On Friday, Adidas completed the minting of its non-fungible token (NFT) collection in partnership with NFT brands Bored Ape Yacht Club (BAYC), PunksComic and influencer gmoney, as we explored before the drop. Overall, the NFT launch brought in $23 million, but as often happens with innovations, it came with a couple of hiccups. And as we’ll show, Adidas kept only a small portion of the takings.
In total there were 30,000 available NFTs for minting, with 380 retained for Adidas events and 20,000 available for early access to the three crypto partners and those that had received an earlier Adidas POAP token. The remaining 29,620 collectibles sold for roughly $775 each, bringing in almost $23 million. The drop sold out within seconds.
The thing about blockchain is the transactions are transparent. So we can see how the proceeds were divided up leaving little for Adidas. But then it’s a different kind of marketing campaign. Each of the three partners received $4.82 million of the proceeds, with PunksComic getting an additional $2.3 million, which happens to be 10% of the overall take. That leaves $6.2 million, which we assume is the wallet that belongs to Adidas, or some other marketing partner.
However, Adidas will end up paying out a chunk of that figure because of the issues encountered.
The first problem was a technical hitch with minting NFTs for Bored Ape holders resulting in a pause in minting. As a result, many people ended up paying Ethereum gas costs for NFTs that failed to mint because of the glitch, which Adidas said it would compensate for. That won’t be a small amount of money because some of the claims on Twitter were for a couple of hundred and others for thousands of dollars. We haven’t done the calculations, so it’s conceivable it could wipe out Adidas’ NFT income.
Another issue encountered is that Adidas wanted to limit the number of minted NFTs to two per digital address but did not manage to stop automated smart contracts from participating. Someone created a smart contract that generated several digital addresses and minted 330 NFTs. The individual ended up spending over $250,000 on purchasing the NFTs and $104,120 on gas fees. However, items in the collection are already selling for around $3,000, putting the person in profit to the tune of more than $630,000.
Despite the complications, the company’s social media team was very responsive throughout the launch, addressed complaints on Twitter, and rapidly reassured consumers that they wouldn’t have to bear gas costs that result from the minting glitch.
Regarding the collection’s reputation, it is selling on OpenSea at almost four times its original price.