MetaZ Will Custody Your Collectible Sneakers In a Vault and Issue NFTs as Certificates of Ownership
One of the biggest conversations in the blockchain industry that tends to fly below the radar has to do with the custody of digital assets. It's so important that the word "custody" has actually become a verb and you'll hear it come up in questions like "Should an enterprise self-custody its cryptocurrencies or should it custody those and other digital assets with a trusted third party custodian?"
The idea of custody is as old as banks. The reason banks exist is because of the dangers involved in the self-custodianship of cash (eg: keeping all your money under a mattress). But currency isn't the only valuable asset that you may not trust yourself to protect. For example, art museums often act as custodians of private art collections on behalf of the owners of those collections.
Another prized collectible among the Gen Zs and Alphas are rare sneakers and South Korea-based MetaZ is looking to capitalize on the growing interest in collectible sneakers by offering a service that not only custodies the physical sneakers in a vault (where their pristine condition can easily be preserved), they issue a digital twin NFT that represents a transferrable certificate of ownership (in the same way that many other NFTs can be sold in the secondary markets). While MetaZ doesn't exactly fit into the enterprise blockchain category that Blockchain Journal likes to cover, it's not difficult to imagine a large apparel company that's already working with NFTs (eg: Nike) getting into a similar business where, instead of sending a physical collectible sneaker to a customer, it just sends the digital twin NFT for that sneaker instead and then the manufacturer custodians the sneaker as a service to the customer.
While at the NFT.NYC 2023 conference in New York City, Blockchain Journal editor-in-chief David Berlind took the opportunity to interview the MetaZ co-founder and platform lead Kim Kim to learn more about how the service works.
By David BerlindPublished:May 4, 2023
David Berlind: Today is April 12th, 2023. I'm David Berlind with the Blockchain Journal podcast. I'm coming to you from New York City, where right now NFT.NYC is taking place at the Javits Center on the west side of Manhattan.
Standing with me is Kim Kim. She is the co-founder and also platform lead for a company called MetaZ, which is doing something quite novel when it comes to NFTs. We are surrounded by sneakers here, pretty good-looking sneakers, very clean-looking, almost brand new. I understand that sneakers have now become something of a collectible that you are tapping into that idea of the collectibles market.
So if you step up a little closer to me so we don't get you out of camera here, why don't you tell me what MetaZ is?
Hyoimi Kim (Kim Kim): Well, MetaZ is a NFT marketplace for sneakers where all these NFTs are tied to physical sneakers where the users trade NFTs, instead of sneakers itself.
Berlind: Okay. I was kind of surprised to learn that sneakers are thought of as collectibles, almost like artwork is collectible, or... What are other collectibles out there besides artwork?
Kim: We only focus on sneakers.
Berlind: Right, but are there any other things that are kind of like this? Because if I understand it correctly, in order to be a collector of one of these sneakers, you can't actually hold the sneaker yourself. It's kind of like an art—
Kim: Yes, yes. Well, the reason being is when it comes to sneakers, it's important to have its condition as best as possible. So while we are storing these sneakers in a safe place, the user can freely trade with the NFT to minimize the damages to the physical ones.
Berlind: Okay, so there are a lot of implications to what you just said. If I understand it correctly, I have a sneaker, it's a collectible sneaker, other people want it, it's desirable. What you do is, instead of me sending the sneaker to somebody who wants to buy it, you basically create an NFT that's a digital representation of the sneaker. And instead of selling them the physical sneaker, I sell them the NFT, but you keep custody of the sneaker—
Kim: Exactly. Yes, we do.
Berlind: Okay, and that's something that collectors of sneakers are happy with? If I'm a collector of an item, stamps, coins, something like that, art, I kind of want the art or the item in my possession.
Kim: Oh, I see. Well, I think it's kind of different when it comes to sneakers. Like I've said, it's really important to have their condition as best as possible. But for collectors, there's a space limitations and other obstacles so I think it's a good service for collectors.
Berlind: Are they collecting it because they envision that at some point in the future, they're going to be able to resell it for a lot more money?
Kim: Yeah, exactly. That's our target community.
Berlind: And when you say it's your target community, how big is that community? I'm surprised to learn that this community even exists, so it must be pretty big for you guys. You're in a hot, premier spot here at NFT New York City. You've got a great booth here and all that. You're in a main traffic area. You're making a pretty big investment here. Is that a market, a big market?
Kim: Yeah, there is. I can't exactly remember the figure, but the sneaker's resale market globally is quite huge.
Berlind: How many people are keeping their sneakers with you right now?
Kim: We have about 900 pieces at the moment, but we are quite new. We launched our Web3 platform in December last year, and we haven't actually studied marketing actively yet. So we don't have many, I mean, [a] big volume of users yet, but we like to take this opportunity to expand our market towards U.S.
Berlind: So what's the process like? I go out and I buy some really fancy pair of sneakers, but I don't put them on. I don't—
Kim: You're not allowed to do it.
Berlind: Oh, you're not allowed to do it. But all I'm saying is I initially buy them, like I go to some store or something and I buy these sneakers and I decide these are collectible and I want to create a digital NFT.
You said you have to keep them so you're keeping the custody of the sneakers themselves. So what's that process like? Do I send the sneakers to you and then what happens?
Kim: You can simply go to our platform, which is called metaz.io, and you connect your wallet. There's a form where you fill in for the custody, then it will give you an address where to send your sneakers. Once it arrives in our center, it's going to go through authentication and if it passes inspection, it's going to be sent to our vault. In the meantime, we are issuing an NFT for that pair.
Berlind: I see. So the authentication process, I'm assuming, is very rigorous. Like you go through a lot of checks to make sure it's not a counterfeit pair of sneakers?
Kim: Yes. Yeah. We have quite a strict policy when it comes to authentication. We have a team of experts back in Korea, and we are also going to engage experts here in [the] U.S. as well.
Berlind: Okay. So the people don't have to send the sneakers all the way back to Korea—
Kim: No, no. We do have a center here, and we have quite a wide network who can provide us warehouse.
Berlind: What sneakers right now are deemed highly collectible? I see some that are behind you. I see some Nikes. I see Air, I'm assuming those are like Air Jordans. What are the most collectible ones?
Kim: Well, they are many, actually. But the thing is there's sneakers, which were issued by drawing from the Nike. So we don't actually accept every kind of sneakers, but that they are limited edition issued by Nike.
Berlind: By one of the big brands. What's the smallest limited edition? Will they issue like one sneaker? Is that done?
Kim: No, but if we define the limited edition, it doesn't really come out from their normal line. They come up with a plan, which collaboration they are going to do, or which limited edition they will issue in near future, so those are the ones who comes with limited number of, yeah, issuing.
Berlind: Like a limited run of production. So they're working with like an athlete or somebody like that, like a famous athlete, they make a hundred sneakers and those would be—
Kim: They've recently issued sneakers in collaboration with Tiffany.
Berlind: With the jewelry brand.
Berlind: Okay. That's very interesting. People can find you on MetaZ.io.
Berlind: And if they go there, they log in, they connect it to their wallet. Do you work with any wallet or just a certain wallet?
Kim:MetaMask. And there's also [an] app which connects to all the, well, a lot of wallets.
Berlind: Okay. Are you working with brands or have—
Kim: No, this is C2C platform.
Berlind: It's a C2C play, but it's a platform. I can imagine that the platform could be extended to work with other categories of products besides sneakers, right?
Kim: Yeah, it can be, but we just try not to take control over the volume or the kinds of sneakers on our marketplaces. And if there's a collector who has a big collection of sneakers so, yeah, they are most welcome, but we haven't really planned to engage brands yet.
Berlind: Okay. Well, maybe later once you get some traction, you might work something out with some of the big brands.
What happens if I want the sneakers back? Like if I've sent the sneakers to you, you've turned them into an NFT, maybe I sold them to somebody and that somebody wants to take possession of them, how difficult is it for them to get them back?
Kim: Well, it's quite simple. He can just connect his wallet to our platform, and there's a[n] online form where he can just simply fill in to request redeem. Once we receive that redeem request, the NFT will be sent back to us, we'll place an order, I mean the order for VDM will be placed, then the physical pair will be shipped to the owner.
Berlind: And what happens to the NFT, does it get burned?
Kim: Yeah, it gets burned.
Berlind: Gets completely burned. Very interesting.
Well, it's [a] really good example of the sorts of innovation that blockchain is stimulating across many sectors. This is a sector of business I didn't even know existed, collecting sneakers. I knew that sneakers were a hot item. Like in the high schools and stuff, kids will wear some pair of sneakers, and that'll be bragging rights over, especially if it's a rare pair of sneakers. But I was not aware that they are so collectible that people would actually be interested in finding a custodian like MetaZ to keep them in pristine condition. And instead of selling the sneakers and a secondary market, use NFTs to do it instead. That's amazing.
Kim: Thank you.
Berlind: Yeah. All right. Well, Kim Kim, the product lead and co-founder of MetaZ.io, thanks very much for joining us here on the Blockchain Journal podcast.
Kim: Thank you.