Crypto glossary
Phygital NFT
A phygital NFT links a digital token to a physical item, such as sneakers, art or luxury goods, to prove authenticity, track ownership or redeem the object.
The word blends physical and digital. Common designs include NFTs that can be burned to claim a physical product, items with embedded NFC chips that can be scanned to verify they match a token, and digital twins that travel with a luxury product through resales. Some projects also give buyers of a physical good a matching digital version for use in games or virtual worlds.
Fashion and luxury brands embraced the model to fight counterfeits and build lasting relationships with customers, using shared blockchain consortia to record provenance. Sneaker drops, wine, watches and fine art have used phygital tokens, and artists have sold physical works whose ownership transfers with an NFT.
The link between token and object is only as strong as the issuer and the physical custody. If the item is lost, damaged or stored by a company that fails, the NFT may be worthless; chips can be removed or cloned; and legal ownership of the physical good may not automatically follow the token. One prominent brand-owned phygital studio was shut down in 2025, leaving holders uncertain about promised items.
Example
A collector buys a pair of limited sneakers with an NFC chip; scanning it with a phone confirms it matches the NFT in their wallet, and when they resell the shoes, they transfer the NFT too.