Azuki 'Proof of Skate' Auction Draws $2.5 Million for NFT-Backed Skateboards

NFTs are often thought of as flat images, but a bidding war broke out on Friday over physical skateboards authenticated by an embedded chip.

The auction—hosted by Chiru Labs, creators of the Azuki brand—allowed people to place bids in Ethereum to secure one of eight skateboards, and amassed $2.5 million in ETH. Each of the skateboards is plated in 24 karat gold and weighs 45 pounds, according to Chiru Labs, which recommends that owners not try to ride them.

The highest bidder paid just over $400,000 for one of the skateboards, compared to around $260,000 for the lowest successful bid. Chiru Labs tells Decrypt that there were 145 total bids on the skateboards.

The uniqueness of the skateboards are assured via a physical chip embedded inside of them, which can be scanned by a smartphone to verify ownership—an experience Chiru Labs is calling “scan-to-own.”

The most expensive board went to an NFT collector named “dingaling,” who already has a massive collection of NFTs that includes 70 Azuki avatars, according to LooksRare. After the auction ended, he called the Azuki community “the most degen community” he’s ever seen on Twitter.

If one of the owners ever parted ways with their blinged-out board, Chiru Labs says another person could scan the embedded chip to transfer the ownership to another wallet. The boards represent Chiru Labs’ introduction of a physically backed token or “PBT,” which links a physical item to a digital token on the Ethereum blockchain.

The company said the technology can be used to prove the authenticity of physical goods in a way that leverages blockchain technology. A “PBT” can also be used to keep track of who has owned an item in the past, which could be useful in the world of art for establishing a piece’s provenance.

The Gap Jumps Into NFTs on Tezos—With Physical Apparel Perks

Azuki is a top-of-the-line collection when it comes to NFTs on OpenSea, according to the marketplace’s website, ranked fifth with a cumulative value of 174 ETH or around $228,000, as of this writing. Friday’s auction dwarfed the namesake collection of Chiru Labs in terms of value.

Friday’s auction is not the first time Chiru Labs’ has dabbled in physical goods. Earlier this year, owners of Azuki avatars were airdropped tokens that could be redeemed for physical jackets, with a design that combined American and Japanese street culture.

Tokens being tied to the sale of physical items is not new to the Web3 space. Earlier this year, luxury goods maker Tiffany & Co. released a series of NFTs that came with gem-encrusted pendants made in the image of CryptoPunks. A house in Germany was also auctioned off on OpenSea as an NFT. Companies have also explored the use of NFTs as a way of establishing secure supply chains for physical goods.