Nike’s surprise 2021 acquisition of the virtual sneaker brand RTFKT is the latest addition to the list of pandemic-era crypto bets that ultimately didn’t pan out.
The four-year-old company said Monday it would wind down operations in a statement on X. RTFKT will launch a website showcasing its work, which has spanned NFTs of digital, Takashi Murakami-designed avatars to virtual versions of Nike Dunks. But by the end of January it will halt its services, such as the elaborate online quests it has occasionally made its community members complete to access its products.
The decision comes less than two months after Nike named Elliott Hill its new chief executive as the company works to revive its struggling business. The RTFKT deal was an early move by his predecessor, John Donahoe, to put Nike at the forefront of the then-booming world of digital fashion, an initiative that also included the launch of its own web3 platform, .SWOOSH.
At the time, RTFKT received a good deal of fanfare and was hailed as “the Supreme of the metaverse.” But though blockchain-linked products developed an intense following in the crypto community, they haven’t developed into a mainstream commercial business for Nike, or any other brand.
Hill has a number of serious challenges to deal with at Nike’s core business, chief among them reviving innovation at the brand, restoring relationships with wholesale partners and cleaning up distribution of overextended styles like Jordans, Dunks and Air Force 1s. RTFKT’s shutdown could signal that Nike is cutting back on projects that don’t serve its primary business. Before Donahoe’s departure in September, Nike had already begun paring back technology jobs in sweeping layoffs.
“I think Elliot wants the brand to focus on the fundamentals again and not on the peripheral stuff like NFTs and blockchain,” said Matt Powell, sports industry advisor for consultancy Spurwink River. “Let’s make great product. Let’s listen to our customers. Let’s get closer to our customers. Let’s simplify things.”
Nike has not made any public statement on the reason for RTFKT’s closure, and the company did not reply to requests for comment.
RTFKT was established in 2020 by Benoit Pagotto, Chris Le and Steven Vasilev, who came together through their love of video games and sneakers. The brand rose to prominence during the pandemic crypto boom with virtual-sneaker NFTs that started fetching headline-worthy prices online. Just before RTFKT and Nike announced their deal in December 2021, the brand released the series of “CloneX” avatars it created with artist Takashi Murakami that would become the foundation of its online community and be resold for tens of thousands of dollars in some cases.
The Nike acquisition — terms of which were never disclosed — marked a major milestone for RTFKT and the crypto industry as a whole as the sports giant signaled its intent to explore the possibilities of NFTs and virtual goods. RTFKT envisioned creating an ecosystem of virtual items that linked back together in a vast world-building enterprise, of which Nike naturally became a major part.
In April 2022, Nike and RTFKT unveiled their first virtual sneakers together, which owners could customise with different digital skins. Eventually, Nike would allow shoppers to buy physical versions of the shoes — in limited quantities — which were based on its Dunk silhouette and looked much like they’d stepped straight from a video game.
But at the same time, the crash of crypto prices and declining consumer interest in NFTs through 2022 left many projects struggling. RTFKT’s NFTs saw their values plummet in line with the decline of the wider industry, even as the brand tried to keep its community of fans engaged online with drops of new items.
Complaints that activity from the brand had slowed became more common, however. In March 2024, Nick O’Neill, a prominent member of the crypto community on X, reported that RTFKT would shut down this year, though the brand at the time appeared to still be at work on new projects.
The news of RTFKT’s closure Monday came as a disappointment to many in the crypto space, especially those who had invested large sums in RTFKT NFTs over the years and expect their items will ultimately become worthless. During an X Spaces session joined by more than 1,000 X users, people vented their frustrations with RTFKT.
“It’s a lot of money that I think people spent on these things as an investment and as a community,” said one X user who claimed to have personally spent heavily on RTFKT items.
Others are still betting on a robust future for web3 and crypto-based virtual goods more broadly, especially in the wake of Donald Trump’s election. Trump counted numerous crypto advocates among his supporters and has vowed to make the US the “crypto capital of the planet” when he returns to the presidency.
“I personally am not reading too much into it,” Gmoney, the crypto-industry influencer behind the self-proclaimed web3 luxury brand 9dcc, said of RTFKT’s fate. In his view, the move says more about Nike’s business and internal challenges than the state of web3.
After RTFKT revealed that it will close down, Pagotto, Le and Vasilev all released statements online expressing gratitude to the RTFKT community.
“What we built together was more than a brand – it was a revolution, thankful forever of every creator, dreamer and builder who made RTFKT possible,” Pagotto wrote.
