I'm not surprised. Honestly, none of us should be. Nike's recent NFT debacle, culminating in a class-action lawsuit, is a textbook case of what happens when centralized control tries to squeeze itself into a decentralized world. I’ve spent my life advocating for youth as digital entrepreneurs. I view this experience as both a cautionary tale and a missed opportunity.
Ownership? More Like Illusory Ownership
The promise of NFTs, of Web3, is true ownership. True ownership. You, the user, control your assets. You decide what to do with them. You’re not at the mercy of a corporate juggernaut who can abandon your investment with a single press release.
That's exactly what Nike did. They purchased RTFKT, designed digital sneakers and collectibles, and recruited buyers to snap them up. They just closed up shop. Fast forward to now and investors are stuck holding digital assets that in many cases are worth only pennies on the dollar. Unfortunately, one Australian customer is already shelling out millions of dollars due to this sudden shutdown. They are now the plaintiffs in a class action lawsuit, seeking more than $5 million in damages. I applaud their courage. This ain’t just about the bucks, this is about the principle.
What ownership, we wondered, what ownership when it wasn’t ownership but rather a license to participate in Nike’s centrally controlled ecosystem. The lawsuit argues unfair and deceptive acts had occurred, arguing these NFTs had never been registered or sold as securities and that Nike had misled customers. End up with what sounds like just a really classic corporate land grab in shiny new Web3 camo. This is precisely the type of thing that breeds public distrust of the entire industry.
Innovation Suffocated, Creators Sidelined
Think about it. The magic of Web3 is in the permissionless nature of our community. Anyone can make, anyone can innovate, anyone can share. For all of us though, it’s a fairer and more level playing field—most significantly for young, aspiring digital artists and entrepreneurs. As I mentor thousands of bright, energetic young folks they’re brimming with creativity and passion, ready to create the next disruptive innovation in the tech universe.
Acquire a company already out there doing this (RTFKT), plug them into their current system, and keep full ownership. Where's the room for organic growth? Where’s the room for the community to influence the overall direction of the project? Where's the real Web3 spirit?
It sounds a lot like the old music industry model, before the internet blew it all to pieces. A few powerful labels controlled everything, dictating what artists could create and how they could distribute their work. Web3 had promised to be just that – a seamless, direct connection between creators and their audience, without any pesky gatekeepers. Nike, unfortunately, chose to be a gatekeeper.
One of the fundamental principles of blockchain technology is that it is transparent. Each transaction is permanently stored on a transparent public blockchain ledger, where anyone can view it. This fosters trust and accountability.
Transparency? More Like Opaque Walls
Centralized platforms tend to be black boxes. Instead, these decisions are made in boardrooms, sometimes across the country, far removed from the community they affect. Nike’s recent decision to close RTFKT brings this into stark focus. Investors were blindsided. No consultation, no advance notice, just a cold turkey announcement that their assets were now worth far less.
This lack of transparency piles distrust on top of a resentment that has been brewing. This contributes to the misconception that Web3 is just a corporate get-rich-quick scheme. It misses the opportunity to prove itself as a true revolution in ownership and control.
Web3 is all about community. Developing a deep, energetic, diverse community is key to any great project. A community can't be manufactured. It’s something that must be cultivated, cultivated with reverence and a fierce conviction to empower it.
Community? A Marketing Buzzword Only
And clearly, Nike recognized the RTFKT community as an excellent marketing opportunity. They thought they could ride the wave of hype around NFTs. They failed to fully live the spirit of community ownership and engagement. They controlled the narrative, they dictated the assets and through this effort, they controlled the fate of the community.
A Web3 project done right embraces its community, empowers them to inform the direction of the project and provides them with a platform to speak and act. Nike missed this crucial element.
The solution is not to give up on NFTs or Web3 entirely. Far from a lesson to more centralization, the answer is to redouble on decentralization.
Decentralization: The Only Real Solution
We have to fight for projects that are actually community-owned and community-governed. Projects that value transparency, which empower creators and IP owners, and truly put the users in control of their assets. These projects understand that Web3 is not all about the money. They work to build a more equitable, inclusive and democratic digital future.
Nike’s fallout should be a cautionary tale. It should serve as a reminder that centralization and Web3 are inherently antithetical. Together, we can build a future with real decentralized ownership. With the continued support of our community, we can foster a wave of innovation and talent that will help creators everywhere succeed. Let’s make sure we don’t do that again and move forward in a better way. So let’s build a genuine Web3, one that truly delivers on the promise. This is not simply an issue of NFTs – it’s an issue of the future of the Internet. And I, for one, am not ready to throw in the towel on that kind of future.
Nike's failure should serve as a wake-up call. It's a reminder that centralization and Web3 are fundamentally incompatible. We need to build a future where ownership is truly decentralized, where innovation is driven by the community, and where creators are empowered to thrive. Let’s not repeat the mistakes of the past. Let's build a real Web3, one that lives up to its promise. This isn't just about NFTs; it's about the future of the internet itself. And I, for one, am not ready to give up on that future.
