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Adidas "Into the Metaverse": Web2.5 marketing campaign in blockchain clothing

Updated: Oct 13, 2025

Adidas's December 2021 NFT launch generated $23 million in hours but represented centralized corporate control wrapped in decentralized technology rhetoric. The project used standard blockchain infrastructure (Ethereum ERC-1155) while maintaining traditional Web2 business models, including full corporate governance, revocable licenses, trust-required redemption, and discretionary utility. By September 2023, the original NFTs were abandoned, forcing holders into a new project or leaving them with worthless tokens that had lost 94% of their value. This gap between "community-first Web3" marketing and centralized execution exemplifies how major brands misunderstood or deliberately misrepresented blockchain's transformative potential.


Adidas NFT metaverse technical infrastructure: Standard implementation with centralized control mechanisms

Adidas deployed its NFT collection on Ethereum mainnet using the ERC-1155 semi-fungible token standard, a professionally implemented but unremarkable technical choice.

The smart contract at address 0x28472a58a490c5e09a238847f66a68a47cc76f0f used OpenZeppelin's audited libraries (v4.4.1) compiled in Solidity v0.8.9, incorporating standard modules: ERC1155Supply for tracking, ERC1155Burnable for phase transitions, Pausable for emergency stops, and PaymentSplitter for revenue distribution.


The contract's 30,000 token supply with 0.2 ETH mint price generated 5,924 ETH ($23M) split among multiple parties: Adidas retained only 27% while BAYC, gmoney, and PUNKS Comic each took 21%, with Pixel Vault receiving 10%. This revenue distribution, fully transparent on-chain, revealed uncomfortable truths about value capture that contradicted Adidas's brand-forward marketing.


Critical centralization mechanisms embedded in the contract fundamentally undermined decentralization claims. The owner address controlled essential functions: pause() could halt all transfers, setURI() allowed metadata endpoint changes at any time, editWindows() controlled time-based mechanics, and setPrice() enabled mint price modifications. While the contract logic itself was immutable (not upgradeable via proxy patterns), these administrative controls gave Adidas discretionary power over crucial aspects of token functionality.


The Merkle proof whitelist system provided gas-efficient early access verification—20,380 tokens reserved for BAYC/MAYC holders, Pixel Vault NFT owners, and gmoney/Adidas POAP holders. This cryptographic allowlist represented genuinely decentralized verification, with proof validation occurring entirely on-chain without requiring centralized databases. However, this technical sophistication contrasted sharply with security failures elsewhere: one exploiter bypassed the "2 NFTs per wallet" limit by deploying 165 sub-contracts that each minted 2 tokens, acquiring 330 NFTs and profiting ~$630,000. For a project with "nearly infinite budget," this exploit exposed inadequate security auditing.


Governance structure: Purely corporate, zero community participation

Despite "with the community, for the community" marketing rhetoric, governance was entirely unilateral corporate control with no decentralized decision-making mechanisms. The smart contract contained zero DAO structures, no token-weighted voting systems, no on-chain proposal mechanisms, and no community treasury. All decisions, including phase transitions, utility additions, redemption mechanics, partnership selections, and ultimately the project's abandonment, were made exclusively by Adidas's Web3 task force led by VP Erika Wykes-Sneyd.


The announced "Three Stripes Council" appeared purely advisory if it existed at all. No evidence emerged of actual council formation, member selection, or binding authority. Discord served as the primary community channel (managed by Pixel Vault with 50,000+ daily active users at peak), but this represented traditional customer engagement, not governance. Community members could provide feedback but held no voting rights, no proposal powers, and no influence over roadmap decisions.


Partnerships with BAYC, gmoney, and PUNKS Comic provided cultural credibility and Web3 legitimacy but no governance power. Adidas purchased BAYC #8774 for 46 ETH ($156,000) in November 2021, creating "Indigo Herz" as their metaverse ambassador. gmoney contributed strategic guidance and his iconic orange beanie design, while PUNKS Comic integrated Indigo Herz into comic narratives. These partnerships were marketing collaborations, not power-sharing arrangements, as the influencers extracted significant revenue (21% each) but couldn't override Adidas's strategic decisions.


This governance model fundamentally contradicted Web3's ethos of community ownership and decentralized control. As one analyst noted: "In web3, subscribers are your family with whom you co-create a product. In Web2, subscribers are just potential buyers, and the product is created by the company. Adidas took a Web2 approach."


NFT mechanics and rights: Revocable licenses, not ownership

The mint sold out in approximately six minutes after public launch opened at 6:00 PM ET on December 17, 2021, following a turbulent early access period that began at 1:30 PM and required pausing due to technical issues with MAYC holder minting. Thousands lost gas fees on failed transactions, and while Adidas promised reimbursement but delivery remained unclear.


Holders received Phase 1 ERC-1155 tokens providing access to three physical products: an Adicolor Firebird tracksuit, Hash hoodie, and gm gm beanie (gmoney's signature orange beanie). Between April 28 and May 18, 2022, holders could burn their Phase 1 NFT through Adidas's website to receive Phase 2 tokens and physical merchandise orders. This burn mechanism was technically automated via smart contracts, but the redemption process required trusting centralized Adidas infrastructure.


Beyond physical products, promised utilities included "virtual land experiences" in The Sandbox, "ongoing digital utility," early access to future drops, and the ability to "shape the kinds of products and experiences" Adidas creates. In practice, deliveries included: a June 2022 capsule airdrop to Phase 2 holders, a November 2022 Virtual Gear collection of 16 digital wearables (obtained by burning capsules), limited Sandbox integration, Ready Player Me avatar compatibility across 1,500+ apps, and March 2023 participation in Decentraland's Metaverse Fashion Week.


The legal structure fundamentally contradicted blockchain ownership principles. Adidas's Terms and Conditions granted only a "revocable, non-exclusive license" to display artwork, not ownership of underlying assets or intellectual property. The license automatically terminated upon NFT sale/transfer, meaning secondary buyers received no rights without separately accepting terms. Section 7 of the terms specified numerous automatic termination conditions: upon transfer, if the NFT wasn't "rightfully and lawfully purchased," for any terms breach, for "unlawful business practice," or for "other circumstances which would make it unreasonable" for Adidas to continue.


Post-termination consequences were severe: "adidas may disable your access to the Art," "deny access to any further benefits, services or goods," and holders "shall delete, remove or otherwise destroy any backup or single digital copy of the Art." Terms explicitly stated Adidas "does not make any promises or guarantees about the availability of the Art on the Internet or that they will host the Art at any specific location and/or for any specific period of time," disclaiming hosting obligations entirely. The terms even recommended holders "save a local copy of the Artwork," tacitly acknowledging non-permanence.


Transaction transparency: On-chain clarity with metadata opacity

All ownership and transfer data existed transparently on Ethereum's public blockchain, fully viewable through Etherscan. The verified smart contract source code, every mint transaction, all transfers, and burn events created an immutable audit trail. Event emissions tracked purchases, redemptions, and payment distributions with complete transparency. As of research date, 7,694 holders owned tokens across the collection with total trading volume exceeding 48,400 ETH on secondary markets.


Payment distribution through the PaymentSplitter contract showed exactly how much each party extracted from primary sales, providing transparency that revealed Adidas's limited take (27%) compared to partners' substantial shares. All revenue releases emitted public events, creating accountability for financial flows that traditional corporate structures would obscure.


However, metadata storage architecture remained conspicuously unclear and likely centralized. The smart contract's uri() function returned concatenation of a base URI + token ID, but no IPFS Content Identifiers (CIDs) appeared in the contract code or documentation. Industry-standard decentralized NFT projects use IPFS URIs (ipfs://) for immutability or Arweave for permanent storage. Adidas provided neither explicit commitment to decentralized storage nor technical documentation of their metadata infrastructure.


The terms' disclaimer, stating that they "do not make any promises or guarantees about the availability of the Art on the Internet," strongly suggests centralized or semi-decentralized hosting without permanence guarantees. Combined with the setURI() owner function allowing metadata endpoint changes at any time, this architecture gave Adidas discretionary control over what holders' NFTs displayed. While ownership records lived immutably on-chain, the actual content those records pointed to remained mutable and potentially ephemeral.


This represented a critical limitation: blockchain verified that you owned something, but Adidas controlled what that something was. True decentralized NFT projects store metadata on IPFS (like Bored Ape Yacht Club) or entirely on-chain (like CryptoPunks and Autoglyphs), ensuring permanence independent of any corporate entity's continued operation or goodwill.


Asset transfers: Smart contracts for NFTs, trust for physical goods

NFT transfers operated through fully automated, trustless smart contracts using standard ERC-1155 functions, including safeTransferFrom() for individual transfers and safeBatchTransferFrom() for batch operations. No Adidas intervention was required or possible for blockchain-level transfers. The approval system allowed operators via setApprovalForAll(), and transfers validated either direct ownership or approved operator status. These peer-to-peer transfers on Ethereum required no intermediaries and couldn't be blocked by Adidas (except during the pause function's emergency activation or active sale windows).


The burn mechanism for phase progression was similarly automated: holders called redeemCardForOther() to burn Phase 1 tokens and mint Phase 2 tokens during defined time windows. This smart contract function executed automatically without Adidas involvement once users initiated the transaction through the official website interface.


Physical product redemption, however, required complete trust in centralized Adidas systems, the exact opposite of blockchain's trustless ideal. The claim process demanded holders visit, connect their wallet to Adidas's centralized website, burn their Phase 1 NFT through Adidas's interface (not directly on-chain), select sizes, and await traditional e-commerce fulfillment. The website immediately processed orders without allowing changes, requiring personal information input and creating dependence on Adidas's shipping infrastructure.


This created multiple centralized points of failure: website unavailability during the time-limited claim window would prevent redemption entirely; DNS/domain control issues could break the redemption interface; geographic restrictions enforced centralized sanctions compliance (blocking Cuba, Iran, North Korea, Syria, and specific Ukrainian regions); and physical fulfillment required trusting Adidas's logistics. Terms stated orders were "subject to verification and approval," giving Adidas discretionary denial power.


A truly decentralized redemption would use oracle-verified shipping, on-chain redemption proofs, and decentralized fulfillment networks. Instead, Adidas employed traditional e-commerce infrastructure with a blockchain wrapper. One analyst captured this perfectly: while NFT ownership was cryptographically verified and transfers were permissionless, utility realization required "traditional KYC-style compliance" and trust in corporate fulfillment promises. The blockchain guaranteed you owned the token; Adidas's goodwill determined whether that token delivered promised value.


Centralization analysis: 7.5/10 highly centralized architecture

A comprehensive centralization assessment reveals Adidas's project scored 7.5/10 on centralization (where 10 is fully centralized), contradicting its Web3-native positioning:

Governance (10/10 centralized): Pure corporate control with zero community decision-making power, no DAO, no voting mechanisms, no community treasury.


Smart contracts (6/10 centralized): Immutable core logic but extensive owner functions for pausing, URI changes, price modifications, and window adjustments. Single owner address controlled critical functions without multi-sig protection.


Metadata storage (8/10 centralized): Unclear architecture likely involving centralized servers; no confirmed IPFS implementation; terms disclaimed hosting obligations; Adidas could modify or cease hosting.


Utility/benefits (9/10 centralized): Entirely revocable at Adidas's discretion; Phase 1/2 support permanently ended September 2023 despite "ongoing utility" promises; time-limited redemption windows; no smart contract guarantees for promised benefits.


Redemption (10/10 centralized): Website-dependent, trust-required process; centralized fulfillment; geographic restrictions; discretionary approval; single point of failure.


Legal structure (9/10 centralized): Revocable licenses instead of ownership; numerous automatic termination conditions; traditional terms governed by German law; NFT represented conditional access, not asset ownership.


Decision-making (10/10 centralized): All strategic decisions unilateral by Adidas; roadmap changes, phase transitions, and project abandonment decided without community input.


Critical vulnerabilities compounded centralization risks. The November 2022 Virtual Gear contract contained a severe security flaw, as the burnToMint() function didn't verify the caller owned the NFT being burned, and improper use of setApprovalForAll allowed attackers to steal multiple NFTs. A security researcher identified this vulnerability; Discord support took one hour to escalate; the initial "fix" didn't solve the problem; and minting required pausing after 5+ hours. The researcher noted "the code was held to a very low standard: poor documentation with almost no comments." This demonstrated inadequate security auditing despite the $23M raise and supposedly infinite budget.


Administrative key control created additional single points of failure. One owner address controlled pausing, URI changes, price modifications, and window adjustments without multi-sig wallet protection. If this key were compromised or lost, significant disruption would follow. The PaymentSplitter complexity created dependencies on partner relationships. Website and DNS control meant domain seizure or expiration would break redemption functionality. Ecosystem lock-in meant utility was valuable only within Adidas-controlled environments, and if Adidas exited Web3 (which effectively occurred), entire project value evaporated.


Ownership verification: Cryptographic on-chain, licensed off-chain

Blockchain-level ownership verification was genuinely cryptographic and decentralized, using multiple security layers. The Merkle proof system for early access employed keccak256 hashing of index, address, and quantity, with MerkleProof.verify() validating proofs on-chain without centralized databases. Standard ERC-1155 ownership tracking used blockchain mappings (mapping(uint256 => mapping(address => uint256)) private _balances) queryable via balanceOf() functions. All transactions required Ethereum's ECDSA signature scheme, ensuring only private key holders could authorize transfers. The approval system allowed delegated operators while maintaining cryptographic verification of authorization.


This represented strong cryptographic proof that a wallet address owned specific tokens, verifiable by anyone, immutable, and independent of Adidas's databases or goodwill. Ownership history was permanently recorded on Ethereum's blockchain, creating an authoritative, censorship-resistant record.


However, ownership of the blockchain token differed fundamentally from ownership of associated assets and rights. The legal terms made this explicit: "adidas (or, as applicable, its licensors) owns all legal right, title and interest in and to the Art." Token holders received only a "revocable, non-exclusive license to display" artwork, not copyright, not intellectual property, not commercial rights. This license existed in Adidas's legal terms and databases, not on-chain.


The distinction was critical: blockchain proved you owned Token #1234; Adidas's terms determined what that ownership meant. You could cryptographically prove ownership, but Adidas could revoke your license to use associated art, deny access to utilities, and disable your ability to view content. Terms included extreme content restrictions, as holders couldn't use NFTs for commercial purposes, create derivatives, or allow third parties commercial benefit. Violations resulted in immediate license termination.


This hybrid model, cryptographic ownership proof for tokens, database-dependent licensing for rights, represented the "Web2.5" compromise: using blockchain's technical infrastructure while maintaining traditional corporate control over value and utility. Projects embracing genuine Web3 principles grant CC0 (Creative Commons Zero) licenses or perpetual commercial rights embedded in NFT ownership itself, not separate revocable terms. Examples include mfers, Crypto Coven, and Nouns DAO, where owning the token is owning the rights, without corporate intermediaries controlling utility.


Data permanence: Modifiable by Adidas, not immutable

Token ownership records on Ethereum are permanently immutable, with transfer history, mint events, and burn records cannot be altered by anyone, including Adidas. This blockchain layer provides absolute permanence for who owned which tokens when, creating an authoritative historical record that will persist as long as Ethereum exists.


Everything else exhibited varying degrees of mutability and impermanence. The smart contract's setURI() owner function allowed Adidas to change the metadata base URI at any time, effectively redirecting where tokens pointed for their associated content. While the contract logic itself wasn't upgradeable (no proxy pattern), this URI control meant Adidas could alter what NFTs displayed or stop hosting metadata entirely.


Terms explicitly reserved Adidas's right to "modify the Art at any time" and disclaimed any "promises or guarantees about the availability of the Art on the Internet." The recommendation that holders "save a local copy of the Artwork" tacitly acknowledged that Adidas might cease hosting, which is unusual for NFT projects claiming permanence.


No IPFS CIDs or Arweave addresses appeared in documentation, suggesting metadata lived on mutable, centralized servers rather than permanent decentralized storage.

Utility proved definitively impermanent. Phase 1 and 2 NFT support officially ended September 18, 2023, less than two years after launch, with the burning window closed permanently. Original holders who didn't burn within the deadline lost all utility forever. This demonstrated that "ongoing digital utility" claims were non-binding marketing, not technically enforced commitments. Adidas could discontinue utility, deprecate NFTs, and force migration to new projects at will.


The license structure created additional impermanence: automatic termination conditions meant access could disappear upon NFT transfer, terms breach, unlawful business practices, or "other circumstances which would make it unreasonable" for Adidas (an extremely broad discretionary standard). Post-termination, Adidas could "disable your access to the Art" and "deny access to any further benefits, services or goods."


Contrast this with truly permanent NFT implementations: CryptoPunks store 24x24 pixel images entirely on-chain, guaranteed to exist as long as Ethereum exists; Art Blocks generates art from on-chain algorithms; Bored Ape Yacht Club uses IPFS with CIDs in contract code, ensuring metadata persistence independent of Yuga Labs. These projects embraced permanence as a core value proposition. Adidas prioritized corporate flexibility, including the ability to modify, revoke, and discontinue, over immutability.


Implementation versus marketing: Massive gap exposing Web2.5 reality

Marketing narrative positioned the project as revolutionary Web3 adoption: "with the community, for the community," "Open Metaverse virtual land experiences," "ongoing digital utility," "co-created with the community throughout 2022 and beyond," and "community-first approach" guided by "NFT OGs." The December 2021 announcement described it as "a pretty historic moment in the grander scale of the NFT universe," with partnerships presented as collaborative rather than brand-led.


Actual implementation revealed a traditional corporate marketing campaign with blockchain wrapping. Technical analysis found no innovation, as the project used a standard ERC-1155 implementation using battle-tested OpenZeppelin libraries with no novel smart contract features. Governance analysis found zero DAO structures or community decision-making power, indicating pure top-down corporate control. Storage analysis found unclear, likely centralized metadata hosting with no permanence guarantees. Redemption analysis found trust-required centralized processes, not trustless automation. Legal analysis found revocable licenses rather than ownership, meaning holders purchased conditional access to Adidas-controlled benefits.


The project's trajectory from launch to abandonment epitomized this gap. Initial sale generated $23M in hours but suffered immediate technical failures: smart contract exploit allowing 330-NFT bypass of per-wallet limits, minting pauses causing thousands in lost gas fees, MAYC holder errors requiring extended troubleshooting. The "single animated digital artwork with 30,000 copies" was described as "mundane and boring" despite partnerships with supposed NFT experts. Secondary market performance was catastrophic, with only ~20% of primary sales volume ($4.7M vs $23M), and floor price currently 0.047 ETH represents 94% value loss from 0.2 ETH mint price.


Community sentiment evolved from initial hype to deep disillusionment. Discord showed frustration with "slow rollout of merch, with repeated delays." Merchandise shipments originally scheduled for mid-June 2022 were delayed "several weeks" due to supply chain issues, reflecting standard corporate logistics problems, not Web3 innovation. "Many claimed utilities from NFT ownership have yet to come to fruition" became a common refrain. The forced September 2023 migration created panic: burn Phase 1/2 NFTs for the new ALTS project or hold worthless legacy tokens.


Expert consensus categorized this as "Web2.5", with traditional brands using blockchain as a marketing veneer. Web3 consulting firm Serotonin noted brands "launched as just collections of tokenized digital art, without immediate additional utility" beyond aspirational roadmaps. Community verdict: "NFT collectors and enthusiasts are feeling short changed and abused... It's stunts like this that give genuine NFT artists a bad reputation." Critical analysis concluded: "It's evident that the 'Into the Metaverse' collection was a simple marketing stunt designed to curry favor for Adidas with crypto enthusiasts."


The comparison to Nike/RTFKT illuminated strategic differences: Nike acquired RTFKT for $1B+, buying authentic Web3 expertise; Adidas partnered with influencers for endorsements. Nike integrated blockchain into product strategy generating $100M+ secondary sales; Adidas bolted it onto traditional campaigns with only $4.7M secondary volume.


One analyst summarized: "Unlike adidas, there is a strictly defined target audience [for Nike/RTFKT]... Adidas, meanwhile, is even depressed... there was some kind of confusion in the ranks of the web3 division."

Specific broken promises documented the marketing-reality gap:

  • "Throughout 2022 and beyond" → Project abandoned September 2023

  • "Open Metaverse virtual land experiences" → Minimal Sandbox integration with no meaningful experiences

  • "Co-created with the community" → Zero community governance; all decisions corporate-controlled

  • "Ongoing digital utility" → Limited to forced burn mechanisms and premature termination

  • Gas fee refunds for failures → Promised but unclear if delivered

  • "No rush, you can claim at any period" → Later imposed hard deadlines creating FOMO

  • "Community-first" approach → Web2 playbook with subscribers as buyers, not co-creators


Verdict: Marketing spectacle, not trust transformation

Adidas's "Into the Metaverse" represented blockchain adoption without Web3 transformation, using decentralized technology (Ethereum) to enforce centralized control rather than to enable genuine decentralization. The project demonstrated how major brands could extract value from NFT hype ($23M in hours) while maintaining traditional corporate power structures: unilateral decision-making, revocable licenses, trust-required fulfillment, discretionary utility, and eventual abandonment.


The technical implementation was competent but conventional: professionally deployed smart contracts using industry-standard libraries with appropriate security features. Ownership verification was genuinely cryptographic. Transaction history was transparently on-chain. NFT transfers were permissionless and automated. These aspects represented real blockchain usage, not pure theater.


However, every layer above basic token functionality remained centralized: governance by corporate fiat, metadata on likely-centralized servers, utility controlled by Adidas's discretion, redemption requiring trust in corporate systems, licenses revocable under broad conditions, and data permanence disclaimed in terms. The project's 7.5/10 centralization score reflected this hybrid reality, with blockchain infrastructure supporting Web2 business models.


The marketing promised trust transformation; the implementation delivered trust dependency. True blockchain innovation reduces or eliminates the need to trust centralized intermediaries by encoding commitments in immutable smart contracts, storing data on decentralized permanent networks, and granting communities governance power. Adidas did the opposite: blockchain verified you owned a token, but Adidas's continued operation, goodwill, and discretionary decisions determined whether that token had value. The September 2023 abandonment proved this definitively, as Adidas unilaterally sunset Phase 1/2 NFTs, forcing migration or leaving holders with worthless tokens.


This "Web2.5" approach, combining blockchain aesthetics without decentralized substance, characterized the broader 2021-2022 brand NFT wave. As Web3 experts noted: "Until web2 brands understand these truths we would continue to have failed launches ... web3 doesn't focus on just a person but a community... People want something that adds value." Adidas applied "traditional campaign thinking to ecosystem building," hired "influencers, not builders," and "treated NFTs as product launch" rather than paradigm shift.


The project succeeded as a marketing spectacle generating immediate revenue and attention. It failed as Web3 innovation, demonstrating not how blockchain could transform brand relationships, but how brands could extract value from blockchain's cultural moment while maintaining traditional power asymmetries. Holders received not community ownership or governance rights, but expensive ($765) access to merchandise (hoodie, tracksuit, beanie) wrapped in smart contract infrastructure that primarily benefited Adidas's narrative control.


For organizations evaluating blockchain initiatives, Adidas's experience offers crucial lessons: technical competence in deploying smart contracts doesn't equate to Web3 innovation; marketing rhetoric about community and decentralization without actual governance mechanisms breeds disillusionment; revocable licenses and centralized control contradict blockchain's value proposition; and treating NFTs as novel sales channels for existing products misses the technology's transformative potential. Genuine blockchain adoption requires reimagining organizational structures, not just payment rails, a transformation Adidas's $23M marketing experiment never attempted.


Disclaimer: The content on this website is for marketing innovation and education purposes only and should not be considered investment advice.


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