NFTs & Art: The Biggest Misunderstanding of 2021
Or why the art and NFT markets still have not found a way to understand and work together, while most other creative industries figured it out.
The original version of the article was published in French in Le Quotidien de l’Art >
Alex Katz’s dye cuts at Ink Miami Art Fair
Wednesday, December 1, 2021, 11am: The Art Basel Miami Beach art fair opens its doors and fills up slowly. Two bored gallery owners quietly discuss the issue of NFTs:
Gallerist 1: "Do you offer them to your artists?"
Gallerist 2: "No, of course not. I have a reputation to keep, and can you imagine if the whole thing falls apart?..."
Gallerist 1: "Yes, you're right, neither am I."
Looking around I don’t actually notice any obvious NTFs for sale, except for the somewhat hidden half of the Nagel Draxler gallery stand dedicated to NFTs.
Kevin Abosch’s Sun Signals at Nagel Draxler gallery booth
How did we reach such a level of mistrust between these two worlds since the notorious sale of Beeple's work for $69 million at Christie's New York last March, that revealed NFTs to the world?
The answer is simple: because of a misunderstanding. After this record art sale that crowned Beeple as one of the three most expensive living artists in the world and a few other crypto art sales at Sotheby's and other auction houses, the press mostly covered NFT collectible projects. These "drops" are usually series of 10,000 NFTs (following the CryptoPunks model), and each unit is generated at minting as a combination of a finite number of elements such as skin, hair, nose, accessories, etc. The buyer randomly obtains a more or less rare composition, which is more or less valuable: the perfect scenario for a fun speculation, vaguely reminiscent of the candy machines at carnivals.
When I told a gallerist in Miami that art only made up 9% of the total volume of NFT transactions while collectibles accounted for 76% (Ethereum data from nonfungible.com from Q3 2021), she was shocked, as she always thought that art, the first application of NFTs revealed to the general public, could only be its most widespread application. More than artworks, these collectibles are the new version of the "Art Basel VIP Card" that gives access to a private club with secret parties and privileged sales. But auction houses are blurring the lines by selling CryptoPunks, Bored Apes, a Squiggle, a Mooncat, and more...
How to help the worlds of art and NFTs understand each other in 2022?
2021 has shown us the possibility of a better art world supported by Web3-related solutions and not just a mere transposition of the current art market onto the blockchain. But there are still a lot of unanswered questions and risks associated with this new format.
Many are indeed predicting the imminent arrival of a crypto winter in reference to the famous replica of the series, Game of Thrones, "winter is coming". This period will see speculators leave for other, more lucrative investments than collectible projects with no utility, which should help the actors of the art world see a little clearer and study the opportunities ahead, without the background noise.
Tezos space at Art Basel Miami Beach for “Human + Machine” educational series. Replays
For artists, one of the greatest transfers of value in history continues and their renewed creativity and enthusiasm for these new concepts is palpable, even if the majority of them will need help to launch their careers in NFTs and navigate the pitfalls.
The galleries, still in wait-and-see mode, see their artists leave to experiment with NFTs on their own, due to the lack of support they can offer. They will have to look at how to better support them as their role in the primary NFT market is essential.
Museums and cultural institutions play an essential role in legitimizing the format and publishing research around NFTs. In addition, the extension of their collection outreach beyond their walls to the metaverse will attract a young crypto-audience that is already showing interest to learn and live with art.
For communities, more ways to self-manage and have an impact are coming with DAOs (Decentralized Autonomous Organizations). Let’s mention HerStoryDAO, a group of female artists of color who got organized to acquire culturally important works of female artists of color and amplify their message through the DAO community.
The acronym NFT was declared word of the year in 2021 by the Collins dictionary. For 2022, I put my vote on the DAO acronym. But it’s probably nothing…
From Art BZL conference in Miami