Despite crypto taking a nosedive in 2022, there has been one trend that should be encouraging for investors; more and more companies are looking for ways to leverage the potential that blockchains offer. And just last week another well-known company took the dive into the world of Web3, or the emerging decentralized internet that stands in contrast to Web2 and its dependence on a few big tech companies.
In a press release, sportswear behemoth Nike (NKE -1.42%) said it will unveil its new Web3 platform .Swoosh in 2023.
Apparel goes digital
The launch of .Swoosh will serve as a hub for all of Nike's virtual apparel and digital assets. Users will be able to purchase Nike brand clothing and shoes for avatars that can be used in Web3 games. Furthermore, limited edition non-fungible tokens (NFTs) will be released on the platform for purchase. To top it all off, users will be able to unlock real-world perks like actual clothing and possibly even meet and greet professional athletes.
For those keeping tabs on Nike's development of its digital endeavors, the introduction of .Swoosh might be a little confusing when considering that it purchased RTFKT (another Web3 company serving a somewhat similar role) back in December 2021. Based on information on the .Swoosh website, it seems that RTFKT and .Swoosh will be separate platforms, and a comment from a RTFKT representative clarified that its team will only be supporting Nike in its pursuit of expanding into Web3.
As one of the top innovators in fashion and sport, it seemed nearly inevitable that Nike would tap into the potential that Web3 offers. Nike's push to offer digital assets and apparel signals that the company is keenly aware of the direction consumers are heading. Even though it might seem ludicrous to purchase clothes for your avatar, people are spending more time than ever on the internet, and as that trend continues to grow, Nike knows there is a profit to be made.
The blockchain that makes it all possible
To facilitate the transactions on .Swoosh, Nike needs to use a blockchain. And the blockchain it selected is Polygon (MATIC 0.05%). This blockchain is quickly becoming one of the most popular blockchains for companies looking to leverage Web3 technology. Notable companies like Coca-Cola, Meta, JPMorgan, and Disney all have utilized Polygon in some way or another in 2022.
Polygon offers extremely low fees and lightning-fast speeds. Known as a Layer-2 sidechain, Polygon is attractive to users not only for those cheap fees and impressive speed, but it is also compatible with Ethereum (ETH -0.77%). Ethereum has become the standard for Web3 enterprise due to its flexible, programmable blockchain that allows developers to create all kinds of applications. It's also one of the most decentralized blockchains in the world.
However, Ethereum can be slow and costly when traffic on the network is high. This is where Polygon comes in. With Polygon, users get the best of both worlds -- Ethereum compatibility and low fees with fast speeds.
In addition, Nike added that Polygon's "sustainability-minded approach" made it a no-brainer to partner with as the blockchain pledged to become carbon neutral in 2022.
When considering all of the above, investors have several different options. First, investing in Nike, perhaps the pre-eminent name in athletic apparel. Although supply chain issues continue to prove an obstacle, the company's long-term potential is difficult to pass up. Accounting for more than 12% of the entire $380 billion sportswear industry, Nike has a leg up on its competition and benefits from being one of the most recognized brands in the world.
For those interested in taking a slightly different route, one with the potential for greater returns but bigger risks, there's investing in the blockchains that are supporting the companies diving into Web3. As blockchains support more use cases, their prices should appreciate. Out of a crowded field, there are few blockchains supporting the number and type of use cases like Ethereum and Polygon.
