NFTs Join Retail – Los Angeles Business Journal

Non-fungible tokens are entering the trading arena, and that has both retailers and Web3 creators excited about the collaboration between the markets.
Most recently, downtown-based Toonstar, a Web3 animation studio, and retailer Hot Topic Inc. announced a partnership that will result in the sale of NFTs and other Web3 products in brick-and-mortar stores and online.

Web3 is the futuristic vision of the internet that includes blockchains and token-based vehicles such as NFTs.
NFTs work like other cryptocurrencies, except that each token has its own unique serial number, meaning it is associated with its own image, music or membership. Buying an NFT is similar to buying a piece of digital art; Once a person owns this “image” they can sell it or use it to get other benefits like exclusive content.

Under the terms of the partnership, Toonstar will produce NFTs and other digital content for Hot Topic. The deal was officially launched on July 21 at Comic-Con in San Diego, where a Hot Topic fan was chosen to make a voice appearance on Toonstar’s web series “The Gimmicks.”

Toonstar co-founders John Attanasio and Luisa Huang said their experience working with animation studios such as Warner Bros. and DreamWorks gives them an understanding of the importance of retail in building franchise properties and expanding their community-building platform.

Attanasio said the partnership, the financial terms of which the parties declined to discuss, came about because Hot Topic is “forward-thinking” about the Web3 world.
“They want to push the envelope and they want to innovate. They’re interested in pushing the boundaries of Web3 and NFT,” he said. “That’s how we got connected because we both have a vision for what we can do in Web3 together both from a retail, digital, brick-and-mortar standpoint and from a storytelling, character, world-building standpoint.”

Hot Topic CEO Steve Vranes said the company has a highly engaged community of pop culture fans, and with the partnership, they will get to participate in entertainment facilities in a new way.

“Hot Topic has been the destination for pop culture merchandise for decades now,” Vranes said. “We believe that this partnership with Toonstar will continue this legacy and together we will build some truly incredible programs.”
The companies will collaborate to create goods, but the products will be more than the typical swag.

“I think the first rollout is going to be … cool shirts and hats that play along with NFT. Expect to see more innovation on that front,” Huang said. “It’s going to be more than a shirt with a cool print on it. Everything must have Web3, native features.”
Vranes said fans can look forward to “innovative” ways to combine both digital and physical collectibles.

“We see this as an opportunity for us to offer a digital component to the products that our customers already like to collect,” continued Vranes. “Whether it’s a T-shirt, a backpack or a traditional collectible toy, this program will help us accelerate that connection.
According to Attanasio, retail is a critical piece in building the Toonstar franchise.
“Entertainment is going to be what will take Web3 and NFTs mainstream,” Attanasio said. “And part of that is retail.”

Just the beginning

In December 2021, Santa Monica-based dealer Fred Segal partnered with metaverse marketing agency Subnation to open an NFT gallery installation inside the Sunset Boulevard location. The interactive gallery displays digital NFTs and customers can purchase both physical and digital products.

The NFTs and digital assets change monthly and center around a cultural theme. This month’s theme: photography.
“We have over 75 unique NFTs from photographers who have captured everything from music to sports,” said Doug Scott, co-founder and chief creative officer of Subnation.

“Some of the items we have are limited edition Polaroid cameras made by artists like Keith Haring or a Supreme camera, as well as some antique cameras.”
Scott said bringing NFTs into retail spaces is important because it can teach potential buyers how to interact and live with the items.

“It’s an opportunity for us to educate consumers about ‘what are NFTs,’ showcase them in a physical environment and help them onboard this whole new Web3 environment,” Scott said.

As NFTs become more available in retail spaces and the consumer base grows, Scott said the NFT market is set to evolve into a world where physical goods have a “digital twin.”
“When I buy a bag, I get an NFT with whoever authenticates the bag [and] it verifies and authenticates me as the owner of the bag upon purchase, and I get a digital twin that my avatar … in the metaverse can actually carry,” Scott explained. “Where we see the market going is that physical goods will have a digital twin that will be represented as NFTs, and the market is going to expand around these types of assets.”

Scott said he can see more retailers in the fashion and electronics world incorporating NFTs into their business models.
Cryptocurrencies and NFTs have struggled in the market, but Scott said he believes events like the one at Fred Segal will provide opportunities for new buyers who were priced out of buying blue chip NFTs, which range in price from $10,000 to $75,000 and higher.

“I don’t think it’s a secret [the NFT market] experiencing a bit of growing pains… we’re going to come out the other end and I don’t know what it’s going to look like, but I do know that there are amazing things being built in the Web3 space right now. Attanasio said. “This is construction season.”

NFTs and society

Produced in association with Mila Kunis’ Sixth Wall, Toonstar’s “The Gimmicks” is a web series about three wrestlers who recruit a rookie in an attempt to revive their faltering careers and regain relevance in the wrestling world.
The 20 weekly episodes of the first season were written by Dave Ihlenfeld, David Wright and nearly 5,000 holders of series-related NFTs.

The gimmicks are a collection of randomly generated NFTs on the Solana blockchain. Each one represents a unique character who “lives in the universe of [the] animation series.” The NFT holders participate in the creative process of the show by voting on what they think should happen next.

“Each of the episodes is community-driven, meaning at the end of each episode there’s a cliffhanger and NFT holders can vote on what happens. It’s very much ‘choose your own adventure,'” Attanasio said. “The vote determines what happens in next week’s episode.”

The owners’ cooperation does not end there. Collectors also have advertising rights and can write their own story for their Gimmick character, which is then published on the Gimmicks Wiki page. They can also participate in ongoing voice and art competitions.
In addition, the NFT owners can interact with each other through a social layer called DIC (Decentralized Inclusive Community) punch.

“We’ve built one of the first on-chain social layers in Web3. The ‘DIC punch’ is similar to the Facebook ‘poke,'” Attanasio explained. “It also has an instant messaging component, so not only can you DIC punch someone, but you can actually send a message with it too. It makes NFT dynamic and becomes this expression of social belief, or your participation in society.”

Attanasio and Huang say they are proud of the company’s engagement numbers so far, which are close to one million DIC hits.
“In the world of recurring engagements and retention in a project, those are numbers that we haven’t seen anything like from other projects yet,” Attanasio said.