As a researcher with a background in technology and digital markets, I have witnessed the meteoric rise and subsequent fall of the NFT market over the past few years. The recent lawsuit against Dolce & Gabbana for mismanaging their DGFamily NFT project is yet another reminder of the risks associated with this emerging space.
Recently, the American division of the renowned Italian luxury brand Dolce & Gabbana has been hit with a lawsuit over mishandled DGFamily NFTs (Non-Fungible Tokens).
On Thursday, Luke Brow, a customer, initiated a lawsuit against Dolce & Gabbana USA on behalf of other buyers, claiming that they suffered significant losses – approximately 97% – from the NFTs they purchased for $6,000 due to the company’s alleged mishandling of delivery.
As an analyst, I’ve noticed that the brand made headlines by selling NFTs (Non-Fungible Tokens) on Ethereum. They ensured buyers that they would reap various experiential perks. According to the official website, holders will be entitled to “special access to limited-edition drops and collaborations, encompassing both digital wearables and tangible merchandise, along with exclusive invitations to a select range of Dolce&Gabbana events, both virtual and physical.”
According to the lawsuit, Dolce & Gabbana allegedly did not provide the promised NFTs and associated advantages in a timely manner. The delayed digital garments, which arrived twenty days behind schedule, were reportedly functional only on a metaverse platform with minimal activity as per the complaint filed at the Manhattan federal court.
According to Bloomberg’s latest update, the usage of NFTs purchased from Dolce & Gabbana was reportedly delayed by 11 days beyond the initial expected release date. Brown, who claims a monetary loss of $5,800 on his acquired NFTs, asserts that approval from the metaverse platform was not secured in advance by the fashion brand prior to their sale.
“According to the criticism, their practice has been to make promises about delivering products that they ultimately don’t fulfill. Once a project or community is involved, they may unexpectedly abandon it.”
Significantly, the lawsuit involves UNXD in the proceedings. In February 2022, Dolce & Gabbana teamed up with UNXD to introduce DGFamily, their latest NFT offering, which built upon the success of their first NFT drop, Collezione Genesi – an exclusive, nine-piece luxury collection.
As a crypto investor, I can tell you that my investment in DGFamily reached its maximum value of 0.529 Ethereum on July 16, 2022. However, as the NFT market started to cool down in 2023, the price of this token began to plummet. Now, I’m seeing it trade at approximately 0.024 Ethereum, which represents a staggering drop of more than 95% from its all-time high.
NFT Market Slowdown
The thriving NFT market, which once saw massive transactions worth millions and drew numerous celebrities, now appears abandoned. Recent statistics show that trading volumes have dropped an astounding 97% since the beginning of 2021. Furthermore, approximately 95% of NFT projects have experienced complete loss of value.
As an analyst, I can tell you that this industry’s once robust foundation has been significantly challenged, causing ripples of worry amongst traders and onlookers alike.
I’ve analyzed the data from NFT Ora and found that the global NFT market cap exceeded $193.84 billion in January this year, indicating a glimmer of optimism for the industry. The market has shown signs of revival in 2024 compared to the previous year, with projections pointing towards a 41% rise in marketplace value.
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2024-05-17 11:54