Is This the Holy Grail of Web3 Fashion the World Has Been Waiting For?

We know that CryptoPunks are the grails of PFPs, Chromie Squiggles are the grails of generative art, but what is the grail collection of Fashion NFTs?

Well, it might just be Unisocks…

In this post you’ll learn:

What Unisocks are
Why Unisocks are such a significant collection
What the data tells us about Unisocks
How we see the Unisocks legacy today

What Are Unisocks?

To understand why one pair is currently priced around $46,500, you have to understand the history of Unisocks.

On May 9th, 2019, the Uniswap team announced Unisocks. There would only ever be 500 limited edition socks whose price the market would ultimately decide. The socks were designed by Uniswap Leander Capuozzo and Dean Eigenmann (designer and security researcher respectively). The project was not only launched by arguably the most innovative dApp (decentralized application) in crypto to date but was also the first experiment linking physical fashion to cryptocurrency tokens.

The Unisocks Mechanism

Each sock was represented by an ERC-20 (fungible) token SOCKS. Its increase or decrease in price is based on a bonding curve (the relationship between the price and supply of two ERC-20 tokens) within an automatic market maker i.e. an automatic pricing engine. This pricing engine was Uniswap’s great innovation.

Instead of relying on a centralized exchange like Coinbase or Binance, Uniswap made it possible for anyone to exchange tokens with one another without relying on intermediaries. As people buy the SOCKS token its price increases and as people sell it back into the pool, the price decreases.

In addition to all this, Unisocks also have two more technically interesting properties:

They marked the first primary market asset issuance by an automated market maker
Technically, they are among the first fractionalized NFTs as people could (still l can) purchase fractional shares of ERC-20 tokens

The First Phygital

To redeem the physical socks, you have to burn the SOCKS token. By doing so you receive the physical socks and an NFT to commemorate the redemption.

Currently, of the 500 total supply, 199 have redeemed their socks, 282 are holding and only 19 SOCKS tokens are in the Uniswap Liquidity Pool. As seen above you can purchase one for around $46,500.

Behind the Success – The Birth of Web3 Collector Culture

So why are these relatively basic-looking socks going for over $45,000 (at one point they even traded for ~$170,000)? There are two overarching reasons.

1) The Ultimate Flex via OG Provenance

Unisocks was the first redeemable fashion garment on the blockchain. Just like CryptoPunks represent the rarefied space of early NFT collectors, Unisocks represent an even earlier space of DeFi enthusiasts.

Because Uniswap was essentially the first protocol to successfully create a decentralized exchange, in some ways, buying Unisocks is like buying Christie’s, Sotheby’s or Art Blocks’ first piece. Depending on where Uniswap ends up in the long run, such a provenance (i.e. origin) may give a lot of credibility to its holders.

The one blemish on Unisocks’ provenance is that the Uniswap team changed the sock design in July 2019 without a formal announcement. At the time some were even calling for Unisocks classic fork (a reference to the Ethereum Classic fork in 2016). However, in the grand scheme of things, even with the changed design, these are still THE Unisocks.

2) If You Know You Know

Just like Mark Rothko’s paintings, Unisocks seem plain and simplistic, however, upon closer inspection, there’s a much deeper story at play. In fact, this simplicity, even gaudiness of the design, is what distills the Web3 collectibles culture. Their relatively unassuming nature is what makes their luxury status even more impressive. They’re an if you know you know (IYKYK) object not meant to be understood by the masses. On the other hand, they invite the curious to go down the rabbit hole and discover why these assets are so expensive. The IYKYK attitude isn’t unique to Web3 but is prevalent in most luxury markets like watch, art and car markets.

However, what makes IYKYK assets, arguably, work even better in Web3 than more traditional markets, are its social graph creation capabilities.

Since you can see which wallets hold what assets, you can instantly create a community and events around them. (Bullish on secret societies). Holding revered and usually, early artifacts of Web3, is a form of accreditation of one’s NFT OG status. A sort of on-chain CV if you will.

https://twitter.com/gmoneyNFT/status/1636346761491955714?s=20&embedable=true

3) New Economy + Self-Irony

The IYKYK attitude combined with a sense of self-irony of Web3 collectibles challenges the notion of what luxury is or should be. In part, this explains why NFT collections like EtherRocks (pictures of rocks) once traded for over $1M and CryptoDickbutts (pretty self-explanatory) have a floor market cap of $13M+. I’d even attribute part of BAYC’s success to this self-irony.

Ultimately, it’s up to a decentralized community (not a bank or a government) to decide what these assets should be worth. Especially as we increasingly shift toward an attention economy. Similarly, just because Bitcoin isn’t made of gold, doesn’t mean it isn’t valuable. As Naval Ravikant playfully states: ”Every generation invents its own new Ponzi scheme and rejects the previous generation's Ponzi scheme.”

At their core, these assets are often meant to be anti-status quo with a pinch of white-collar punk. New movements and art forms often reject the authority of previous generations whether it’s Basquiat’s “naive” work rejecting the elitist art world, Mies Van Der Rohe’s form follows functions ethos rejecting ornamental design, Apple’s 1984 ad rejecting IBM or even youth rejecting the traditional notion of a t-shirt and turning it into a rebellious statement.

What the Data Says About Unisocks

SOCKS Token

At a $14.8M circulating supply market cap ($23.9M if we count the redeemed socks as well), Unisocks would have the third-highest market cap among Fashion NFTs. It would have the highest if we include only non-PFP projects.

The initial price of the SOCKS token was priced around $12, this means a single pair of Unisocks has appreciated around 4000x!

For comparison, Chromie Squiggle’s ROI since mint is 1222x, while BAYC’s is 605x (using average prices).

The Unisocks holder data shows us a few interesting things. First, the physical sock redemptions plateaued after May 2021, however, Unisocks holders have almost tripled since then. Second, there are two whale wallets that hold over ten socks (the largest holder is a Uniswap wallet).

Unisocks Redeemed NFT Token

Even the Unisocks NFT that holders get when they redeem their physical socks has been traded for as high as ~$30,000. While the volume is clearly not as high as for the redeemable ERC-20 SOCKS token, it goes to show the power of the Unisocks provenance discussed earlier.

What’s Next for Unisocks

You may have been wondering why Doodles decides to go with the golden socks collection. Likely a nod to Unisocks.

In addition, Unisocks has inspired multiple derivative collections like Mango Market Caps and SolSocks on Solana.

Moreover, the phygital infrastructure company 4K Protocol’s redemption mechanics has been heavily influenced by Unisocks. 4K utilizes a token-burning system very similar to that of Unisocks. Instead of burning an ERC-20 token, you have to burn an NFT to receive the vaulted physical item. Gmoney’s 9dcc uses 4K for its claims.

Finally, PleasrDAO recently announced it’ll be literally burning its pair of redeemed Unisocks during a live event on March 21st to honor the Unisocks legacy. Uniswap’s founder, Hayden Adams, will be there for the event. Also, Mike Demarais, founder of the Rainbow Wallet, will also attend (based on intel from the PleasrDAO team).

https://twitter.com/PleasrDAO/status/1636758148378918917?s=20&embedable=true

The DAO is one of the most famous NFT collector DAOs and is known for buying a one-of-one Wu-Tang Clan unreleased album Once “Upon a Time in Shaolin” for $4M as well as pplpleasr’s iconic Uniswap ad for $525,000.

Learn more about Web3 Fashion:

Thanks for Reading!

=========================

DM on Twitter DM email me at [email protected] if you want to work with me. I’m constantly looking to work with new projects.

Upgrade to the paid subscription to access The Naked Collector archives. Some of the alpha is too good to keep in the public domain.

Author Bio

I focus on the cross-section of NFTs, crypto and fashion:

Naked Collector has been the top Web3 Fashion research/data source since 2021
6 years of experience in the crypto markets (crypto/DeFi/NFTs)
Part of 100+ NFT communities

Also published here.