The rise of the Metaverse and Web 3.0 are set to disrupt multiple sectors including the billion-dollar global fashion industry. As the world moves from physical to digital, traditional fashion design can transform into virtual wearables that can be leveraged in both augmented reality (AR) and in real life. 

Megan Kaspar, managing director at Magnetic Capital and member of Red DAO — a fashion-focused decentralized autonomous organization — told Cointelegraph she believes that digital fashion nonfungible tokens, or NFTs, will be the largest NFT category of Web 3.0:

“Digital fashion NFTs include clothing, shoes, jewelry, accessories and more that can be worn virtually or within gaming ecosystems. These digital wearables are currently being used for speculative investment and collecting, to clothe avatars in decentralized games, to wear in augmented reality environments and to be superimposed onto photos and videos.”

While Kaspar is aware that digital wearables are being leveraged in decentralized gaming environments today — such as the NFTs utilized in Decentraland — she explained that in the next two years wearable fashion will be more interactive. For instance, Kaspar recently demonstrated how virtual NFT earnings and other accessories can be worn during video interviews.

Wear-to-earn model enters the fashion industry

Kaspar further mentioned that a “wear-to-earn” model will thrive in AR environments, noting that designers, brands and retailers will create clothes to accommodate digital closets. In order to build long-term relationships with consumers, Kaspar noted that designers will pay consumers to wear their virtual items:

“Brands will compensate customers for wearing pieces by giving them access to exclusive items or airdropping fashion pieces to their virtual wallets, or by paying them in the form of a fungible token.”

According to Kaspar, the Italian luxury fashion house Dolce & Gabbana will soon launch “D&G Family,” which is a community-based NFT drop taking place on the UNXD curated marketplace. “This will give consumers access to exclusive physical apparel only available through the drop,” she said. Dolce & Gabbana recently launched their “Collezione Genesi” NFT collection to underscore the power of metaverse wearables.

Related: Culture converges with blockchain as luxury fashion brands launch NFT collections

While Kaspar anticipates seeing UNXD as the first luxury platform to offer wear-to-earn features, other NFT ecosystems have started to adopt the concept. For example, Davaproject – an NFT project from the startup studio Unopnd – is currently building a system of avatar NFTs that reflect changes in various combinations on a blockchain network. A recent announcement claims that the project will initially consist of 10,000 avatar NFTs called “Dava,” which will be minted with 30,000 wearable items. Davaproject will set the rarity of each wearable, showing different rankings across a user dashboard. Owners will then receive benefits such as invites to community events, NFT airdrops, giveaways and new item drops by wearing these items.

Given the rise of virtual wearables, Norman Tan, editor in chief at Vogue Singapore, told Cointelegraph that he is bullish on digital fashion. Tan recently published Vogue Singapore’s September issue, which demonstrated the theme of “New Beginnings.” The September issue featured a unique print cover in the form of a QR code serving as a portal to two digital-only NFT covers. Tan said:

“Fashion and innovation has always been at the heart of what we do at Vogue Singapore. With the global September issue theme of ‘New Beginnings,’ we took the bold step to venture into the metaverse — the destination for a new class of digital artists and designers.”

Not only will digital fashion disrupt the Metaverse, Tan added that virtual wearables will help alleviate sustainability issues by introducing a post-waste economy. According to Kaspar, 40% of western closets go unworn, noting that digital clothes can be an eco-friendly replacement for physical items.

Source: Vogue Singapore

Additionally, virtual fashion shows are proving to be more sustainable and accessible. For example, NFT Runway — a company democratizing fashion by enabling brands to deploy in sustainable ways — is hosting a digital fashion show on Dec. 3-5 during “Fashion Community Week San Francisco.” The interactive fashion show will be broadcast live in the Metaverse with NFT versions of physical items recreated using patented 3DREALtm technology. This will allow audience participants to virtually “hop on” the runway to view each item while twisting their avatar around to view the clothing from any angle.

Oh Tepmongkol, chief operating officer of Ohzone, Inc — the company behind Ohzone’s 3DREALtm interactive technology — told Cointelegraph that it makes sense for both virtual and real-world fashion shows to incorporate NFTs:

“They are tokens that serve as certificates of authenticity, and they can bring a lot of additional utility to any clothing item. That could mean unlocking a digital version of the item or gaining special access to the designer’s online community. Plus, NFTs are easy to include, as they can be incorporated through a small QR Code for any piece of apparel.”

Tepmongkol added that NFT wearables also make it easy to donate to charities. For example, NFT Runway’s digital fashion show will consist of an auction to benefit a number of non-profit organizations with revenue generated from sales. According to Tepmongkol, smart contracts on the blockchain allow NFT Runway to set up “NFT endowments.” She said, “This is where charities can be set up to receive a portion of the sales through the smart contract in perpetuity.”

The future of digital wearables

While the concept of interactive digital fashion is still emerging, Kaspar believes that the wear-to-earn model will eventually be bigger than play-to-earn. Following the release of Axie Infinity, play-to-earn has become the most popular search term in the blockchain ecosystem.

Kaspar, however, explained that the wear-to-earn concept will undoubtedly appeal more to the mainstream — particularly women — rather than just gamers. For instance, Kaspar mentioned that digital wallets will soon resemble virtual closets, a feature that will attract many new users to the blockchain space: “Many companies are working on creating interoperable digital closets where you can move NFTs in and out of.”

Although innovative, Tan pointed out that online games helped inspire the rise of digital fashion:

“Fortnite and other online games as such created a whole new economy with brands like Balenciaga seeing the opportunity to reach out to these users in a digitally-native manner. This, coupled with the advent of COVID-19, saw more people online and exploring how they can best interact and express themselves in a digital sphere.”

Sebastien Borget, co-founder and chief operating officer of The Sandbox — a decentralized gaming virtual world using NFTs — further told Cointelegraph that the difference between play-to-earn wearables and wear-to-earn fashion-focused NFTs is that one is geared toward players and the other socializers. He added that The Sandbox will soon incorporate wear-to-earn NFTs to many of its games:

“Having wearables that reward users based on engagement is an interesting model that really fits the identity of avatar NFTs — the more time you spend using the avatar, the more players can earn.”

Tepmongkol further shared that NFT Runway is looking to bridge the virtual fashion industry together with decentralized games: “Some Web 3.0 metaverse spaces like Decentraland require some additional formatting and registration to work on their platforms; we are working on that as part of our long-term roadmap.”