Just weeks before Christmas, with the restaurant industry reeling again from the omicron variant, chef Tom Colicchio was tweeting about penetrating the metaverse. In a series of tweets, he announced CHFTY Pizzas, a new NFT (non-fungible token) venture with Top Chef alum Spike Mendelsohn. The company’s website promises that owners of the NFTs — a “minting,” or release, of 8,888 unique pizza designs onto secure digital tokens — will enjoy “one-of-a-kind physical and virtual experiences” and “future integration into the expanding metaverse.” Colicchio’s pies are still in the virtual oven, but according to CHFTY’s Discord channel, a pre-sale will be offered to its “Slicelist” members on March 23 and to the public shortly thereafter with an initial supply of 2,777 NFTs priced at .07 ethereum each (at publication time, the equivalent of around $200). On paper, the total proceeds from these sales would surpass a half million dollars, which, any way you slice it, is a lot of extra cheese.

On a basic level, NFTs are a record on the blockchain, the rapidly expanding web of decentralized digital ledgers where cryptocurrency transactions are recorded. Each record is an irreplicable digital receipt that can be issued for almost anything. And in recent months, non-fungible tokens have emerged as a new way to define ownership in a digital world — buyers have been snapping up NFTs of everything from specific clips of NBA basketball dunks to silly renderings of bored apes. In simple terms, an NFT signifies that its holder has exclusive ownership of something in the virtual world — a digital image to place in their Twitter avatars, for example. (In this case, Colicchio’s pizza designs are like limited-edition digital trading cards where no two cards are exactly the same.)

For the creators, the current value proposition of NFTs is that they are engineered with “smart contracts,” meaning that they’re coded with built-in terms and conditions that can generate commissions on secondary sales. So if someone buys and then resells an NFT you made, you would receive a cut each time it changes hands. This is partly why NFTs were originally created — to give artists more financial control over their work and ensure that they would benefit from the resale value of their art.

Despite these earnest intentions, NFTs have morphed into speculative assets fueled by fame and FOMO, and as with most baffling trends, celebrities like Gwyneth Paltrow, Justin Bieber, Reese Witherspoon, and Kevin Hart are cashing in. Amanda Mull wrote recently for The Atlantic about the embarrassing spectacle of Paris Hilton and Jimmy Fallon “uninterestedly cooing” about their Bored Ape NFTs on Fallon’s late-night talk show. “With NFTs,” Mull writes, “America may have reached the logical extreme of celebrity endorsements.”

The relationship between restaurants and celebrities has always been symbiotic, so it’s unsurprising to see chefs join the NFT circus. When food writer Geraldine DeRuiter’s recent piece describing her tragicomic experience in the Michelin-starred Bros’ Restaurant in Lecce went viral, an image of one of the dishes she panned — a plaster mold of the chef’s mouth filled with edible foam dripping from its lips — was shared millions of times. Soon afterward, the restaurant’s owners announced plans to turn the now-iconic image into an NFT. Bros’ chef Floriano Pellegrino told the New York Times that he saw the NFT sale as “a big opportunity” from all the publicity generated from DeRuiter’s review. The image is still widely available online, so it’s unclear, besides the obvious PR grab, why there’s a need to authenticate a digital version of it.

But if foodies are willing to line up for hours to buy a Cronut, some creators argue, why wouldn’t they get in line for a limited-edition NFT of one? The psychological impetus for wanting to acquire a scarce NFT isn’t all that different from the obsession with “scoring a rez” from a restaurant that’s impossible to get into. A hard-to-get reservation is simply a record for access to a table, and getting tables at in-demand restaurants has become a valuable commodity, so much so that finance bros recently tried to create a secondary market for them.

And many restaurant owners and chefs, including Colicchio, argue there are use cases for NFTs that transcend their collectibility. Late last year, David Rodolitz (a co-founder of the Empellón Group in New York City), Gary Vaynerchuk (the digital media mogul and early NFT evangelist), and chef Josh Capon (of Lure Fishbar) announced they were creating Flyfish Club, “the world’s first NFT restaurant.” According to its press release, purchasing a Flyfish Club NFT grants holders “unlimited access to a private dining room that will span 10,000+ square feet in an iconic, New York City location.” Plans include a cocktail lounge, fine dining restaurant, intimate omakase room, and outdoor space. NFT holders earn exclusive access to the space without monthly or annual dues; any food or beverage tabs will still need to be paid out of pocket. The Flyfish Club owners have planned a calendar of exclusive virtual and in-person events for NFT holders in the coming year, but have yet to secure a physical space.

“By leveraging NFT, we’re able to authenticate ownership of the membership,” Rodolitz says. “So it truly becomes something that’s owned by the token holder — there’s no ongoing fees and no yearly initiation.” To the founders, this transforms private membership into an asset that can be resold by its owner. “As the token holder you can sell it, you can use it, you can lease it, or you can monetize it over time. It creates a different dynamic between us and the token holders.”

Attaching resale value to the membership, Rodolitz argues, aligns member and owner financial interests: Everyone wants to see the club succeed since token holders should want their NFTs to appreciate in value. Flyfish, of course, has multiple opportunities to make money off each token purchase: It profits from initial sales, takes a fee on secondary sales, and charges members for dining in the club, all while engineering the scarcity of its NFTs as a way of sustaining demand. Nonetheless, Rodolitz and his partners believe there’s value in offering membership as a one-time purchase rather than a subscription.

But a restaurant staying open for an extended period of time is not a guarantee, even in non-pandemic times. For Flyfish Club, failure might translate into several thousand worthless JPEGs of cute tropical fish and sushi. But the NFT trend means people are still buying: Flyfish Club won’t officially launch until 2023, but its initial tranches of membership NFTs, capped at 3,000 total, have already sold out. Prospective buyers will need to buy them on OpenSea, a digital marketplace for NFTs, for an average of 4 ethereum, a popular but volatile cryptocurrency. This would value Flyfish Club tokens at above $11,000 each (based on ethereum’s current value). Special tokens that grant holders access to the Flyfish Club Omakase Room are selling for over twice that amount. “Imagine if people owned their tables at Rao’s from 100 years ago,” Rodolitz said. “Imagine if someone could actually sell that? What would that be worth? That’s what we’re doing.”

Beyond the hype and opportunism, however, many hospitality professionals see NFTs as an opportunity to build brand awareness. Andrew Friedman launched his Industry Spirits brand in 2019 and recently released a limited-edition NFT bottling of its American-made vodka and gin. Friedman partnered with Brian Wells, a Seattle photographer and cafe owner, to release a series of 10 bottles with custom labels, sold as NFTs: In this case, buyers own both the digital art and the physical bottle. Friedman admits the NFT market is oversaturated, but he cites Fernet Branca Challenge coins — which have become a currency of sorts within the bar community — as a real-world equivalent of what NFTs can potentially become. “Industry people would go to Fernet events just so they could get the new Fernet coin. It’s an identity issue, and it will eventually be the same with NFTs.”

Ruth McCartney, a digital media entrepreneur, and David Skinner, the chef of the 12-seat restaurant Eculent outside Houston, created Gourmet NFT to take chefs “from the butcher block to the blockchain” by offering them a place to sell individual recipes directly to consumers. “I’ve always thought it was terribly unfair that chefs don’t get royalties and residuals unless they go through all the trouble of writing a cookbook,” McCartney says, “which most chefs don’t have the resources or the time to do… Most chefs that produce cookbooks make very little [money] from it, so it’s also a great way to support your favorite chefs.”

Skinner sees NFT recipes as the virtual version of his grandmother’s recipe box filled with soiled index cards, except here the recipes live in a digital wallet. “The ability to create a bespoke, custom cookbook that you own makes it different from buying an eBook, which isn’t curated for you,” Skinner argues. McCartney refers to their product as a “fractional cookbook.” Chefs have total control over how many NFT recipes they mint, and the data is encrypted on secure links that can’t be accessed by anyone without verified credentials.

Protecting a chef’s intellectual property is a thorny issue. It’s unclear how Gourmet NFT and other companies can authenticate the rightful owners before recipes are minted and ensure the proceeds go into the right pockets. Most recipes can’t legally be copywritten, although some exceptions exist when cooking instructions are accompanied by other content, like lengthy personal narratives, that make them unique. In the case of NFT recipes, offering them as a “package” that includes one-of-a-kind digital art and curated experiences may legitimize the recipe owner’s claim, but it’s too early to know if any of this will pass muster. It’s worth noting that owning an NFT of anything is not a copyright on the content itself; it is merely proof of ownership in the digital realm. As with cryptocurrencies, early investors are banking on the fact that digital properties will be a much more valuable commodity in the future.

Many bar owners are drawn toward NFTs as a way to offer their clientele new products and experiences built around cocktails. Adam Handling’s Eve Bar in Covent Garden has announced plans to release “London’s first NFT Cocktail Menu Collection,” featuring 13 NFTs inspired by their signature cocktails that will include digital recipe cards, in-person or virtual classes, and an undisclosed amount of complimentary cocktails at the bar. “It’s a new frontier, and there’s a lot to test and learn,” Handling says. “But there are many credible drink enthusiasts and experts who want to do something in this space. People on the other side of the world can now not only own a part of what we do, but it incentivizes them to actively join us on our brand journey.”

Colicchio’s amorous tweets about NFTs suggest that he also sees them as a way for food lovers and chefs to bond, virtually, over their shared love of a great slice. “We are building the strongest and largest foodie community in Web3,” Colicchio tweeted in late January. Apps like Discord and Clubhouse have already become popular forums for NFT enthusiasts to exchange information on the latest trends. CHFTY Pizzas recently hosted a “Top CHFTY” cook-off on its Discord channel, inviting followers to demonstrate their pizza-making skills. The company also plans to partner with Kimbal Musk’s nonprofit climate advocacy group, Big Green DAO (decentralized autonomous organization), on philanthropic initiatives to fight climate change and food insecurity.

“In the long run, I think the utility of NFTs will definitely matter more than collectability,” says Supreet Raju, co-founder of OneRare, an NFT-based “Foodverse” which launches this month as a metaverse-based game using a native cryptocurrency called $ORARE. In the game, players use their bankroll to acquire NFTs of popular ingredients that they can cook in a virtual kitchen: Users will be able to combine ingredients they’ve collected in their “pantries” to unlock NFTs of virtual dishes that are redeemable for exclusive events like online cooking classes with partner chefs from around the world. According to Raju, OneRare is less interested in the investability of NFTs and more in how exchanging them can facilitate more virtual and real-world connections. “Not everybody has the capability to create a collectible and cause demand for it,” Raju says. “I can see that already building up [among early crypto adopters], where people are beginning to draw up use cases for NFT — they act as access tokens, concert tickets, or entry to a special club.”

“Some chefs see NFTs as a way to celebrate their culinary journeys,” Raju says of their growing appeal. “It gives them more of an ability to reach global audiences and they can use it to create social impact.” But more importantly, she believes, the isolation of the past two years has taught us how important it is to share experiences, even when virtual spaces are the only option. “If people are stuck in different places, as we have been during the pandemic, we could have a coffee date where I can use an NFT to order us both coffee and a bagel and we can be in a virtual setting doing this together.” While it’s still difficult to gauge how NFTs will impact the food and beverage industry going forward, first movers like Raju hope to find success by staying ahead of the curve. For the rest of us, playing with imaginary food makes the whole NFT game extremely confusing.

Adam Reiner is the founder and executive editor of the Restaurant Manifesto. He’s written about food and restaurants for Food & Wine, Taste, Plate Magazine, and the Counter.