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Into the Vault: The Reason Why Nike is Suing the StockX NFTs

By February 23, 2022March 23rd, 2022NFTs

StockX NFTs - Nike vs StoxkV - AIO BotEver since the virtual world takeover, there has been a LOT of drama – to say the least. And, the bigger it gets, the more problems it’s going to face. It’s a part of human nature we can’t avoid – even in the virtual world! Especially since there are no laws or regulations monitoring the Crypto world activity yet. So, technically speaking, all’s fair? Therefore, we can expect a lot of REAL legal issues to arise from this VIRTUAL reality. This is exactly the thing that has people at odds with the whole Nike VS StockX NFTs.

Nike totally has every right to file this lawsuit against StockX. But also, StockX has a pretty legit and solid argument. See, it gets pretty confusing! So, let’s just break it down for you and explain the whole story!

THE VAULT

Vault NFTs_ StockX_ - AIO BotOn January 18th of this year, StockX announced their Vault NFTs. If you didn’t know, StockX is one of the biggest online streetwear resale marketplaces – specializing in hyped products and deadstock sneakers. Basically, people use it to buy and sell culture and all kinds of in-demand products, especially sneakers!

BUT, for a long time now, these StockX transactions all used physical products. People buy the sneakers online, they move for authentication, then they reach the buyer. After that, people either wear them, collect them, flex them, or just resell them! However, Stock NFTs are here to change that through what they called THE VAULT NFT. Here’s how it works:

  • Customers invest in NFTs tied to physical products – they call them Vault NFTs. 
  • Therefore, the buyer owns a corresponding physical item that they can take at any time!
  • In the meantime, StockX stores these Vault NFTs in secure, climate-controlled facilities.
  • Buyers can instantly resell the Vault NFTs without having to wait or pay for delivery!
  • No more hassle or fees of shipping and physical authentication!

Each Vault NFT has a unique serial number tied to an authenticated product in the StockX Vaults. These vault NFTs are “minted” as ERC-1155 tokens on the Ethereum blockchain lowering transaction fees, minimizing environmental impacts, and creating ownership.

*NOTE:
ERC-1155 is a token standard on Ethereum. This ensures that these contracts are compatible with decentralized exchanges. So, you can buy and sell using your crypto wallet and not need a broker. Read more on Ethereum token standards here.

NIKE VS STOCKX NFTs

StockX NFTs - AIO BotSo, the main argument behind the StockX NFTs is digitally owning sneakers, saving money, and saving storage apparently. The Vault gives you access to Vault NFTs that are apparently the fastest way to flip sneakers online. BUT, why does the Swoosh have such a huge problem with this?

Well, you see, the StockX NFTs are completely based on real-life Nike sneakers. In other words, the digital work that you purchase is basically a picture of a Nike sneaker. Nike is basically saying that StockX is like a freeloader who found a loophole. These StockX NFTs use Nike trademarks and are selling for a much higher price than the average resale. This also confuses people into thinking that Swoosh and StockX are perhaps working together on a new NFT project. This isn’t true -hence why Nike filed a lawsuit against StockX on February 3rd. 

StockX_ Verified - AIO BotNIKE CLAIMS INCLUDE

“StockX almost exclusively used Nike’s marks to launch its Vault NFTs because it knew that doing so would garner attention, drive sales, and confuse consumers into believing that Nike collaborated with StockX on the Vault NFTs, and StockX is using Nike’s trademarks to market, promote, and attract potential purchasers.”

STOCKX DEFENSE

“Our Vault NFTs depict and represent proof of ownership of physical goods stored in our vault that customers can trade on our platform. StockX Vault NFTs are not digital or virtual sneakers.”

“We do not state or imply that our Vault NFTs are associated with, sponsored by, or officially connected to any third party brand and StockX undoubtedly has the right to provide our customers with this new and innovative approach to trading current culture products, and we plan to vigorously defend our position.”

Click here for the full statement.

FINAL THOUGHTS

Consumers can replace the StockX NFTs for physical products at any time. This is StockX’s main argument – that the NFT is like a traceable digital receipt. But, the actual physical sneaker costs MUCH less than the NFTs! When they request StockX to actually ship their shoes, the NFT is “burned”. But, these StockX NFTs are reselling at higher than the average for the physical kicks.

Like the Vault NFT Dunk Low Retro White Black reselling at an average of $782. The actual Dunk Low Retro White Black is currently reselling at $280! Or, the NFT Dunk Low Ben & Jerry’s Chunky Dunky reselling at $3,008 versus the physical $1,486 resale! So, make it make sense, StockX!

We still don’t know what the verdict for this lawsuit is. But, we can say one thing for sure, this definitely won’t be the final