New York Fashion Week is often described as a sensory experience. While attending shows you’ll hear the thud of bass-heavy music as models in well-tailored ensembles parade along the runway, the air thick with the scents of new money and luxury fragrance. If you’re well-connected, you’ll be able to interact with designers and try on garments, touching luxe denims, velvets, cottons and silks remixed into every hue and combination.

While established names often dominate NYFW and set the season’s trends, this year’s event embraced new players who showcased not only physical designs, but also digital expressions of creativity played out across mediums.

At NYFW’s Nolcha Shows, blockchain gaming ecosystem Chain Guardians took up space next to traditional designers, displaying their “phygital” (physical and digital) take on classic designs. In their collection, a colorful, anime-style bodysuit included an NFC chip that, when scanned, linked to a non-fungible token (NFT) that is wearable in the Chain Guardians metaverse.

Trying on one of their garments meant not only physically putting it on my body, but also interacting with it inside the brand’s virtual storefront using a virtual reality (VR) headset. Picking up a pair of digital Chain Guardian shoes with the handheld VR controllers, the patent leather was shiny, just as it would be in real life.

After taking off the headset and looking out over the Manhattan skyline from the 69th floor of the towering 3 World Trade Center building, I noticed a large sticker on one of the windows that read “Web3 Looks Good on You.”

So, what exactly does Web3 look like?

Megan Kaspar, managing director of Web3 venture capital firm Firstlight and founding member of digital fashion house Red DAO, has been a pioneer in blockchain-based digital wearables Web3 styling. In October 2021 she “wore” three pieces from DRESSX - a multi-brand retailer of digital-only clothing, NFT fashion items and augmented reality (AR) looks - on a Yahoo! Finance news segment using AR filters. In January, she had nine digital Fendi pieces tailored and transposed onto a photo of herself for the cover of a Haute Living issue.

“As we move to a reality where device disruption keeps occurring in the near term…that will come with the use of more digital fashion,” Kaspar told CoinDesk.

She defines digital fashion as having five major use cases at present.

First, there are digital-only garments sold as NFTs that are meant to be worn in the metaverse. This form of digital fashion was embraced by Tommy Hilfiger, Dolce & Gabbana, Forever 21 and dozens more designers who released full collections on metaverse platform Decentraland during the first-ever Metaverse Fashion Week in March.

The next is AR photo filters, which Kaspar used in her appearance on Yahoo! Finance. These filters are often used to create overlays on social media platforms like Snapchat, Instagram and TikTok, and can easily be integrated into live videos or photos. The third example is digital tailoring, meaning that after a real-life photo is taken, digital garments can be fixed onto a user’s photo, which is how Kaspar flexed Fendi on her Haute Living magazine cover.

Lastly, Kaspar notes that people can also view digital fashion as investable assets - whether that means purchasing NFT garments as speculative assets, such as a pair of NFT sneakers to resell for a profit. Alternatively, investors who purchase a rare digital designer handbag can prove their ownership over the asset on the blockchain.

Kaspar says that while many people view digital fashion as speculative investments for now, she believes that a “pretty viable solution” for mass adoption of these technologies will be created within five years.

In addition to the many use cases digital fashion currently serves, a handful of emerging brands are turning to the technology to help solve many of the problems plaguing the fashion industry.

One issue the fashion industry faces is the production of fast fashion, which has nearly doubled within the last two decades. Current fashion consumption trends result in large amounts of textile waste, much of which is sent to landfills, burned or sent to developing countries. In addition, it was estimated in 2019 textile production creates more than 1.2 billion tons of greenhouse gasses per year, larger than all international flights and maritime shipping combined.

While there are still concerns about emerging technologies like NFTs and their environmental impact due to energy consumption, some up-and-coming designers have found ways to use NFTs to tackle issues of overproduction and overconsumption of clothing. Notably, the Merge, Ethereum’s transition from proof-of-work to proof-of-stake consensus mechanisms earlier this month, is expected to reduce the network’s energy use by over 99% and make most NFT transactions more efficient.

KRWN Studio, a digitally-native, small-batch fashion brand that sells virtual streetwear as NFTs, aims to make fashion greener by manufacturing garments on the blockchain.

“My experience in the fashion world and what I was exposed to is extremely unsustainable and very corrupt,” KRWN CEO Amina Mehti told CoinDesk. “[KRWN Studio] is not using fabrics, we're not using textiles…what we as creators can do is offset [emissions].”

Digitally native brands that adopt a phygital model take on some of the environmental responsibility related to manufacturing, including the physical production of garments alongside minting digital replicas as NFTs. However, many recognize how they can scale operations and mindfully release products in small batches to avoid mass production.

Footwear manufacturer Shoes 53045 seeks to offset its environmental load by releasing two pairs of metaverse-ready NFT sneakers for every physical pair they produce. Co-founder and CEO Aurelia Ammour told CoinDesk that sustainability is an important part of the company’s mission, and it stays true to this mission by utilizing limited-edition drops, 3D printing in its manufacturing and minting NFTs on proof-of-stake blockchains like Ethereum to limit mining-associated carbon emissions.

“We make shoes that last and that are collectible, so [sustainability] is very important to us,” Ammour told CoinDesk.

Digital wearables provide users with tools for self-expression and are often used to adorn an avatar or another manifestation of a digital identity. Metaverse Fashion Week, for example, was fueled by a desire for self-expression and individuality online.

Tokyo White, a luxury fashion house focused on NFTs, aims to be a vehicle for digital identity. From clothing for metaverse avatars fit for a variety of occasions to AR filters that allow users to try on items, founder Toyko White told CoinDesk that digital design allows for greater freedom and creativity.

“You can be whatever you want to be depending on the metaverse that you go into…I think it's just an extension of what our minds are able to do in fashion,” White told CoinDesk.

Digital fashion also makes the industry more accessible for producers and consumers alike. NFTs make it easier for a designer to get their pieces out to the public and provide a broader range of prices for consumers.

Web3 wearables marketplace The Dematerialised (DMAT) prides itself on using blockchain technology to fix the mistakes of other retail giants. Co-founder Karinna Nobbs told CoinDesk that DMAT prioritizes accessibility and hopes to set a standard for future digital fashion houses.

“Whether crypto native or non-crypto native, people should be able to access digital fashion and NFTs. For us to have a luxury and an aspirational aesthetic, but to be able to have accessibility at different economic points, is really important,” Nobbs told CoinDesk.

Digital wearables created on the blockchain give buyers many advantages that physical goods can’t. From the moment an NFT is minted, its entire lifespan can be publicly traced.

For the fashion industry, this solves many of the hurdles involved in creating garments. Zino Haro, CEO of Web3 wearable collective Uni-ke, told CoinDesk that minting garments on a public blockchain ledger fosters better trust in the brand and creates a better customer experience.

“What we ultimately want to do in the supply chain is have transparency of where everything is coming from, which would be good for the end consumer.”

Blockchain transparency also benefits secondary market resale, specifically for luxury goods.

Second-hand designer retailer The Real Real has strict guidelines for identifying counterfeit items before listing them to the public, a process that could likely be automated by blockchain technology.

Vivien Zhang, the founder of Web3 fashion marketplace The Spot Room, supports phygital brands in minting their items on-chain. Through implanting chips in physical items that are redeemable as an NFT, all of the data linked to the asset exists on-chain, making verification easier.

"We incorporate an NFC tag, which holds all the info and certification associated with the physical product, safeguarding the resale value for any item. Not only do we facilitate peer-to-peer transactions but our end-to-end solution also gives royalty to the creators of the products or items," Zhang told CoinDesk.

For designers and creators in digital spaces, the boundaries of what fashion is and who is invited to club continue to grow. Beyond blocky 8-bit creations, the digital fashion landscape is vast and spans platforms and mediums.

In order for digital fashion to permeate throughout the crypto space and beyond, Kaspar aims to onboard as many people as possible by highlighting the many forms and faces of digital fashion.

She told CoinDesk that the majority of investors are looking past this when it comes to digital fashion. “[They’re] not yet seeing the power of ownership, identity and data inside of this new ‘to-earn’ economy that's gonna spur out of digital fashion because they don't quite yet see how it's used.”

“You need more investment, more designers, more people participating in building around the technology so it can really get out there,” added Kaspar.