Taking opulence online: How blockchain is beckoning luxury brands

Blockchain is becoming increasingly integrated into the corporate world, and luxury brands are particularly well-positioned to reap the rewards of digital innovation, which is set to play a part in an industry that’s constantly seeking to reinvent itself. 

The Covid-19 pandemic has taken a significant toll on the luxury sector, which shrunk by as much as 22% in 2020, setting its growth back five years. The Big Four fashion weeks, for instance, saw Paris, Milan, London and New York welcome only a handful of their usual stylista guests or put their shows online as much of the runway set stayed away. 

Out of the crisis, however, other opportunities are rising as blockchain beguiles brands in the luxury business that were wondering how to navigate the new landscape.

“The big brands are beginning to see that there are new channels, new markets that they can be marketing and selling into,” Zilliqa co-founder Max Kantelia told Forkast.News in a video interview. Zilliqa is a layer-1 blockchain with smart-contract capability.

A collector himself, Kantelia says blockchain will bring two major changes to the luxury industry: proof of provenance and the tokenization of physical collectibles.

As the NFT sector has gained momentum this year, major luxury brands have begun to embrace it. Such storied fashion houses as Louis Vuitton and Burberry have been exploring NFTs in gaming, and Gucci released a four-minute NFT film created for its 100th birthday that was snapped up at a Christie’s auction. 

Yet the virtual-world fashion experience remains difficult and somewhat inelegant for an industry that prides itself on its sleek appeal. The process of setting up Ethereum wallets and the like can be a turnoff for even the most ardent luxury lover.

Kantelia says luxury brands need appropriate venues, and suggests the next step is to create digital assets that complement, not replace, real-world ones, bridging the gap between the physical and digital universes. 

Listen to Kantelia’s full interview with Forkast.News Editor-in-Chief Angie Lau to learn more about what he sees as the digital future for luxury goods, arts and gaming, the regulatory environment in which it will operate, and why blockchain interoperability will underpin the development of the emerging ecosystem.