Why Nike’s RTFKT folded

RTFKT, the virtual fashion and sneaker platform co-founded by Benoit Pagotto, Steven Vasilev, and Chris Le in 2020, is shutting down. The news, revealed Monday, sent ripples through the brand’s dedicated Web3 community known for its fervent support. “Today, we’re announcing the plan to wind down RTFKT operations,” the brand shared in a statement on X (formerly Twitter). Alongside plans to launch a digital archive of its work, RTFKT confirmed that its Web3 services will cease by the end of January 2025. RTFKT was acquired by Nike in December 2021. While the terms of the acquisition were not disclosed, RTFKT raised an $8 million seed round in May 2021 led by capital market company Andreessen Horowitz that valued the company at $33.3 million. It was the first major success story for the digital fashion space, which has been grappling with mainstream acceptance since its early days. The results were impressive. In February 2021, a virtual sneaker drop in collaboration with crypto-artist FEWOCiOUS sold out in seven minutes, generating over $3.1 million USD. Just a month later, RTFKT auctioned a pure gold virtual sneaker on Chinese marketplace Treasureland for $28,000. April 2022 marked another milestone with RTFTK's debut Nike collaboration, the Nike Cryptokicks. Featuring 20,000 NFTs inspired by Nike’s Dunk Genesis shoes, the drop fetched up to six-figure sums among collectors – including a Takashi Murakami-designed NFT that sold for $134,000. By 2023, RTFKT had reportedly amassed $185.3 million in NFT revenue, cementing its status as the “Supreme” of the digital fashion world. However, the brand’s meteoric rise began to stall last year, mirroring the broader slowdown in the crypto market, the waning relevance of NFTs, and a wave of controversies undermining the sector’s credibility. In response, the brand attempted at making inroads with industry leaders in the physical fashion space to diversify its offerings beyond virtual sneakers. Collaborations included those alongside fragrance disruptor Byredo, luggage label Rimowa, and NFT hardware company Ledger. But community dissatisfaction had long been a shadow over RTFKT's operations. On platforms like X, the brand’s replies often overflowed with frustrated investors airing grievances over quality concerns, lack of clarity, and limited communication from the team. RTFKT's shutter also comes amid a strategic shift for Nike, now under the leadership of CEO Elliot Hill, who took the helm in October. The decision to wind down RTFKT signals a recalibration of Nike’s digital ambitions, says collector and 9dcc founder Gmoney. “It’s sad to see Rtfkt scaling back just as the space gears up for a potential bull run,” he tells Jing Daily. Discontent has surged among RFKT's followers on platforms like X and Discord, with many branding the company’s folding as a “rug pull.” Frustrated investors lament having poured hundreds – if not thousands – of dollars into NFTs now rendered essentially obsolete. RFKT's swan song will include an updated website chronicling its journey, alongside one final product drop this month titled MNLTH X Featuring the Blade, though details remain sparse. It is unclear whether RFKT's team will remain within Nike’s ranks. Regardless, the brand’s abrupt closure stands as a cautionary tale for companies navigating the complexities of NFTs and Web3 in 2024.

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Why Nike’s RTFKT folded