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Welcome to a Phygital World

Phygital is a portmanteau, a new word created from blending two words together, those words being physical and digital. The term itself first emerged as companies found themselves relying more on digital marketing, such as when retail first began adopting online marketplaces.

But what does it mean in this new world of Web3 we are living in, and how can we as creators leverage this increasingly popular trend?

Let’s find out together.

What is a phygital NFT?

In the context of blockchain, phygital is used to refer to a non-fungible token that goes beyond a digital experience and integrates physical components— most often a tangible item associated with said NFT.

Just like how art is ultimately a way for an artist to communicate with an observer, phygital NFTs allow an artist the opportunity to deepen and diversify how they approach relationships with their collectors.

3 different ways you can make use of phygital NFTs to further your creative practice

#1: Demonstrate proof of (IRL) ownership

One of the prominent benefits of NFTs is the ability to validate proof of ownership. Consequently, a straightforward application of "phygital" is a non-fungible token (NFT) that represents ownership of a physical item.

The choice of how an artist decides to intertwine digital and physical collectibles is entirely up to the individual. Nonetheless, there are two primary ways in which a creator can utilize phygital NFTs to enhance the ownership experience for their collectors.

A) Ownership of the accompanying physical item being a primary utility of a phygital NFT

Many artists elect to sell NFTs of their art to then provide the physical companion piece. Digital artist Silas Abrifor created PEACE CULTURE as part of his Every Which Way Collection and then went on to mail the original painting from his home in Lagos, Nigeria to his collector in California.

B) Physical items, such as prints and merchandise, are available as additional perks to ownership

Tyler Hobbs is a world-renowned visual artist, best known for his Fidenza Collection. This series comprises 999 artworks created using a complex flow field algorithm, skillfully capturing the chaos and entropy of the analog world. Initially priced at 0.17 ETH in June 2021, Fidenza has achieved an astounding trading volume of nearly 60,000 ETH at the time of publication.

Undoubtedly, blockchain ownership of a Fidenza holds significant gravitas for collectors. However, the inclusion of phygital utility further enhances the value of a Fidenza, elevating its desirability even more.

Hobbs allows for each of his 999 Fidenzas to be printed just once, where his prints surpass digital displays in terms of resolution, color accuracy, and presentation of subtle details. As this advantage can only be utilized once for each Fidenza, potential buyers are motivated to pay a higher price for artwork that has not been previously printed. By providing phygital utility, Hobbs has effectively added an additional layer of scarcity and value to his collection.

Brands are also following suit! Popular temporary tattoo brand, Inkbox, is launching a collection of NFTs, where each NFT will unlock a physical 1/1 temporary tattoo that can be redeemed on their online store.

#2: Create token-gated shopping experiences

NFTs can also be used to provide token-gated shopping experiences. RTFKT combines design and manufacturing expertise with NFTs and augmented reality to create unique experiences with phygital fashion, sneakers, and digital artifacts.

Now owned by Nike, RTFKT recently allowed collectors to purchase a “CryptoKicks” digital collectible to claim a physical, customizable pair of shoes. LeBron James was recently spotted wearing RTFKT sneakers earlier this month.

Separately, independent creators have also used NFTs to provide token-gated discounts for their collectors, thereby creating additional incentives for prospective collectors to acquire their artwork.

Meta Angels x Adobe Artist-in-Residence jprittee recently incorporated phygital utility into his collector relationships through the use of Collector Tokens. Through blockchain validation, Jack has provided free tokens for his collectors to claim that then unlock various discounts in his merchandise store.

Getting technical with incorporating phygital utility 

Prominent Web3 brands such as Yuga's Bored Ape Yacht Club and Cool Cats have pioneered the development of token-gated storefronts, granting token holders exclusive access to merchandise shopping experiences. Notably, Cool Cats partnered with Shopify in June 2022 to establish a token-gated merchandise shop for their collectors.

Now, these e-commerce tools have become more accessible to all creators. The Manifold Merch Bridge is a free application for Shopify storefronts, providing NFT utility to customers through simple and secure token-gating technology on the Ethereum and Polygon networks. So far, they have facilitated over $3M in token-gated sales.

#3: Collect upfront payment to fund your required startup costs

If you’re an independent creator in need of supplies such as canvas, clay, textiles, and paint, you have experienced firsthand how the initial investment to create art can be prohibitive for many creators, especially when the profits from a sale are not ensured.

Through phygital NFTs, artists can strategically fund their work before production. In fact, this has been widely used by slow fashion brands who previously used platforms like Kickstarter or took in pre-orders before production. Today, slow fashion is starting to make its way into the realm of Web3.

For example, luxury brand Mirrorwerx is making use of phygital NFTs to secure preliminary funding, while also fostering stronger relationships with collectors in ways that were previously unavailable in Web2.

Elsewhere, Loro Masnah, a Brooklyn-based street artist has captured the hearts of NFT enthusiasts and piqued the curiosity of many passersby through his Flex On A Wall collection. Widely known as "The Wall," Masnah's mural is situated in the vibrant heart of Williamsburg, Brooklyn. After securing the physical space in 2022, Masnah started selling dynamic and phygital brick NFTs. Different types of bricks represent varying sizes of wall space and are updated with the metadata once Masnah paints an NFT of the holder’s choice.

Closing Thoughts

With interpretations and applications being as diverse and unique as artists themselves, phygital NFTs offer another opportunity to get creative with collector relationships. The fusion of physical and digital elements in phygital NFTs allows creators to:

• Enhance the ownership experience for a collector

• Create token-gated shopping activations to reward collectors

• Acquire secure and sustainable funding for your creative practice

Phygital NFTs have revolutionized the collector's experience by offering multi-dimensional and multi-sensory encounters, while bridging the gap between the virtual and physical worlds, providing innovative ways for creators to engage with their audience, monetize their work, and offer unique experiences. As the Web3 landscape continues to evolve, we look forward to how creators will utilize phygital NFTs to reshape the concept of collectibles and pave the way for the future of blockchain-based creations.

Want to hear firsthand how creators are using phygital NFTS? 
Join us on spaces this Thursday with Mirrorwerx and Superlotls to learn more.

In the News

Industry News

• As an extension to their commitment to self-custody, Ledger announces Ledger Recover, an optional subscription for users who want a backup of their secret recovery phrase.

• Barbie teamed up with groupHUG alumni Boss Beauties to launch a digital collectible collection aimed at bringing more girls and women into Web3. Read about their sold-out drop here.

• Fractional art platform Tessera and editions marketplace Escher announced last week that they will be ceasing and winding down operations over the coming months.

• The Web3 community will be gathering in Indianapolis later this week for VeeCon 2023. Check out the various activations and panels that will be occurring here.

Tools and Resources

• HeyMint Launchpad is a comprehensive smart contract tool that allows for public sales and pre-sales, gas-optimized minting, burning, soul-bound tokens, and more. Read more about their recent announcement here.

• Manifold Claim Pages now support $PEPE, alongside several other ERC-20 tokens on top of Ethereum.

Notable Creators

• Our co-founder Debbie Soon was featured in this list of 10 trailblazing Asian founders to watch, as part of Asian American and Pacific Islander (AAPI) Heritage Month.

• Vertical Crypto is auctioning off 10 unminted Chromie Squiggles, a historical generative art collection, in support of the ALS Association next week.

• Streetwear designer Bobby Hundreds is releasing a new book, titled “NFTs Are A Scam / NFTs Are The Future” this week that discusses the promises and perils of NFTs. Read this interview with Bobby here.

• Read about how industry change-maker gmoney is looking to disrupt the luxury fashion industry with his brand, 9dcc, through what he’s terming “networked products”.

• Snapchat influencer Caryn Marjorie made use of AI to create an avatar that offers virtual companionship for a dollar per minute. Learn how she is leveraging AI to create an additional revenue stream for herself.

• Quilters from Alabama are taking their traditional handcraft to the blockchain by collaborating with a young generative artist on a collection of NFTs.

Artist Grants and Opportunities

• Want to have your work showcased in Ghent, Belgium? HUG is providing all our artists with an opportunity to get displayed! Check out this tweet below for details on how to enter.

• The Heritage Journal is seeking written and visual submissions from Black, Indigenous, and POC artists and contributors, including recipes, personal essays, photo series, etc. that capture the importance of lineage in one’s life. Learn more and submit here by June 21.

• The Adobe Creative Residency program supports creators of visual digital work, offering grants of $500–$5,000 for either a portfolio project or a paid Adobe project commission. Applications are accepted on a rolling basis, learn about the program and application process here.

• Get featured in the Daily Ralpha, a Web3 newsletter with a daily circulation of 75K. All you have to do is apply for your own HUG artist profile, and submit your interest here.

• Post your best work to Creatively every week, let the community vote, and stand a chance to win a $5,000 cash grant each month.

This Week’s Art Drops

• May the 4th Be With You by Thomassupernova (Limited Edition, 100/100, 0.054 ETH): In honor of Star Wars Day, Thomassupernova presents a drawing featuring an iconic scene of Master Yoda riding in an AT-AT walker, and sharing the timeless messages of hope, courage, and perseverance.

• Machiya by Luigi Stranieri (1/1, 0.1 ETH Reserve): Machiya is a minimalist and surreal project dedicated to Japanese pop and sub-cultural aesthetics, where pastel and vivid colors meet typical Japanese nostalgia. Each Machiya tells its own story, and each character is a figment of Luigi’s imagination or almost.

• Islas by Loïs Voirol (Limited Edition, 75/75, 25 tez): A minimalistic piece depicting islands by surrealist artist Loïs Voirol.

• Madre by Isa Rus (Limited Edition, 100/100, 6 tez): This artwork shows the power of human touch as the profound bond between a mother and her newborn are beautifully showcased. The close-up view focuses on their intertwined bodies, blurring the boundaries between them and capturing the essence of their symbiotic connection.

• heart’s content by Courtney (The Curly Goddess) (1/1, 0.11 ETH): An abstract and colorful piece about choosing the fate you love, and living your life to your heart’s content.

• BROKEN DREAMS by Yakob El Moussa (1/1, 2 ETH): An animated glitch piece by photographer Yakob El Moussa, about how her dreams are fragmented and lost and pieced together by memories.

• ALIVE by Monica Jalali (Limited Edition, 73/73, 0.073 ETH): This photograph is a composite of two images blended together, with the foreground captured from a one-week hike and exploration of the coastal mountains of British Columbia, and the sky captured on a night of aurora chasing, in Alberta.

• MONOSCAPE 01 by Kenton High (Limited Edition, 10/10, 0.09 tez): A genesis minimalistic piece by Kenton High that celebrates the power of simplicity.

Creator Spotlight: Mirrorwerx

Mirrorwerx is a luxury fashion brand harnessing the power of blockchain technology to reinvent the way we design, produce, and sell clothes. Their mission is to disrupt a broken industry by demonstrating radically transparent and sustainable business practices while transforming the role of customers from passive consumer to informed and invested collaborative co-creators.

Mirrorwerx is enthusiastic about blockchain's ability to verify proof of ownership, allowing them to treat the people who purchase their phygital items not as consumers, but as members of their community with a stake and voice in shaping the brand.

We asked Mirrorwerx, what impact do you believe blockchain technology can have on the physical goods market?

Mirrorwerx genesis phygital release, Thirty 104, is made from 100% silk crepe de chine and features artist Daniel Calderon's generative artwork Marfa Yucca #258. An NFC chip-enhanced button sewn onto the pocket verifies authenticity, proof of ownership, and unlocks exclusive rewards for collectors.

If you’re wanting to claim and redeem Thirty104 for yourself then run, don’t walk— this limited drop is only available through May 31.