Nfts
Smaller crowds and a focus on merchandising and AI
When NFT.NYC was created in 2018, it brought together a tight-knit community of Web3 nerds. But, in 2021, it has transformed into a monster convention, with 1,500 speakers and a busy schedule of evenings bringing together players from art, technology and finance, often for the first time. To this year post-crypto crash edition, which ended on Friday, the energy was more muted and the different factions of Web3 kept to themselves. The more entrepreneurial 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 keynote address, Jodee Rich, co-founder of NFT.NYC, acknowledged the new reality by simply stating, “The speculative burn is over.”
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Indeed, it is. The halls of the convention center were quiet, the crowds were small, if any, and a veil hung over everything. The recurring theme of the debates? A pivot of merchandising and attempts to hook NFTs onto its tech hype bubble replacement, artificial intelligence.
But why? Bitcoin has reached a an absolute record last month at $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 hit during the boom of 2021). You’d think there would be more excitement in the air after more than a year in what’s known as crypto winter. These market shocks, however, did not cause the flagship 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,” David Pakman, chief executive of blockchain investment firm CoinFund, said during his keynote speech in front of a slide showing NFT trading volume .
Pakman went on to argue – somewhat unconvincingly – that while he views the prices of cryptocurrencies and NFTs as related, there is typically a lag of a few months between the two. He then noted that the majority of NFT trading had moved from OpenSea, the giant NFT trading platform that was once crowned with a valuation of $13.3 billion— at Blur, a fee-free 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 NFTs provided was ensuring that creators received royalties every time their NFT was sold. At the end of 2022, some platforms stopped honoring royalties 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 in OpenSea displayed on a phone screen and the NFT logo displayed on a screen are seen in this illustration photo taken in Krakow, Poland on April 19, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images) NurPhoto via Getty Images Images
There was good news. In February, Bored Ape Yacht Club parent company Yuga Labs and crypto wallet Magic Eden launched a new NFT platform to address the royalty issue. The platform, also called Magic Eden, created the Alliance of Creators, which includes a number of high-profile NFT projects and companies like Yuga Labs, RTFKT, Pudgy Penguins, and Azuki, which will only support marketplaces that support royalties. Whether this will actually solve the problem remains to be seen.
The most exciting development, according to Pakman and others at the convention: merchandising. Last fall, the Pudgy Penguins NFT collection started selling toys based on its NFTs at Walmart. Last month, when Walmart expanded its partnership, the toys had generated more than $10 million. Throughout the day, panels focused on merchandising, Mattel and sports fans.
Another area of growth, according to Pakman, is AI. “Who received their check in the mail from OpenAI? » » Pakman asked the crowd rhetorically, referring to the large amounts of user-generated content and art used to form such platforms. His solution: create everything in NFTs, to create a mechanism by which people could receive dividends when their content is used in AI training datasets.
Although there were no visible art world citizens at the convention center, many traveled to New York to reconnect with other events. Art Blocks founder Eric Calderon and generative artist Tyler Hobbes attended a Event in partnership with Art Blocks at the Museum of the Moving Image, while the recently launched NFT technology and storage platform IPFS took place a night of discussions at MoMA PS1 While the convention was a little demoralizing (but when aren’t they?), the artists, institutional leaders, founders, and developers at the art-focused events seemed well-rested, even zen, as they relished the slower, more focused pace of this year’s gathering.
“This has been my favorite edition 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, about art, about important things.
Discussions at MoMA PS1 addressed the serious issue of creating technologies and practices that will preserve NFTs. It was striking to compare the men’s-women’s division on NFT.NYC to the PS1 event. The executives 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 in general, men seemed to outnumber women about 20 to one.
No matter where you were this week, the future was on everyone’s mind. At the Javitz Center, panelists and attendees discussed 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 some take a different approach. Artist Auriea Harvey, however, was simply focusing on her own work. At the opening of her exhibition The Unanswered Question at Bitforms gallery on the Lower East Side, the pioneering Internet artist, who also has an excellent, not-to-be-missed exhibition at the Museum of the Moving Image, Harvey seemed disturbed by the potential of he rise of cryptography, which has in the past brought rare wealth to digital artists, both high and low level.
“[The 2021 bull market] gave everyone an excuse to be careful. I’ve been here 30 years,” Harvey told ARTnews. “It happens. Institutional support exists, it appears, it disappears. People talk about bull markets, bear markets, well, the same thing mind you, there are cycles. You can’t let that get to you. This too will be obsolete.