With major brands and celebrities diving into Web3 and blockchain, StockX steps into the ring with NFT Vault.
2021 was a major turning point for the world and culture as a whole with companies like Nike and Adidas gearing up for what the future of Web3 holds. Now, the legitimate Marketplace of Things, StockX, is getting in on the action. As the company has grown into a multi-billion dollar business on the brink of an IPO, the platform which started with just sneakers has evolved to include everything from streetwear, trading cards, and electronics. And now, NFTs.
The new service - unveiled on Tuesday January 18th under the name Vault NFTs - ties non-fungible tokens (NFTs) to physical sneakers stored in StockX’s facilities, allowing users to buy, sell, and trade on-platform using underlying blockchain technology. The project launched with eight initial sneakers, ranging from the iconic Ben and Jerry’s SB Dunk Low and highly sought after A Ma Maniere Air Jordan 3 to the original adidas Bad Bunny Forum Low.
However, while the idea sounds great in practice, there remains a great deal of questions surrounding execution. After taking a deep dive into the information and FAQs provided by StockX, it raised more questions than answers. Here’s what we came away with...
To start, where are the physical sneakers tied to the NFTs coming from and how is StockX sourcing those pairs? To that point, it’s important to note that “the purpose of the NFT is solely to track the ownership of and transactions in connection with the associated product.” Furthermore, perhaps the most practical and obvious use case of blockchain is authentication, yet, NFTs issued by StockX “do[es] not independently authenticate the associated product.”
There also appears to be a surprisingly low level of transparency within the new project. If “StockX maintains custodial authority of all NFTs traded on the platform,” how does ownership work? Does StockX serve as the owner or the intermediary if they’re the ones holding ownership? This also begs the question of why users “will not see the transaction history in the blockchain ledger,” but will solely be available for reference on StockX’s product page(s). If this was intended to align with decentralized principals, it doesn’t appear to be doing so based on the information we know so far. Not to mention, which blockchain is actually being used here?
Another interesting piece we discovered was that “the redemption process is not currently available” and once it does eventually launch, users “can expect to receive the item in 45 days or less.” To that end, fees for withdrawing a physical sneaker from StockX’s NFT Vault include a $35 fee plus $14 shipping and any applicable sales tax.
As far as other limitations are concerned, use of StockX’s NFT Vault is exclusively available on desktop at this time - not via the StockX app. It’s also interesting that payment on the platform will continue to take place in USD - StockX has not yet implemented any crypto wallet integrations or payment methods. Additionally, as it currently stands, “transferring NFTs from StockX to another wallet is not available,” however StockX describes this as a “top priority feature” they intend to implement in the coming months.
According to StockX's Terms and Conditions, "In some cases, per the applicable Additional NFT Terms, StockX may automatically redeem your NFT for an Experiential Component, at its sole discretion, in which case StockX may remove the NFT from your portfolio and you will cease to own the NFT."
While the future remains to be seen with what this project holds, it’s a great signal for the road to mass adoption of NFTs, blockchain, and Web3 as a whole. For more sneaker news, follow us on Twitter and download our mobile app.