Solving the Yeezy Problem

Jan 19, 2023 8:01 PM

When Kanye drops a pair of Yeezys, they sell at a retail price of $220. People all around the world clamor to get their hands on a pair of Yeezys, and every lucky soul that manages to get them pays the same $220 price.

The problem is, Yeezys are so popular that some enterprising sneaker-heads and scalpers will buy out as many shoes as possible just to resell them immediately at two, three maybe even ten(!) times the retail price.

Wait, why is this a problem?

Isn't it great that Yeezys are so in demand? Surely that resale price is great for Kanye and Adidas since they gain additional brand equity and hype for the next drop?

Sure, those benefits are nice, but are a small consolation. Why? Because Kanye and Adidas get none of that resale value. None. Not a single cent.

They sell their sneakers for $220 and then they get sold for $2000.

This is so commonplace for Yeezys and other popular goods and art that there are entire exchanges like StockX and GOAT dedicated to facilitating their markets—places where they can be bought and sold at a price determined by the market.

The price of items on these platforms are dynamic, which means it changes based on the supply and demand. These exchange are great, but they are owned by middlemen, not by the creators themselves.

This means that Kanye, and the creators all around the world like him are missing out on the value that they create.

The solution: give the power of exchanges to creators.

What if we could allow Kanye to create his own exchange like StockX or GOAT, and drop his Yeezys at a dynamic price? This would mean that as the Kanye sells more Yeezys and demand increases, the price increases with it.

Not only that, what if we could give Kanye a share of the trading fees as hypebeasts and traders are buying and selling them as the price changes? That’s an entirely new stream of revenue for creators that gets earned in real time!

Well, Zora unlocks exactly that—it give creators the power to create their own exchanges for their limited-edition goods and art. We like to call ourselves the Everything Exchange.

How? By using cryptocurrencies.

Zora is able to empower creators with their own markets by using cryptocurrencies. By using crypto, we can enable creators to create open and transparent markets natively on the internet which enable true price discovery at near 0 cost.

Dropping an item on Zora creates a cryptocurrency that represents it. If you want to drop 1,000 pairs of sneakers, there will be 1,000 tokens.

1 $YEEZY token is redeemable for 1 Physical Pair of Yeezys

This enables the physical item to be dynamically priced, based on the supply and demand of the open market.

People can trade and speculate on the items price as it goes up and down. They are able to trade culture. The creator earns a share of trading fees from buys and sells.

Yeezy’s have a starting price of $220. The price goes up and down as people buy and sell them. Kanye earns a share of trading fees.

Buying 1 $YEEZY means you can redeem it for the physical pair of sneakers that the token represents.

What’s new is that you also have the option to Sell it back to the market for a profit or loss.

You can choose to redeem 1 $YEEZY for the real world good, or cash in for a profit (or loss)

When someone redeems their token for the real world item, the creator then earns that revenue at the current market price. The redeemed token is destroyed and is forever removed from the market.

The person who redeemed the token gets the physical pair of sneakers shipped to them. Kanye gets the revenue from the sale at the current market price.

We’ve solved the Yeezy Problem by giving creators the power to create their own markets.

The result of dropping on Zora is a dynamic market that’s owned by the creator, which helps to maximize their value capture for their limited-edition goods and art.

Creators no longer need to guess a single price to set for their items, they simply set the minimum and let the market decide from there, capturing the value along the way. Not only this, creators now earn trading fees! This is an entirely new revenue line that rewards creators for engaging markets as people trade the hype.

The creator’s community can take part in the action too, with the barrier to speculation now drastically lowered. Fans can now buy and sell the goods without having to wait inline for hours, or be in a specific physical location for the drop—these markets are native to the internet, so anyone can access them and can easily trade them, helping in price discovery. A true win-win for creator’s and their communities.

Do you want to drop on Zora?

We want to help creators bring their ideas to the world. Our team will help you figure out all the details, get the capital and make it a reality.