Jan 17
Taking Ls
Let’s face it. The sneaker game is rigged. Whether you actually want to wear the sneaker, you’re a collector or humble reseller, we’re all subject to “backdooring”, fakes, raffles, and of course, bots.
Despite all of this we wear the Ls like a badge of honor, knowing well before we enter a raffle that we’ve literally asked for a hand-delivered L.
At the end of the day only a select few people are getting sneakers. Once they hit, they do what’s most logical — they hop on IG and troll the rest of us. It seems that no one is immune to the appeal of cheating the system, from the children of former-Nike execs to one of the heirs to the Jordan throne, there’s no shame in the sneaker game.
It all starts with the relationship between hype, scarcity, and the almighty L.
For argument’s sake, the hype model has been perfected by Nike and their prolific approach to collabs and selective distribution. It’s been executed time and time again, with the outcome being the same.
It involves us squirming with a growing sense of FOMO, checking the release dates like our lives depend on it. We always miss the drop (This is L number #1), but GUESS WHAT? We can head right over to GOAT or StockX and pay some lucky mfer our hard earned savings to chase the hype (That’s your second L right there).
The formula is simple.
Hype * Scarcity = Likelihood of Ls
Too much attention (hype) aimed at a specific silhouette or colorway (scarcity) = the likelihood of you takin’ an L. There’s some more nuance to it, but that’s a good overview.
Sneakers also have some properties of Veblen goods. This allows brands to create even more artificial scarcity . The end result is playing on a tilted table with weighted dice in a market structurally built to generate hype by handing you L after L after L.
While tackle this problem head on, there’s a clear path forward. It starts with universal market access.
Universal market access is the antidote. It means that the market for sneakers is no longer bound by who you know or where you live. It’s exactly as it sounds; it you want the sneaker, then you can have it, synthetically at least.
Let’s quickly recap on synthetics, or synths. For anyone just joining us, synths are a derivative product which mirror the price of real-world assets on-chain. Think of them as a digital sibling to a physical item.
Synths allow anyone in the world to access marketplaces that were previously geographic-specific or overlooked by brands or services. This means that if you live nowhere near a dope sneaker store but love Yeezys, you can still mint a synthetic Yeezy collection that mirrors its real-world value.
Your gut reaction might be:
“How can the price go up if everyone has the sneaker?”
Remember a synthetic asset is a derivative.
This means its value is derived from the value of the real-world sneaker. This is important because when you a buy a derivative it doesn’t affect the underlying price of the sneaker.
It is now possible to own a synthetic sneaker which let’s you trade on the hype, without ever owning the physical sneaker. This is what we mean by universal market access.
It’s 2022 — say goodbye to the Ls.
Conclusion.
Universal market access is paramount in creating a more equitable world. Synthetic assets offer the ability to reach beyond the previous barriers which restricted us from investing in alternative asset classes such as sneakers and hyped collectibles. Welcome to Xsauce.
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