NFTs
Smaller crowds and focus on merchandising and AI
When NFT.NYC was created in 2018 and brought together a close-knit community of Web3 nerds. But, in 2021, it exploded into a monstrous convention, with 1,500 speakers and a calendar full of parties that brought together types of art, technology and finance, often for the first time. In this year post-encryption failure edition, which ended on Friday, the energy was quieter and the various factions of Web3 remained isolated. More entrepreneurial-minded Web3 types headed to New York’s Jacob Javits Convention Center, while those invested in NFT art headed to their own venues.
During the convention’s opening speech, NFT.NYC co-founder Jodee Rich acknowledged the new reality, saying simply: “The speculative burn has passed.”
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Actually yes. The halls of the convention center were quiet, crowds were sparse to nonexistent, and a cloud hung over everything. The recurring theme of the process? A pivot to merchandising and attempts to connect NFTs to their tech bubble replacement, artificial intelligence.
But why? Bitcoin has reached a historic record last month for $73,800 and Ethereum, the blockchain on which most NFTs are sold, has traded between $3,000 and $3,900 over the past month (Ether’s all-time high of $4,721 was reached during the 2021 boom). One would think there would be more excitement in the air after more than a year into the so-called crypto winter. These bumps in the market, however, have not brought the NFT prices that stunned the art world and launched a thousand startups in 2021.
“I’ll give you my positive opinion, but the data doesn’t look good,” said David Pakman, managing director at blockchain investment firm CoinFund, during his opening remarks in front of a slide showing NFT trading volume.
Pakman went on to argue — unconvincingly — that while he sees crypto and NFT prices as linked, there is typically a gap of a few months between the two. He then noted that most NFT trading had moved away from OpenSea – the giant NFT trading platform that was once crowned with a valuation of US$13.3 billion—for Blur, a zero-fee marketplace with tools aimed at “mercenary traders,” in Pakman’s words.
Getting rid of royalties for creators, Pakman continued, was “incredibly short-sighted.” One of the most valuable functions provided by NFTs was ensuring that creators received royalties each time their NFT was sold. At the end of 2022, some platforms stopped honoring royalties in order to encourage commercial activityand once a platform did, it became, as Pakman called it, “a race to the bottom.”
The Bored Ape Yacht Club collection on OpenSea displayed on a phone screen and the NFT logo displayed on a screen are seen in this illustrative photo taken in Krakow, Poland on April 19, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images ) NurPhoto via Getty Images
There was good news. In February, Yuga Labs, the parent company of Bored Ape Yacht Club, and crypto wallet Magic Eden launched a new NFT platform to address the royalty issue. The platform, also called Magic Eden, established the Creator’s Covenant, which includes several major NFT projects and companies like Yuga Labs, RTFKT, Pudgy Penguins, and Azuki, which will only support marketplaces that support royalties. It remains to be seen whether this actually solves the problem.
The most exciting development, according to Pakman and other convention attendees: merchandising. Last fall, Pudgy Penguins NFT collection started selling toys based on your NFTs at Walmart. Last month, when Walmart expanded the partnership, the toys generated more than $10 million. Panels throughout the day focused on merchandising, Mattel and sports fans.
Another area of growth, according to Pakman, is AI. “Who got the OpenAI check in the mail?” Pakman rhetorically asked the crowd, referring to the large amount of user-generated content and art used to train these platforms. His solution: mint everything as an NFT in order to create a mechanism by which people could receive dividends when their content was used in AI training datasets.
Although there were no visible art world citizens at the convention center, many flew to New York to reconnect at other events. Eric Calderon, the founder of Art Blocks, and generative artist Tyler Hobbes attended an event Event in partnership with Art Blocks at the Museum of the Moving Image, while recently launching the NFT storage and realized IPFS technology platform a night of conversations at MoMA PS1 Although the convention was a bit demoralizing (but when isn’t it?), the artists, institutional leaders, founders, and developers at the art-focused events seemed well-rested, even zen-like, as they savored the slower, slower pace. focus of this year’s meeting.
“This has been my favorite issue so far,” Josh Yakov, founder of the recently launched digital art podcast ParcPod, told ARTnews at the PS1 event. “It’s more serious. People are here to talk about infrastructure, art, important things.”
The talks at MoMA PS1 addressed the serious issue of building technologies and practices that will preserve NFTs. It was impressive to compare the gender divide at NFT.NYC to the PS1 event. The leaders of the companies that supported the negotiations, including NFT Storage, IPFS, FileCoin and Protocol Labs, were all women. At the Javits Center, it was hard to ignore that typically men seemed to outnumber women by about 20 to 1.
Regardless of where you were this week, the future was on everyone’s mind. At the Javitz Center, speakers and attendees talked about ways to sell NFTs to new audiences. At art-focused events, the conversation revolved around creating a sustainable ecosystem that would allow digital art to be preserved and flourish.
But there are some who take a different approach. Artist Auriea Harvey, however, was simply focused on her own work. At the opening of his exhibition, The Unanswered Question, at the Lower East Side gallery Bitforms, the pioneering net artist, who also has an excellent, can’t-miss exhibition at the Museum of the Moving Image, Harvey seemed oblivious to the potential for a rise in crypto, which has in the past brought rare wealth to digital artists, both high and low.
“[The 2021 bull market] gave everyone an excuse to pay attention. I’ve been here 30 years,” Harvey told ARTnews. “This happens. Institutional support happens, it appears, it disappears. People talk about bull markets, bear markets, well, the same thing with attention, there are cycles. You can’t let that affect you. That too will become stale.”