A socks-backed non-fungible token, SOCKS was launched as an experiment by decentralized exchange Uniswap in 2019. This week, the NFTs briefly reached a price of more than $92,000 before returning to the current and much more reasonable $63,060.97 at press time.
According to crypto asset market data website CoinGecko, the value of the NFT SOCKS
tulips tokens—each backed by a pair of Uniswap-branded socks that can be redeemed for the token—reached an all-time high of $92,763.27 on Feb. 16. At their highest, the 500 SOCKS had a market cap of about $28 million.
Crypto asset investment firm CoinShares CSO Meltem Demirors jokingly commented in a tweet on the day before: “500 pairs of digital socks have a market cap of $20 million. memes are the new money.”
SOCKS started trading on unisocks.exchange at a price of $12 in late 2019. The platform shows that 16 tokens are still available for purchase and that the current price is a little short of $64,000—over 48% down from the all-time high price. Furthermore, of the 500 existing SOCKS, 185 have been redeemed for their physical counterpart, burning the tokens. Those are probably the most expensive socks that the world has ever seen.
[After extensive research (we went to the second page after Googling “most expensive socks”) all we could come up with was a limited edition vicuña wool sock from 2013 that reportedly went for more than $1,100 a pair, wooden presentation box included. But a GQ article from a week before this past Christmas pointed us to a far more reasonable $245 cashmere blend pair. –Ed.]
The appreciation shown by Uniswap’s SOCKS can in some part be attributed to the bonding curve which determines that each sock acquired from the exchange increases the prices at which the next ones will be offered. Prediction market Polymarket has currently shows more than $23,000 in trade volume on the question, “Will the price of Unisocks be above $100,000 on Feb. 28, 2021?”
The success of the Unisocks experiment is not the only reason why Uniswap made the news this week. On Feb. 15 the decentralized finance (DeFi) protocol’s creator Hayden Adams tweeted:
“Uniswap just became the first decentralized trading platform to process over $100b in volume – an exciting milestone for DeFi.”
While Uniswap has grown quite fast since its inception, it is not without its problems. As Modern Consensus reported in late September 2020, cryptocurrency research firm Glassnode suggested that crypto exchange Binance could hijack control of the protocol because of the way its UNI governance token was distributed.