Throughout modern history, the barriers to entry for artists and collectors in the traditional art market has been extraordinarily high. Exclusive, high profile, and artificially scarce mindsets illusively dominate the incumbent art world. Meanwhile, truly talented artists without connections continually lack exposure while the 0.1% continues to dominate through fame drawn on oftentimes privileged circumstances. Likewise, collectors may only enter particular auctions when their net worth exceeds centralized demands. This has the net effect of excluding quality art created and minimizing the purchasing population which would support artists and spur creativity around the world.
What is needed is an open, decentralized platform with no such barriers to entry where buyers and artists from around the world can trade freely without relying on an auction house as a middleman.
The advent of non-fungible tokens, or NFTs, has arrived with the promise of putting power back in the hands of artists – allowing them to gain control over their work and democratize access to a global marketplace without middlemen. Taking up more than its fair share of column inches, the NFT offerings of digital artists and musicians have transacted at eye-watering prices, turning the crypto-skeptic into the crypto-curious, consequently adding more gas for the NFT bull market.
The defining genius of all successful cryptocurrencies, tokens, and Web 3.0 applications is that they offer solutions to real-world problems, whether that be disintermediation, a profit incentive, or increased access. NFTs are a perfect solution for artists and creators disillusioned by the high commission and marketing costs of traditional agencies, auction houses, and the impossibly high barriers to entry set by traditional gatekeepers.
A typical NFT marketplace takes a fraction of the commission of traditional auction houses. In exchange, the cost and burden of the marketing is transferred to the artist/creator. On OpenSea, for example, with its hands-off marketing and zero review process, enables a low barrier to entry. The commission is as low as 2.5%. Portion’s platform enables artists to keep up to 100% of the proceeds from their sales while monetizing exclusive curated NFT drops and DeFi integrations with the Portion token ($PRT).
Despite the innovation and disruption brought on by the popularity of NFTs, it is important to remain cognizant of the ways in which behaviors and practices from the traditional art world might be seeping into this new paradigm.
It is difficult to miss the irony that the most expensive NFT, Beeple's 'The First 5000 Days,' was sold via Christie’s Auction House. Christie’s is a household name in the traditional art space and the auction was held in collaboration with MakersPlace, but there is no doubt that the latter took a backseat to Christie's in press releases.
These old-world auction houses, still accepting fiat currency for the bids on auctions of NFTs, continue to take up to 40% in fees as opposed to those as low as 0-2.5% on NFT platforms (Portion, Opensea respectively). It is also worth noting that while bids are accepted in cryptocurrency for the auction of Beeple's 'The First 5000 Days,' the buyer's premium of $9 million was specified to be in fiat. The $9 million premium set on the closing price of $60 million for the winning bid places Christie's fees at 15%.
MakersPlace, the NFT platform collaborating with Christie's on Beeple's record-breaking auction, also applied a 15% commission, this time to be paid by the artist. The same could be said of SuperRare. Along with the relatively high fees (15%), there is also a long artist review process, which together replicates the barriers of entry of traditional high-end auction houses.
Just like the art dealers who function as tastemakers in the traditional art world, new equivalents have been popping up in the NFT world. Pablo Rodriguez-Fraile, a digital art collector, flipped "Crossroad" (a 10-second video NFT featuring Trump sprawled on the ground) for $6.6 million. This is a piece he acquired for $66,000 in October 2020, translating into a 100x gain in 5 months. Rodriguez-Fraile is also the co-founder of The Museum of Crypto Art: an immersive virtual reality museum billed as 'Metaverse's finest crypto art museum.’
Then there's Metakovan, the owner of the most expensive NFT which sold for $69.3M. He is behind Singapore-based Metapurse, a crypto-based investment firm with a mission to “democratize access and ownership to artwork.” Metakovan has funded the Metapalooza event featuring music by 3Lau, as well as offering scholarships for artists and fellowships for 'storytellers.’
The hierarchy in the NFT world has formed very quickly and as power centralizes (and concentrates) in the hands of the few, the trends on what sells (and what doesn't) will likely be defined by these new tastemakers.
NFTs Claim on Democratizing Access
It’s difficult to argue against the fact that the biggest beneficiaries of the NFT scene have been largely white and male; digital artist Beeple’s ‘The First 5000 Days’ sold for $69 million and is the most expensive NFT sold under auction. DJ and producer 3Lau, whose involvement with cryptocurrency goes back to 2014 when he first met the Winklevoss twins at a spring break gig, scored over $11 million in a high profile sale of the world’s first NFT album. Dylan Field, CEO of a unicorn, is well-known for selling his CryptoPunk for more than $7 million.
The Other Side of the (Crypto) Coin
On the other hand, however, is the fact that the pseudonymous Metakovan and purchaser of Beeple’s $69 million NFT has revealed himself to be Vignesh Sundaresan. Two days after winning the auction, he cited from the classic Tamil text Tirukkural in a Clubhouse chat. Metakovan, whose name translates into ‘King (of the metaverse)’ in Tamil, rationalized his decision to reveal his identity in this way: “The point was to show Indians and people of color that they too could be patrons, that crypto was an equalizing power between the West and the Rest, and that the global south was rising.”
As opposed to the traditional art world, the artists that make up the elite of the NFT world are markedly more diverse in their racial, gender, and sexual orientation. Murat Pak, touted as the Picasso of the NFT art world, whose works have been auctioned by Sotheby's, is Turkish. Fewocious, whose works are so highly in demand that the aggressive bidding it generated crashed Christie's website, is transgender.
Then there are the artists in other parts of the world who now have access to a global audience, in line with NFTs promise of democratizing access.
Osinachi, a Nigerian artist creating artwork using Microsoft Word had a dream: that of being exhibited in a gallery. None of the galleries he contacted ever responded but his discovery of NFTs in 2017 led him to be featured in Portion's art auction at the Ethereal Summit in New York in 2018 before being contacted by a contemporary art gallery in Switzerland in 2019. Today, each of his artwork easily fetches a five-figure sum.
There is also the idealism of the early crypto days still present within the NFT space with efforts to come up with solutions to subvert traditional power forms using NFT as a medium.
The proceeds from the first NFT sale from Pussy Riot, a Russian feminist protest punk rock group as famous for its protest art as it is for its music, will go towards a clandestine women's shelter.
2020's 'Best NFT Award' went to Micah Johnson, sä-v(ə-)rən-tē, a dynamic NFT that allows yearly bitcoin contributions (on the boys' birthdays) to a digital wallet that would be given to the pair of seven-year-old boys on their 18th birthday. The artwork highlights the self-limiting beliefs inculcated by the black community and seeks public participation to destroy it.
Black Eyed Peas’ Apl.de.Ap showcased the burgeoning Pinoy digital design scene by highlighting how NFT technology can liberate Pinoy artists. A portion of the proceeds from the NFT sale on Portion went to the First Mint Fund, a South-East Asian crypto fund that pays the gas fees for South-East Asian artists looking to mint their first NFT. Another portion went to a scholarship program that enables creatives to earn a business certificate at Thames International business school in Manila.
As NFTs become increasingly mainstream, traditional artists are joining the space alongside underrepresented voices that, prior to the advent of NFTs, never had the tools to sell their art or unique assets. In this latter category is perhaps the real NFT revolution. It is not an art revolution. It is a revolution in digital ownership that gives artists and others the means through which to bypass traditional gatekeepers to buy, sell, or share anything in which both parties see value.
Looking Forward: Empowering the many and not the few
NFTs are fundamentally changing the economics of the internet. However, much like the internet and Web 2.0 technology – blockchain, Web 3.0, and NFTs are still far from globally accessible. Much has been written about the “digital divide,” or the differential access and ability to use information and communications technologies and the socioeconomic and political inequalities that result. The divide is already overwhelmingly wide in every imaginable way, from network access to control of user data/assets to the immense wealth held by centralized corporations. This is certainly the case in the blockchain ecosystem as well: Around 2% of network entities control 71.5% of all Bitcoin. Ethereum whales (holding > 10,000 ETH), control approximately 70% of the total supply of ETH in existence. Even if these statistics are exaggerated, they suggest significant centralization of wealth and power. This won’t come as a surprise to most of us, and thankfully there are thousands of people in the crypto ecosystem working to correct the imbalance and level the playing field.
The question is: Can we do it fast enough?
As NFT use cases expand and become increasingly adopted across the globe, will they remain a tool primarily for wealthy individuals with privileged access to technology, developed along the same old patterns of inaccessibility and exclusion? Will most of the value in tokens and cryptocurrencies still be concentrated amongst a concentrated group of individuals? Will we have shared its possibilities with local communities across the world so they can benefit from this new creative economy in their own contexts? Will we have made NFTs accessible to the masses for socialization and collaboration and opened up new pathways for creativity to spawn?
As Italian Marxist philosopher Gramsci once aptly stated: “Cultural Hegemony is the idea that the dominant ideology of society – the beliefs, explanations, perceptions, values, and morals-reflects that of the ruling class. The dominant ideology justifies the social, political, and economic status quo as natural, inevitable, perpetual and beneficial for everyone, rather than as artificial social constructs that benefit only the ruling class.”
NFTs, that cross-section where art and, by extension, culture exists within the crypto space, exist today as the most prominent battlefield where efforts to include the ‘global south’ and the underrepresented are threatened by the infiltration of old-world institutions and elements.
It’s the canary in the mine, if you will, to see where the crypto space is headed.
Written by Hajar Ali | Guest Writer
Check out Hajar's latest NFT drop, a collaboration with pioneering Iranian street artist A1One featuring deserts and desertification, the Quran and Rumi, Lovecraft and graffiti.