Unisocks introduced this concept with physical items; people could burn a token in exchange for a physical pair of socks. Sock prices reached more than $92,000, and have become a “crypto geek status symbol,” Bearsnake says. Adidas is also using a version of a burn in its Adidas Originals drop; when NFT holders buy a pair of physical shoes, their NFT changes colour. This is done by burning the “phase 1” token and replacing it with another token, along with physical merchandise. This process can continue the next time they “claim” a product, by swapping phase 2 with phase 3, and ultimately concluding with phase 4, according to an Adidas spokesperson.
In July, artist Damien Hirst also invited buyers to choose between digital and physical. He sold 10,000 unique digital spot paintings as NFTs for $2,000 each. Owners have one year to decide if they want to trade it in for the corresponding physical version. At the end of the year, the remaining items — both physical and digital — will be destroyed, leaving people with either a digital artwork NFT or a small painting.
The art world has specifically embraced the concept of burning. Digital artist Pak launched an “NFT-burning platform” in which people can burn their NFTs connected to digital art. In exchange, they receive some of the platform’s digital currency, called Ash (depending on the item’s price and the number of that item available). In the future, Pak will only accept Ash for payment, and other artists can also choose to accept Ash. “It’s making a funny point: which is more valuable? The actual piece of art — the NFT you originally have — or the tokens, which is a point people have been making for years,” says Serotonin’s Cassatt, whose client Sotheby’s partnered with Pak on the project. “Imagine Buddhist monks creating one of these gorgeous mandalas and then blowing it all the wind — what an interesting artistic experiment.”
Trul says that burning could be an interesting option for trademark infringement cases. In the case of Hermés, for example, which filed a lawsuit against an artist for selling NFTs that allegedly looked like the brand’s bags, the brand could have invited owners of the MetaBirkins to burn their NFTs in exchange for NFTs issued by the brand. “A new tokenomics structure is coming out every day, and it’s limited only by your creativity,” Bearsnake says.
This allows perks and tools that weren’t previously available, Zhang says. “It’s very important to understand that if you only have a physical product, you can never use it in the digital world. But, if you have digital twins and a token, you can use the digital object across all kinds of surfaces. Maybe you have a digital NFT representing Nike shoes, then the next day Adidas says, ‘If you have this, I will give you my shoes’. This couldn’t previously be achieved, but now you can because you have a digital object.”
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