This is the first installment in FOUNDATIONS, a multi-part series exploring emerging principles in the digi-physical space.

IYK was born from the desire to create a better method of linking NFTs to physical items.

Back in June 2021 we were excited to see more traditional brands enter the NFT space, but we felt unsatisfied with the approaches taken. Broadly speaking, we saw two categories of approaches: the Sidecar Model and the Voucher Model.

The Sidecar Model

The Sidecar Model refers to an NFT that is completely detached from the physical item. An example of this would be Dolce & Gabbana’s collaboration with PJ Tucker, where purchasers of the sneaker could fill in an online form with a code from their receipt to get airdropped an NFT.

Once redeemed, the NFT lives on its own, and is freely transferable by the owner. They can sell the sneakers on eBay and keep the NFT, or sell the NFT on OpenSea and keep the sneakers. The NFT holds little meaning other than being a tradable "receipt" for purchase.

The Voucher Model

The Voucher Model refers to when the NFT represents a claim on a physical item. An example would be RTFKT’s “Forging” system, where each NFT allows you the one-time permission to redeem a corresponding physical. Before redemption, the NFT trades as both the physical and the token, but once redeemed, they are separated just like in the Sidecar Model.

Our Approach: The Pull Model

While there are valid use cases for both the Sidecar and Voucher models, we wanted to create a better model for possession of physical items. Whereas traditional NFTs grant the current owner the right to transfer, we shifted the right to transfer to the physical item itself. Whoever has proximity to the physical item is able to pull the corresponding NFT into their wallet.

This behavior works in perpetuity. If you sell the physical item or lose it, whoever has access to the item will be able to pull the NFT into their wallet. Currently, we do this via NFC chips, and a validated scan will produce the permission to claim the NFT on-chain.

Why model possession?

It’s our belief that having a digital proxy for physical possession is a powerful concept that will unlock a new generation of rewards programs. Brands who have leveraged our technology have already implemented a number of concepts such as discounts based on what you own, VIP entry to events, and access to digital wearables.

What if someone scans my item without my permission?

The short answer is you can always claim the NFT back by tapping the NFC chip. While this can be an inconvenience, it’s important to note that modeling possession depends on the physical item eventually having the ability to move the NFT around.

In the Sidecar Model, the seller of the physical could ship the item and refuse to transfer the NFT. There’s no way to force the seller to transfer, and thus we lose the property of the NFT serving as a proxy for possession.

Conclusion

We believe brands will reward owners of individual items through the linked NFT.

As real value is unlocked through the token, modeling true possession—not just temporary access—becomes more important.

Tomorrow, we will share the latest evolution of our claim model.

✱,
Chris & Ryan, Co-Founders

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