Utility NFTs stop counterfeits and create new trade opportunities, says Swiss Foundation ORIGYN

Business & Technology
Sponsored by ORIGYN Foundation

At a time when the counterfeit market still makes up an estimated 3.3% of world trade, ORIGYN is looking to bring authentication procedures to the next level by creating a connection between products and consumers that has not been visible before.

Chinese citizens walk past a Rolex watch advertisement in Shanghai, China. Oriental Image via Reuters Connect

This article is brought to you by ORIGYN Foundation, a Switzerland-based non-profit organization specializing in combining intelligent technologies and decentralized computing to identify, authenticate and unlock the powers of ownership for the world’s most valuable objects.

Jason has a collection of watches in his NFT wallet. Every day he wears a different one in real life, all of which correspond to digital versions stored on his wallet on Web3, a token-based, decentralized iteration of the World Wide Web built on blockchain technology. The unusual process is powered by NFT authenticator ORIGYN, which has been unveiling technology that links NFTs on a wallet to unique physical objects. These utility NFTs have a real-world item attached, and they are about to create a whole new class of asset trading.   

Headquartered in Neuchâtel, Switzerland, ORIGYN is a nonprofit foundation with a simple focus: identity, authenticity, and proof of ownership. ORIGYN is also the largest project on the Internet Computer Protocol (ICP), the world’s first web-speed, web-serving public blockchain network developed by DFINITY. The company uses computer vision and blockchain to certify authenticated objects. 

“The concept is simple; we are a certification company. Our certificates guarantee authenticity of original and pre-owned luxury goods,” says Daniel Haudenschild, the CEO of ORIGYN Enterprise. “If the product turns out to be fake, we pay. That’s something everyone can understand.” 

How ORIGYN actually accomplishes this is rather complex. ORIGYN has created a powerful Web3 digital certification platform that combines artificial intelligence, machine learning, and decentralized computing. This platform allows certificates to be issued worldwide while also guaranteeing its authenticity for the item’s life cycle.

The user-friendly and game-changing nature of this authentication procedure is likely part of what led the startup to raise more than $20 million in its first funding round last year, fueling a valuation of $300 million with financial backing from billionaire investor Bill Ackman’s Table Management, crypto-focused hedge fund Polychain Capital, and socialite-entrepreneur Paris Hilton.

More than what meets the human eye

In a world where digital technologies are gradually entering all areas of our lives, NFTs — non-fungible tokens — are all the rage right now. For the unacquainted, this type of utility NFT refers to the one-of-a-kind combination of a unique, blockchain-based certificate that links ownership to real-world objects like artwork, collectibles, and luxury items. 

NFTs are keys to gated communities. Bored Apes allow you to enter the Board Ape Yacht Club, a whole series of experiences and virtual privileges. In a similar way, owning a certified pre-owned collectible from the UEFA Champions League may allow you to have a game side experience in the future. Alternatively, having the right watch on your wrist could let you listen in live to the chatter between a Formula One driver and his pit crew.  

A representation of cryptocurrency Ethereum is seen next to non-fungible tokens (NFTs) of Yuga Labs “Bored Ape Yacht Club” collection displayed on its website. Florence Lo/Reuters

Holding immense potential and what seems like endless new opportunities for the future of luxury goods, NFTs have certainly caught the eye of some high-profile brands. ORIGYN is taking the technology to the next level by creating a connection between products and consumers that has not been visible before.  

Launched in October 2020, ORIGYN is led by Haudenschild and three founding partners. The vision started when Vincent Perriard, a watch industry veteran with more than 20 years of experience in the field, teamed up with digital entrepreneurs Gian Bochsler and Mike Schwartz to bring forward a solution that eliminates counterfeiting of luxury timepieces.

While developing its technology, ORIGYN worked with a variety of industry leaders to collect and analyze detailed images of luxury watches and is extending its database with soon-to-be-announced partners. When the full potential of the technology is unlocked, these digital twins of timepieces, stored in a data bank on the blockchain, can be later called upon when consumers want to authenticate their watches.

And there’s a strong case to make for watch manufacturers to get on board with the idea. In partnership with ORIGYN, watch brands can utilize a powerful set of digital tools — including machine learning, artificial intelligence, computer vision, decentralized technology, and more — to scan timepieces and create digital doubles of them at their birth, a process that can take less than 30 seconds. Given the long life cycle of luxury watches, the technology is particularly helpful in allowing brands to boost their products’ permanent traceability, authentication, and asset transferability. 

Seeing success in luxury watch brands, ORIGYN is looking to apply its authentication technology to handbags, sneakers, diamonds, and even collectibles. “Luxury goes quite wide. When creating digital identities for items in different categories, they have distinct small points of reference that we need to pay attention to,” says Haudenschild. “We started with watches and are looking at other things, but we have to take it one step at a time.”

To further improve its ecosystem, ORIGYN also plans to launch a publicly traded token, OGY, in the first half of 2022. The native token will be the backbone of everything ORIGYN does, allowing holders to create and transact certificates of authenticity and vote in the governance of ORIGYN, Haudenschild says.

A new way to trade 

Once a guaranteed certificate is given to an object based on its biometry, almost any object becomes tradable. This new way of trading is particularly revolutionary for the secondary market in luxury goods, which has exploded in recent years due to consumer trends like reuse and upcycling.

Take the secondhand luxury watch market, for example. According to U.S consulting firm McKinsey, pre-owned watch sales are estimated to hit $30 billion by 2025, about half the size of the market for new, retail watches. In a market that’s bound to grow over time, authentication NFTs can make the trading fast and safe. 

At the core of this new transaction method is a digital trading card that can be redeemed for the actual watch by the bearer. With that, consumers can trade guaranteed authentic watches as an asset class from their Web3 wallets on their phones. The value of the NFT is at least the value of the watch in storage, sometimes even more — a lot more.  

A new weapon in China’s battle against counterfeits

Fake goods have long been the bane of nearly all businesses — and those making high-quality, highly sought-after items are mostly targeted by counterfeiters because they can ride on the brands’ reputation and success. The problem is particularly acute in China, where 80% of the world’s fake products are thought to be produced.

Despite stricter government regulations aimed at curbing the long-standing practice, Chinese counterfeiters appear to be too resilient to be defeated. Barred from hawking fakes on major ecommerce sites, schemers have reshaped their businesses by retreating to more private spaces online. Even for consumers who only shop in official designer stores, they have to protect themselves from being scammed by sales associates, some of whom have been caught swapping real products with fakes. In many cases, even the seemingly legitimate authentication sites could turn out to be fake, according to thefashionlaw.com.

And this is where ORIGYN can make a positive difference. “The counterfeit market doesn’t just hurt rich people’s brands. There’s a human cost to it. There’s a labor cost to it. There’s a sustainability cost to it. There’s a criminal aspect to it,” Haudenschild says. He notes that although it takes time and diligence to help Chinese consumers understand what ORIGYN is about, he believes that building up a marketplace in China is central to ORIGYN’s global mission and the benefits will eventually make up for it. 

“That feeling of getting ripped off is a human feeling that’s not limited to any marketplace,” Haudenschild says. “Our story is really straightforward, and it works in many different languages and in many different cultures.”