NFTs
NFT.NYC Casino Capitalism, Plus, Are NFTs Really Dead? #I heard
From Magic Eden’s degen yacht party to Forbes’ multichain mixer, NFT.NYC offered a spectacle of excess and elitism, and then some in another episode of #hearsay, a weekly gossip column that analyzes crypto’s underbelly.
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In the wild west of cryptocurrencies, trends come and go faster than a junkie in a trap. Just when experts were ready to rule out non-fungible tokens (NFTs) As dead, digital collectibles born, and sometimes burned, on the blockchain may – instead – be experiencing a renaissance.
In 2023, as headlines screamed “NFT Bubble Burst” from the rafters, a split began to emerge in the NFT community – one of which saw the medium slowly begin to separate itself from the message. A change that many argued it was more utility oriented. The promise that blockchain once gave digital artists – royalties ad infinitum – was soon, thanks to Blur, revealed to be a lie.
According to recent data, NFT sales fell last quarter, leading many to proclaim the end of the digital art craze. However, closer inspection reveals a more nuanced reality.
See the recent edition of NFT.NYC (which ended on April 5). Founded in 2018, the event exploded in 2021 in the wake of a massive bull market that saw NFT sales reach $17.6 billion, thanks in part to the confluence of cryptocurrency prices, celebrity endorsements, and the recognition of NFTs as fine Arts. stamped on rubber by major auction houses such as Sotheby’s and Christie’s. Such events paved the way for a meteoric rise in cultural recognition and awareness of NFTs (thanks to Beeple), which once again followed a massive boom/bust cycle that cryptocurrency critics used to paint the entire industry as a giant casino.
In fact, in 2021, with falling cryptocurrency prices and turmoil in financial markets following Russia’s invasion of Ukraine, digital assets also took a major hit. Gone are the days of minting a pixelated punk or a bored monkey on Ethereum and flipping it for 10x or even 100x profit, real-world assets, big brands and e-commerce have emerged. According to industry watchdog NonFungible reportQ3 2022 saw a 77% drop in transaction volume, followed by net losses reaching $450 million year-on-year.
Quarterly NFT Market Report, Q3 2022 – Global Performance | Source: Non-Fungible
However, as of late 2023, the NFT market appears far from dead. On the contrary, more mature. Last week, NFT.NYC co-founder Jodee Rich admitted as much, emphatically stating that “the speculative burn has passed.”
This speculative burn, it should be noted, began in earnest last year when two popular NFT trading platforms, OpenSea and Blur, began what many now see as the ‘race to the bottom’ after Blur offered a market for zero-fee with tools designed to also get rid of royalties for creators. In response, Yuga Labs and Magic Edgen established the Creator’s Alliance, which they argued was a way to enshrine royalty rights, supporting only markets and projects that promised to honor them.
During last week’s NFT.NYC, the new digital divide couldn’t be clearer. The over-the-top jocks in hoodies seem to have been replaced by serious technologists, nerds, and boring conversations about file storage. At the Museum of the Moving Image, Erc Calderon of Art Blocks gave a talk with generative artist Tyler Hobbes, held on the sidelines of NFT.NYC. At the Museum of Modern Art’s sister location, PS1, NFT.storage, which utilizes Filecoin’s decentralized storage and IPFS content addressing, held an event called “The Moment: Art, NFTs and Cultural Preservation,” which brought together representatives from FileCoin and Protocol Labs.
At the Javits Center, the official location of NFT.NYC, the focus seemed to be less on technology or art and more on sales, merchandising and marketing. Pudgy Penguins, the NFT collection that launched a line of dolls at Walmart last year, has since raised $10 million selling these cute digital-turned-physical artifacts.
What’s happening isn’t so much the death of NFTs as it is their rebranding. So are NFTs dead? Far from it. Like a phoenix rising from the ashes, they are undergoing a metamorphosis. What we are witnessing is not the end of NFTs, but rather a recalibration of the market. As investors and collectors sift through the rubble of the recent crisis, they’re sorting the gems from the junk. The froth may have subsided, but the underlying fundamentals remain strong.