Opinion / How do you turn an NFT into a luxury good? LVMH’s Tiffany & Co. and Dictador, dubbed the most luxurious rum in the world, encourage desirability in the metaverse to draw in millennials and Gen Z

Aug 18 , 2022

Tiffany & Co.’s limited-edition NFTiff pendant was offered exclusively to CryptoPunk owners. Photo: @TiffanyAndCo/Twitter

Colombian rum distiller Dictador collaborated with artist Richard Orlinski on the 5 Decades project – now they are producing ArtHouse Spirits DAO with Mariusz Waras

American jeweller Tiffany sold 250 CryptoPunk NFTiff pendants, offered only to holders of CryptoPunks, a collection of 10,000 NFTs on the Ethereum blockchain

This article is part of STYLE’s Inside Luxury column

The number of metaverse projects in luxury seems almost infinite. Practically every day there is a new initiative launched somewhere in the world, whether it’s an NFT collection, virtual real estate or a game.

Crypto virtual museum and NFT gallery. Photo: Shutterstock

The challenge: many of these projects create no value and no desirability. For example, during the Super Bowl, one well-known brand created a metaverse event that was marketed in a significant way. Sadly, it was a party where, besides the hosts, almost no one came. The few visitors who joined with their Oculus Quest virtual reality devices found themselves in a virtually abandoned space. Not a great signal to the digitally savvy Gen Z audience that the brand was trying to attract.

The Netflix of the near future? Photo: Shutterstock

It’s one of many examples where brands try to rush metaverse projects without doing their homework on a few parameters: why should someone engage? How is the value created? What is the endgame? Who is the audience on a platform?

Many metaverse platforms have a high proportion of kids in their teens and even younger (often masked when their parents sign them up), far from those that brands want to be targeting. Brands sometimes spend millions of dollars on channels where they meet the wrong audience or where they meet literally no one. It may help a little to get the word out in a press release, but initiatives like these can have a fatal effect on brand equity.

Hong Kong’s youngest NFT artist Arthus Ng Lai-yin, 8, led a workshop about NFTs at Invictus School, guiding pupils her age and their parents to create an artwork and mint it through the NFT marketplace, OpenSea. Photo: SCMP

The same goes for many NFTs. What many brands forget is that an NFT without a story is the same as a blank canvas. On its own it’s worth nothing. What makes it valuable is the artwork and the story it tells through the talent and fame of the artist. And yet, many brands launch endless NFTs that are dead on arrival. They do it to be part of the hype and due to FOMO.

However, there are bright spots – great examples of digital assets created that have the potential to appreciate in value over time, similar to physical luxury items like the Hermès Birkin bag, that has been increasing constantly in value over the last 20 years. One of them is the ArtHouse Spirits DAO by Dictador, often described as the world’s most luxurious rum.

Dictador Orlinski 5 Decades project. Photo: ArtHouse Spirits Dao

The brand has a long history of important collaborations with artists. Some of Dictador’s physical rum bottles achieve prices of US$100,000 and more, like those in the 5 Decades project: ultra-rare rum, stored for more than five decades and offered in one-off-bottles crafted by Richard Orlinski. Even the distillery in Colombia has become a spectacular art exhibition space where artists get total freedom to express their creativity.