RTFKT is dropping a much-anticipated avatar for the metaverse during Nov 27-29: Clone-X. What is RTFKT, why are they special, and how can you get involved? Below!

What is RTFKT?

RTFKT (pronounced "artifact" 🤯 - once you know, you know) is a fashion, culture, and metaverse brand, launched in January 2020 by three friends.

In the words of the RTFKT Twitter bio:

Next Gen Sneakers and Collectibles for the metaverse. AKA NFT DRIP

What is DRIP, you ask?

You can read more about RTFKT in this interview with co-founder Benoit or Forbes piece on the upcoming avatar project, and check out this NFT Primer for Newbies if you need a refresher on NFTs.

Why am I excited about RTFKT?

Let's start with the basic stats:

• Twitter followers: 135,000
• Discord members: 79,500

(As comparison, two other notable names in the 2021 NFT bull year, Larva Labs, creator of Cryptopunks, has 109k followers on Twitter; Dapper Labs, the OG team behind Cryptokitties and the more recently-created NBA TopShot, has 102k.)

• What does RTFKT actually make?

So, what could be driving that fandom?

1. That drip: RTFKT makes its mark distinctly aesthetically. A fashion brand has to be fashionable. I know we just learned the word drip, but check out that drip! 🤤
2. Killer Collabs: One thing I find special about RTFKT is its breadth and quality of collabs. RTFKT collaborates with artists and iconic brands to create digital fashion, pushing forward creative boundaries and technological possibilities. For holders and fans, RTFKT creates blockchain-based collectible art x fashion x virtual goods x physical goods x identity x the thrill of being part of something new, blingy, and cutting-edge.
3. Community: What stands out about the RTFKT community is its loyal, deeply invested and knowledgeable, and professionally-run ethos. While there are plenty of 'gm's (and I find RTFKT's own twitter voice actually a bit too noisy), for each meme-y exchange, there are many more genuine conversations about how RTFKT collections relate to or differ from each other (Staple? Fewo? Space Drip or sneaker? Physical forge?), which item to buy, and how much value the company has created for "hodlers" over time. If you spend any time in the discord, you will likely also encounter RTFKTLukson, a former community member-turned moderator-turned staff member who pseudonymously created guides such as this one which explains the Clone-X drop and qualifying pre-sales in great detail (upon which I also based my RTFKT universe illustration above) - his or her contributions lend an air of professionalism and arbitration in the discord.
4. Blue chip team: The RTFKT team is experienced and authentic to their vision, with a background spanning luxury fashion, gaming, esports, trading collectibles, music and media. Add to this their backing by a16z, the crypto & pop culture-versed gold-plated venture firm. (As an aside: will a16z be the Sequoia of crypto-web3? Is it already?) To provide a few comparisons, the MekaVerse collection I previously profiled was launched by two unknown artists with zero venture backing; BAYC which is now known as a blue chip NFT collection also was launched by unknown anonymous artists - so perhaps you never know, but an experienced team with an actually knowledgeable VC partner behind them certainly doesn't hurt.

What's the Drop?

Clone-X is a drop of 20,000 3D avatars for the metaverse.

Say what??

If you haven't heard of the metaverse, think a mash-up between your actual world - waking up in your bed, making a cup of coffee or walking around the block for your fix, sitting at your desk or (if you're one of those rare few) going to your office and opening your computer, going to a friend's house or meeting up at a restaurant for dinner - and digital world - navigating that awkward half-second on Zoom when your appointment arrives in the meeting room with video off, feeding your Neopet back in the day, checking your Slack messages with 100 useless pings and a few nuggets. The metaverse is an imagined future universe where the digital world looks a lot more like our physical world - with houses and apartments, office buildings, restaurants, shopping malls, virtual dogs and cats and ponies - and we're walking around in it.

How? Represented by 3D avatars, perhaps.

Enter Clone-X. The teasers have indicated a wide range of avatar looks - I am particularly excited to see many female-looking avatars, as well as more diverse traits besides simply, "alien". Also, the animation and mobility for the avatars looks dope. (Check out the video below!).

Before I get into my own RTFKT trading journey, here are the deets on the Clone-X drop.

Clone-X Mint process

(Mint = original creation of an NFT, typically the first opportunity to buy it. In contrast, buying on "secondary" refers to buying an NFT after it has been minted, when it is being resold by its owner on an NFT marketplace like Opensea, one of the most popular NFT marketplaces today.)

• Private pre-sale starting Nov 27 (time tbd), available for 48 hours. Any and all existing holders of an RTFKT NFT have the opportunity to participate in this pre-sale and purchase up to 3 Clone-X avatars for 0.05Ξ each. And only existing RTFKT holders get to participate - there is no other way to access the pre-sale.
• Public sale Nov 29, Dutch Auction with starting price between 1-3Ξ (final price tbd)
• During the sale, you will buy a Clone-X non-revealed token (similar to MetaVerse experience, reveal will be possible via a website a few days later) Interestingly reveal is up to the owner, so there may be some slight considerations of whether you’d want to reveal or not, but my understanding is most people will simply reveal as soon as they can to see which avatar they got!

Now you know what RTFKT is, and how you can participate in the Clone-X drop. Why might you want to participate, and why and what did I buy in so far? Read on if you want the details!

Warning, I did go into copious detail on my decision information, rationale, exactly what my ROI estimations are, and my trading plans for the upcoming Clone-X drop and aftermarket.

You can also wait for Trading in Public - RTFKT part 2, where I'll recap what happens in this drop.

Skin in the Game - my RTFKT journey

Initial Tip

I first learned about RTFKT in early September, thanks to a tip from an advisor to our trading collective (a small group of individuals deploying one principal's capital into NFTs). We heard there would be an upcoming avatar drop (Clone-X) from a well-respected brand (RTFKT - it took me a while for the spelling to come naturally!) and by buying into an existing collection item, we could gain access to a pre-sale.

It was not at all clear how it all worked or what to buy, so I joined the Discord to figure it out. With some sleuthing in the channels and pinned messages, I was able to locate this comprehensive guide to the drop and pre-sale, written by the aforementioned RTFKTLukson, which led us to this collection of Opensea items - with prices ranging from 9Ξ for an "RTFKT Bonus Item Fewo World Trophy" to 12Ξ for a digital shoe to 15Ξ for "RTFKT x Jeff Staple Meta-Pigeon" ($29-50,000 at USD:Ξ prices at the time).

It was a Friday afternoon in September, our first week as novice NFT traders, and we didn't want to miss out. As we somewhat cluelessly eyed the bonus items, sneakers, and occasional pigeon on Opensea, we noticed our tipper had an RTFKT x Jeff Staple Meta-pigeon, and saw another one listed for 14.14Ξ. Pigeon or shoe? What did these pigeons do? Should we get it?

"Let's just copy [name]."

One click later - the pigeon was ours. Pre-sale here we come.

Diving Deeper

I was fascinated by this pigeons and shoes situation, and as someone who hadn't participated extensively in sneaker culture IRL, let alone digitally, I decided to dig around some more.

RTFKT was hinting on Twitter about an upcoming "reveal" video of the avatar project name and media - back then, it was still code-named "Akira" with a few leaks of avatar headshots only.

Something about the brand appealed to me and I wanted to get one of my own too (note: the investing collective is a joint effort, investing capital belonging primarily to one principal with market intelligence, analysis and judgment contributed by all members).

Late nights spent on Opensea followed. Did I want a shoe or a pigeon? A FeWo or Jeff Staple? FeWo shoes were trading at a slightly more affordable price (a hefty 10-11Ξ, or $33-36k, versus 12Ξ, or $40k for a Jeff Staple sneaker or pigeon). After researching both artists - FeWo, a young prodigious street artist, and Jeff Staple, an experienced sneaker and fashion icon with Nike collaborations under his belt, I decided to go with Jeff Staple. The aesthetic appealed and I was excited to support an Asian American like me.

Once I knew I wanted an RTFKT x Staple item, I researched the options - to date, there are two types of RTFKT x Staple sneakers and two types of "MetaPigeons" - pretty nice and simple. I won't go into the details of my trade shenanigans here - it involved assessing prices and obsessively checking sales for about 7 days, posting in discord asking for sellers, politely pestering one seller for a good price via their twitter DMs (they graciously responded while at Mainnet, shoutout to you!!), and ultimately getting into an agreement for a purchase from a nice seller who patiently answered many of my questions and provided opinions on various items, culminating in a private trade using NFTrader.io (worked smoothly! though I've encountered errors trying to set up my own private sales on NFTrader since then, and I'm also not sure if NFTrader bypasses the artist's secondary royalty, which may be a downside. Bypassing Opensea's 10% listing fee for a private sale I am not so much worried about right now).

Decision Recap

Decision: 15Ξ, RTFKT x Jeff Staple Meta-Pigeon

Some known information:

• RTFKT items as a whole have been appreciating healthily.

• Owning an RTFKT NFT grants access to 3 RTFKT pre-sale avatars at ~0.05Ξ each (for a total additional cost basis of 0.15Ξ).
• Sneakers have some utility as classic RTFKT and Jeff Staple items (collectibles) as well as entitling the NFT holder to "forge" (aka, redeem for!) physical sneakers. Most sneakers were already "forged" once in a limited time event earlier, but there might be an opportunity (~50% likelihood taking place next year) to forge again in the future. High price to pay if you're after the physical sneakers :D
• The pigeon has no clear utility other than a cryptic message from creator Jeff Staple once posted to Twitter, about "hodling" pigeons.
• There were about 292 K-Minus sneakers, 100 Meta-pigeon Sneakers, 100 OG Meta-pigeons, and 100 metallic pigeons, as well as about 25 friends & family pigeons. These were all released as editions, meaning that the rarity is simply the total number of the edition and each item is identical within the edition.
• Similar qualities for FeWo shoes.

Predicted information:

• Potential future value of ~3-5Ξ each = ~net 12-15Ξ gain, thus paying for the Meta-Pigeon (on top of some value the Meta-Pigeon would presumably retain, though not as high as the 15Ξ with pre-sale access baked in).
• Note: at the time of my purchase decision, there was also a teased "Avatar name & video preview" coming up. I was EXTREMELY convinced the preview was coming imminently and had a 50-75% chance of sending pre-sale access items up in price (more accurately, I was terrified it would, not so much rationally putting a % change on it), so I felt time pressure to buy. Turns out, the name & video preview didn't come until a few days later, and moreoever, a) I found the Clone-X name and video initially not compelling (oops. I do like the later video previews much better, and the name is growing on me), and b) the market didn't react too much either. Perhaps the pre-sale price was already baked in.

Main decision rationale:

• I felt the most salient pieces of information (in terms of impact on outcome) were the potential future value of the original access item and the future pre-sale avatars.
• It wasn't clear if various items within the collection would appreciate better or worse (either FeWo vs. Jeff Staple, or sneakers vs. pigeons), but I made my decision at that level based on 30% believing the pigeons might end up scarcer than sneakers, as a signal of being "OG"/a "believer", and given RTFKT x Jeff Staple were sneaker brands after all (partially my own opinion, partially biased by the seller who told me the metallic pigeon would be the last item they held onto - potentially a bit of influence, whoops, though they seemed to provide me honest information and opinions which I evaluated based on my own assessments), and 70% based on the aesthetic - I now start to understand the psychology of parents (whether of babies or of dogs) - this metallic pigeon just started looking darned cute to em! As I tried to make a final decision on a 13.75Ξ sneaker or 15Ξ pigeon, my partner came into the room. "So it's $49,500 or $54,000?" he asked. "Well which one does your gut like better?" Clearly, he rightfully thought I was crazy and the specifics didn't matter so much.
• Rationally, purchasing the lowest priced pre-sale-eligible item at around 11Ξ (a FeWo sneaker or bonus item) might have been a higher ROI, but heck, I was feeling bullish about this pigeon.

Potential outcomes:

• Base case (70%): Gain access to 3 RTFKT pre-sale avatars at ~0.05Ξ each = cost basis of 0.15Ξ. Potential future value of ~3-5Ξ each = 12-15Ξ gain, thus paying for the Meta-Pigeon (on top of some value the Meta-Pigeon would presumably retain, not as high as the 15Ξ with pre-sale access baked in, but perhaps 5-10Ξ range). Therefore, in the base case, I'd be at net ~0-5Ξ immediately, with hopes for appreciation in the medium term (e.g., 1 year) to 10-20Ξ per avatar/OG pigeon due to increasing popularity of the MetaVerse and need for avatars, for a gain of ~3x+.
• Upside (9.5%): Get a moderately rare avatar and sell immediately for 15-25Ξ, handily paying off the principal investment (if I wanted to / took action quickly enough), in addition to holding the remaining avatars + Pigeon for ~10-15E short-term, and additional appreciation in the medium term.
• Upside (0.5%): Get a SUPER rare and desirable avatar which sells for 100Ξ (swoon), pay off all my taxes and self-fund my business ;)
• Downside (20%): It's almost never been the case that quality NFTs drop in price below the mint (and I'm putting a HUGE range on that term, "quality", given even the MekaVerse collection, which I profiled in a previous trade, was considered a horrendous performance but prices were still around 3-4x the mint, and I consider RTFKT a significantly higher quality NFT). Thus, the downside to me felt pretty capped. Perhaps avatars would trade around 3Ξ and Metapigeon fall to 3-5Ξ as well, turning my 15Ξ into 10-12Ξ (not the worst outcome, even at this bottom range).
• Note: I've simplistically quoted the above return calculations in Ξ, in reality there's some volatility with Ξ which is currently in my favor (my cost basis in Ξ was lower in dollar terms compared to the future value prices I'm quoting in Ξ).

There you have it! My RTFKT buy-in decision. If you really want to make a big investment yourself, there is still time. The items are pricier - around 30% higher since I bought in, but everything else stated above is similar.

The Clone-X Drop & My Prospective Trading Strategy

I wrote recently about the MekaVerse drop. I didn't focus on comparisons in this post but may do one in the future as I observed both closely. Coincidentally, both were recently announced by Coinbase NFT as partners for the NFT launch.

What I learned during the MekaVerse drop:

• Crypto twitter has loud voices watching "trait sniping" and did not like the MekaVerse lottery. personally I felt more forgiving - whether naive or sympathetic due to my aversion to cognitive dissonance as a Meka holder.
• Greatest activity happens right after a mint. But there are also macro influences, such as where we are in the NFT hype cycle. Drop-level performance depends on the quality of the team and quality and novelty of the project (e.g., if you follow high-performers like Bored Ape Yacht Club, Art Blocks Fidenzas, Ringers, and RTFKT itself).
• Macro aside, I've observed secondary markets taking on three phases:
  • Greatest activity happens right after a mint, reaching a ceiling during the pre-trait reveal phase, with prices reflecting the chance of an ultra-rare.
  • Right after the trait reveal, there's another almost equally large amount of attention and swooping as well. One strategy could be to list high if you have anything moderately to extremely rare, as well as listing medium if you have something normal or floor-level to take advantage of the immediate interest.
  • Lastly, most projects seem to have a few days of activity before price dropping. The length of the time from drop to initial peak depends on the popularity of the project as a more popular project will have more interested buyers and price discovery may go on for a longer period as buyers wait, watch, and participate.

What I'm currently thinking

• RTFKT is well-loved by community from smaller holders to potentially more knowledgeable metaverse-adjacent whales
• Metaverse is on an upward trend and not as saturated, nor as easy to create as PFPs which may have drove NFT summer mania
• The team is well backed by serious crypto investors like a16z
• 10k pre-sale, 10k public sale means that 10k existing holders will likely hold some while selling off a couple.
• Diversified holder base with proven track record of hodling
• Promised and teased utility of avatars
• High quality artists

Conclusion: With many signs pointing to future success, I would lean towards long-term hold with potential to sell to offset cost or capture short-term profit opportunity. If I want to do any flipping in the short or medium term, it may make sense to sell 1 either right after the public sale, before reveal (highest short-term expected value, since the uncertainty of a rare is baked in), or right after the reveal (peak of near-term attention on the project).

What do you think of my purchase decision? Does this make you more or less likely to jump into the fray with RTFKT or any other NFTs? Let me know if you decide to participate in the drop - here's to scoring an avatar we love. 🙂

Part 2 to follow.