying fakes isn’t a harmful transaction. In the video below, the financial aspect of counterfeits is given an explosive number. In just one shipment stopped in New York the port authority seized fakes with a value of 31 million dollars.
The Statecraft eliminates the need for an authentication service. This isn’t revolutionary and could have been implemented years ago, but Statecraft’s decision to do this could lend the platform to creating alternatives for retail outlets. While ENDSTATE isn’t looking at a standalone tool to help individuals establish provenance of collectibles, there could be an additional play where ENDSTATE becomes the leader in aftermarket chips connected to the blockchain which could be embedded at the point of purchase. Imagine an alignment between ENDSTATE and Foot Locker where FLX account holders can request an embed establishing provenance at the cash wrap. I discussed Nike’s ability to disrupt authentication services in the following post: Nike’s Continued Investment in the CDO Confirms a Concern for StockX and GOAT – ARCH-USA, but If ENDSTATE is capable of implementing this the sneaker resale industry would be turned on its head. It’s no wonder the company recently attained 5.5 million dollar seed round. These are exciting times and Drop 2: Statecraft is a moment to watch.
