Mainstream NFT Market Struggles - Legal Action, Low Trading Prompt Major Brands like Nike to Step Back
In a surprising twist, major brands such as Nike, Starbucks, DraftKings, PUMA, and Reebok have reevaluated their involvement with NFTs, scaling back or completely abandoning their projects. This move raises questions about the long-term sustainability of NFTs in mainstream industries and the challenges of incorporating blockchain-based assets into business strategies.
2021 saw NFTs explode with soaring trading volumes and celebrity endorsements. In response, big brands jumped on the bandwagon, launching NFT collections to captivate tech-savvy consumers and explore new revenue streams. Nike acquired RTFKT to create virtual sneakers, Starbucks introduced the Odyssey NFT program, and DraftKings partnered with the NFL Players Association (NFLPA) for the Reignmakers game. Similarly, PUMA and Reebok joined the scene with Super PUMA and NST2 projects.
However, the volatile NFT market soon exposed its weaknesses. By 2024, NFT trading volumes had plummeted, and many projects failed to deliver lasting value. Fast forward to now, and total NFT trading volume is significantly lower compared to the 2021 peak.
One notable case is Nike, which shuttered RTFKT in December 2024, leading to a class-action lawsuit in April 2025 in Brooklyn, New York. The lawsuit alleges Nike sold "unregistered securities," causing over $5 million in damages and shedding light on the unclear status of NFTs as securities.
Similarly, Starbucks terminated its Odyssey NFT program in March 2024, two years after its launch, and DraftKings faced controversy when it shut down Reignmakers in July 2024, resulting in a $65 million lawsuit from the NFLPA. The association accused DraftKings of breaching its contract by refusing to honor payment commitments.
Meanwhile, PUMA and Reebok's NFT projects have gone quiet. PUMA's Super PUMA NFT project, launched in 2023 to celebrate its 75th anniversary, generated initial buzz but has seen no further updates. Similarly, Reebok's NST2 collection, created with rapper A$AP NAST in 2021, sold out in minutes but has not seen new projects since.
This mass exodus does not signal the 'end of NFTs,' but rather a shift towards models that offer tangible utility and synergy with digital and physical worlds. Brands are expected to focus on "unlocking new types of ownership and access that feel native to the internet generation" to create sustainable growth.
Alexander Salnikov, co-founder of Rarible, emphasized real-world asset tokenization, stating, "The next wave of growth isn't about chasing a trend-it's about unlocking new types of ownership and access that feel native to the internet generation."
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- Despite the setbacks faced by major brands in NFT projects, Alexander Salnikov, co-founder of Rarible, believes in the future of NFTs, advocating for real-world asset tokenization.
- Nike's move to shutter RTFKT and the subsequent class-action lawsuit alleging sale of unregistered securities raises questions about the securities status of NFTs.
- The mass exodus of major brands from NFTs does not indicate the end of NFTs, but a shift towards models offering tangible utility and synergy with digital and physical worlds.
- Starbucks, one of the major brands that jumped on the NFT bandwagon, terminated its Odyssey NFT program in 2024, two years after its launch.
- DraftKings, following the footsteps of other brands, faced controversy when it shut down Reignmakers in 2024, leading to a $65 million lawsuit from the NFL Players Association.
- Trading volumes of NFTs have plummeted since their peak in 2021, exposing the weaknesses of the volatile NFT market.
- Big brands such as Nike and Starbucks, which launched NFT collections to captivate tech-savvy consumers, are now scaling back or abandoning their projects due to the challenges in incorporating blockchain-based assets into business strategies.
- PUMA's Super PUMA NFT project and Reebok's NST2 collection, launched to celebrate anniversaries and collaborate with celebrities, have seen no further updates since their initial launches.
- The finance and technology sectors await the emergence of sustainable business models for NFTs, with brands expected to focus on unlocking new types of ownership and access that resonate with the internet generation to create long-term value.
