Let me ask you a question: when did you first hear speaking about NFT?

The concept of NFT has been around for quite some time (since 2014, to be precise), as the concept of meta-verse and the idea of selling “immaterial” things in a digital world. Most readers have probably heard talk of NFT only recently.
Yet today I think that it is important, for most of us, to get acquainted with the concept of NFT. In this short article, I’ll try to explain why.

About myself and my curiosity for a virtual world

I have always been fascinated by the concept of an Artificial World, and Artificial Intelligence, and I invested a significant part of my early years in academia researching these concepts (my Master Thesis and my PhD thesis focused on the development of a Supply Chain planned and controlled by intelligent machines called “Autonomous Agents”).

I ended up studying an amazing variety of things ranging from philosophy of knowledge and epistemology, to theory of chaos, and to the way insects societies are organized and how they work (want a reading suggestion? Try the Pulitzer winning: “Godel, Escher, Bach: an eternal golden braid” by Douglas Hofstadter, on the “emergence” of knowledge from hidden neurological mechanisms).

For this reason, when in 2003 Philip Rosedale launched the virtual world “Second Life”, I was planning to open my business there. I ended up launching my first start-up in the real world, when I realized that the world was not ready (yet?) to live in a metaverse, in symbiosis with their avatar.

Brief story of NFTs

An NFT is a digital token that represents the ownership of a unique item. NFTs are “minted” (i.e. coined, created) in the blockchain, through smart contracts that assign their ownership and manage their transferability. NFT are “Non Fungible”. Fungible means replaceable by another identical item; mutually interchangeable. While coins and banknotes are fungible, NFTs are not, meaning that each individual NFT – being unique – has a distinct value from other similar tokens.

Besides being unique and non fungible, have other characteristics: they are rare, they are proprietary (i.e. they have a specific ownership ) and exclusive (i.e. they are indivisible, exactly like a concert ticket for a specific seat cannot be split into two valuable parts), and are transparent as any activity (such as re-selling an NFT that you recently purchased) can be publicly verified.

What is the value of an NFT?

• Twitter co-founder, Jack Dorsey, sold his first tweet for $2.9 million. The tweet simply read “just setting up my twttr” and the proceeds were destined to charity by Dorsey.
• Mike Winkelmann, famous digital artist known as Beeple, sold an artwork obtained as the collage of 5000 digital images, called “Everydays, the first 5000 days” at $69.3 Million, making this the most expensive NFT to-date, but also one of the most expensive creations of a living artist.
• The Bored Ape Yacht Club is a collection of 10,000 unique NFTs. Rarity is one of the reasons why these NFTs are valuable, but also the fact that the NFT owners have the exclusive membership to an online hangout club called the swamp club. All 10,000 NFTs sold out in one day, for a reasonably cheap price (below $200), and now they are trading for north of $80,000 (80kUSD being “the floor”, or the lowest priced NFT in the collection).
• A serigraphy from the street artist Bansky, bought for $95,000, was burnt, digitalized and transformed into a piece of crypto-art, whose NFT sold for $380,000

In Luxury, several brands are creating and launching their own NFT collections, such as Gucci and Louis Vuitton. So not only digital art can be sold through NFT: in the digital world, there is also room for sneakers, bags and more.
The basic idea is to capture the interest of people desiring their avatars to “look cool” with their Gucci sneakers and LV accessories.

But what is the value of an NFT?

In a very informative paper appeared lately on the Harvard Business Review, Steve Kaczynski and Scott Duke Kominers explain “How NFTs create Value”:

• They are an unprecedented way to design the market for digital assets defining clearly property rights: before NFTs it was impossible to separate the “owner” of a digital asset from just anyone who save a copy of the same asset on their computer
• NFT – as blockchains – are programmable: as a consequence, NFTs can “do things”, so the creator can empower an NFT with added functionality, expanding its value and purpose over time, and provide utility to the owners, as the access to an exclusive club provided by the Bored Ape NFTs
• Since the blockchain is public, it is possible to send (additional) products directly to anyone who owns a specific token
• NFT’s programmability supports new business models, notably the new royalty contract in which the original creator keeps getting a share of the revenues every time a certain crypto-artwork is resold.

Thus, according to Kaczynski and Kominers, “owning an NFT effectively makes you an investor, a member of a club, a brand shareholder, and a participant in a loyalty program all at once”.

NFTs and the perfume world

In November 2021, the swiss-based tech start-up Authena, in collaboration with Artistic Fragrances (i.e. the portfolio of three artistic perfumery brand MASQUE MILANO, MILANO FRAGRANZE and MALBRUM) launched a collection of 40 NFTs called “Accords” by Masque Milano.
The NFT drop was the first-ever in which a piece of digital art is associated with a physical twin in the perfume world.

From opensea.io the drop description reads:

Masque Milano launches 40 NFTs that were created exclusively for the world’s first Artistic Perfumer Advent experience dedicated to the metaverse.
Celebrating the sensory experience of ‘waiting for’ with new layers of anticipation explored out of NFTs with the guidance of the brand's artistic directors and perfumers.
The collection is inspired by the theme of 'Accords' and the enhancement of the senses for the NFT owner, is unfolded when pairing the NFT to its physical twin, the advent calendar. NFTs are permanently linked to their physical twin, using Authena Shield technology.
The 24 days before Christmas become the world's first artistic perfumery experience in the metaverse, with the NFTs as exclusive keys to unlock contextual anecdotes and surprising facts on the fragrances and its creation process.

For the non-NFT expert, this all might sound pretty “mysterious”… Basically, by purchasing the NFT (most have been sold already!), a cryptotrader will become owner of one of the 40 Accords unique artworks. Plus, each owner will then be able to claim an Artistic Fragrances (physical) advent calendar. Every numbered box – to be opened in the corresponding day of December – will contain a fragrant surprise, such as a sample of a fragrance in the collection, and a certain number of vials containing raw materials or accords used in the creation of that fragrance. Finally, the owners of these NFT will have the exclusive access to a series of live events, taking place at 7pm CET every night, featuring the artistic directors of the brands speaking with perfumers about the creation of the fragrance of the day.

Do you want to become a member of the club, and a supporter of the Artistic Fragrances brand portfolio? Now you know how!

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