Emma-Jane MacKinnon-Lee is dialing into my Zoom session with her from her phone. Like, an actual phone number, not the Zoom app. It transpires that this anachronistic communication mode is necessary because she is on a 4,800-mile train ride from San Francisco to Miami.
MacKinnon-Lee is trying to get to Miami for Art Basel where she’s speaking at a battery of events and representing Digital Ax, the Web3 fashion project she leads. All the plane tickets were sold out so, undaunted, she hopped on a train.
There are a bewildering array of pieces to the Digital Ax project, from fractional garment ownership to a DAO (decentralized autonomous organization) comprising indie fashion designers and a new standard for virtual garments to be interoperable in the metaverse, so she has her work cut out for her. Luckily, she seems to enjoy it.
“It’s been a good way to be able to work and still have my window,” she says, telling me how she has just gone through the incredible scenery of the Rocky Mountains and the Sierra Nevada mountain range. Our conversation is interrupted regularly by her signal dropping as her train careens east: next stop, Chicago, then D.C., and on to Miami. The interruptions have also forced her to sleep more than two hours a day—and not upright by her desk—for the first time in months. She confessed to this not particularly restful-sounding sleep routine in crypto publication Decrypt.
Digital Ax and projects like it are pushing to create digital clothing, underpinned by NFTs and other crypto tech. It’s a trend that might be called “Web3 fashion”—or at least, that’s MacKinnon-Lee’s preferred term of art—and the related idea of “wear to earn.” Some investors believe that Web3 fashion could be the next big thing for NFTs, after art and music.
Digital fashion will eat fashion
Here’s the basic investment thesis for Web3 fashion, summed up in a thread by Marc Weinstein, an investor at the crypto-native fund Mechanism Capital: People are spending increasing amounts of time online. As they do so, they’ll need all the signifiers they spent money on in the offline world. That includes cool looking clothes.
The idea of people paying real money for digital clothing is old hat. Gamers have been doing it with skins for years, and most prominently in recent hits like Fortnite. The latest examples of this trend are forays by brands like Nike into digital goods in the massively multiplayer world of Roblox.
Fashion already understands scarcity and speculating on scarce assets. Witness the trade in rare sneakers and other streetwear; or the deliberate supply constraints behind luxury goods.
Now add blockchains and the metaverse to the mix: NFTs are tokenizing these fashion products, and the fundamentally open nature of public blockchains mean that these assets can, in theory, interoperate. They’re also natively tradable, and have built in scarcity. It’s the perfect storm for an explosion of activity in digital fashion.
Wear to earn
This combustible mix is exactly what MacKinnon-Lee and her cohorts are betting on with Digital Ax. The first thing to understand about Digital Ax is that it’s not just digital fashion. Instead, it’s useful to think of it as digital fashion, plus a bunch of other—mainly crypto—stuff.
To hear MacKinnon-Lee describe it, it’s the difference between Nikes on Roblox and Nikes on Roblox, Fortnite and Decentraland that can be used as collateral on a DeFi lending platform: “If you’re wearing a dress in the digital world, not only can it be made of fire, but it can also give you functionality to access a particular squad or guild, or even a DAO.”
The idea of digital clothing that’s interoperable across different environments, and that carry some form of utility, is central to the notion of “wear to earn” that MacKinnon-Lee is promoting. It’s a riff on the “play to earn” model that’s behind blockchain games like Axie Infinity, where players get paid in tokens from the game that are also tradable on the open market—unlike the proprietary in-game currencies of the past. “We focus on wear to earn: How does your clothing yield money for you? How can it be put to work for you? It’s the combination of the metaverse, Web3 technology and decentralization,” MacKinnon-Lee says.
To hear MacKinnon-Lee describe the wear to earn model, it starts to sound a little less implausible. After all, luxury clothing and streetwear have already generated markets for people to trade those items. Different articles of fashion have varying degrees of rarity attached to them. People are already wearing-to-earn, in some sense, just with a lot more friction.
MacKinnon-Lee, unsurprisingly, agrees with this. “Web3 bakes a value layer into everything. Previously illiquid activities and assets are now entirely liquid,” she says. “Digital art existed for so many years, but in Web2 there was no way to profit off that or have tangible value behind it. There was no way to verify ownership, and that’s what blockchains are actually good for. That’s what creates all this value. That’s the power of it.”
Digital Ax components
So what, exactly, is Digital Ax? The first thing to understand is that it’s not a product; it’s an ecosystem. It’s also built on Ethereum (and Polygon, a sidechain of Ethereum). Crypto media pub Decrypt did a big and good profile piece on it, but even that was insufficient to capture all the components of the platform. You can also read the Digital Ax primer, which lists nine things under “core areas” alone.
So here’s a quick rundown, based on my conversation with MacKinnon-Lee. First, think of a fashion designer who wants to create some Web3 fashion. This designer needs some way to mint their own social tokens, NFTs, and then sell them. Digital Ax provides this, and calls it a realm. Once the designer has a supply of (fungible) tokens, they can use these to control access to various parts of their community, like Discord channels. This is a common mechanism used by social token communities like FWB, for instance.
These tokens are then used to coordinate supporters in a DAO, which in turn can interact with other DAOs, and thus benefit from specializing in different things. The end result is that a fashion designer should be able to create their own Web3 fashion label using the components in the Digital Ax world, and interacting with the wider world of DAOs and smart contracts on Ethereum. “It’s about being your own node on the network and coordinating with thousands or hundreds of thousands of other nodes,” MacKinnon-Lee says.
Some of the highlights of the Digital Ax ecosystem (also check out this blog post) include DIGIFIZZY, a digital magazine that features the work of Web3 fashion labels. Its day-glo aesthetic and skeuomorphic design capture Digital Ax’s Zoomer vibe perfectly. There’s also the DASH file format, which is meant to make renderings of digital fashion standardized across the metaverse. Lastly there’s the Global Designer Network DAO, where the Digital Ax blog says hundreds of designers are working on fractional garment ownership (create patterns, textures or other bits that others can reuse) and releasing their own on-chain fashion collections.
With such an expansive vision for Web3 fashion, what does MacKinnon-Lee think of traditional fashion brands’ forays into the cryptosphere? “Every brand that has come in from Web2, they’re not understanding that Web3 is a completely different medium. It requires them to relinquish power to their participants. Everyone within that market is participating. That’s why the indie market is so strong, it’s completely native to Web3. It’s completely decentralized,” she says.
It’s early days for Digital Ax and Web3 fashion. MacKinnon-Lee says she estimates there are 3,000 active monthly participants in the ecosystem, with a total of 15,000 community members all told. But her phone signal drops again; our time is up. I recall something she said early in our interview: “Just as fashion is a tool of self-expression in the physical world, in the metaverse it’s going to be 100-200x [multiples of that value]; you can’t even comprehend the staggering scale—none of us can.” There’s a metaverse to clothe, and Digital Ax wants to be a big part of that.