As I have been exploring the role of NFTs to increase the value and sustainability of art, I hit upon an approach that I’m willing to test.
Initially, I saw the JPEG market as one where scarcity and status drove value; but the actual value would come through memberships in more participatory activities, the current spate of paid memberships. But the more intriguing way by creating an ecosystem of interactive fiction consumers and writers with a pay-to-play and a build-to-earn model.
Then I went back to look at what drives the existing art market. Because the art market is a “consensus marketing machine,” signals around an art and artist determines value in an inefficient and closed market.
From that piece, I looked at a few attributes beyond the more commonly known ones, such as uniqueness and proof of ownership. Those don’t seem to actually add value.
I did read an extensive article which suggested scarcity would be the driver [2] and open the market through fractional ownership. I also read a counter-narrative likening NFTs to MLM![3]
I’m exploring the NFT Studio model, which partners with curated artists to co-create the NFT release. This is a partnership which is less about posting on a marketplace, and more akin to an agent + studio from Hollywood (based on my reading of Ovitz’s biography).
Not enough alpha is being produced just being an exchange. The internet commoditizes distribution and transaction costs. Just because the product is unique, doesn’t add value. Granted, I don’t know enough about those curated marketplaces such as Foundation, SuperRare, and Known Origin.
Curated markets are less free-for-all compared to open marketplaces like Open Seas. They are like active managed funds versus broad index funds
So is there still an opportunity for a tighter collaboration between the artist and a new type of “art dealer” -- one that doesn’t just act as a market making middle-man?
Collaboration Creates a New Kind of Art
New types of collaboration is emerging between artists and brands through representation by traditional agents such as CAA.[4]
This representation, however, continues the intellectual property amplification into different media channels of traditional media. In this case, the character, “Jenkins the Valet,” will find new media opportunities, which could be books, movies, or commercials. CAA will take NFTs to market the same way they take writers or actors.
By representing art on the blockchain, NFTs can imbue the art with technological capabilities which extend the value of the art by assigning it new properties.
The ideal approach is to see the technology and the visual objects as the new artform, itself.
NFTs, in effect, become the media through which audiences and buyers consume, interact with and share the art. Instead of going to a museum or off-line gallery, they can more deeply engage with the art.
The artist, then, needs to collaborate with this new partner, the NFT studio, to not just see NFTs as a way to prove ownership in a new online marketplace. Instead, it’s to envision how audiences interact, thereby adding both artistic meaning and market value to their work.
What are some examples?
Potential Ideas
Permissioned Lineage
A powerful way to expand the way audiences interact with and appreciate are is through “permission lineage”: a more established artist proves, on the blockchain, they have “gifted” a piece of art to an emerging artist.
That emerging artist, in turn, can do a mashup, or an inspired series, an homage, a study, or a response to that art. This permissioned lineage does something not truly possible before: it imbues market value and signal to the emerging artist, while allowing that artist to rift in their own way with their own voice.
It allows collectors to authenticate and, as a result, appreciate the value of the emerging artist; this effectively enables the more established artist to “bootstrap” other artists in the competitive world, in a way, passing on their DNA in a proveable way. It allows emerging artists to explicitly express their influence without appearing to “steal” while claiming their own authentic voice and space.
Peer Support to Build Network Effects
Emerging artists could choose to work with each other instead of with a more established influence.
This “cross-pollination” and referencing can create new consumers and new ideas.
For example, collectors of two affiliated artists could be rewarded with a special airdropped blockchain art which is only available to those who can prove ownership of the two artist’s work.
This exposes audiences to new work, but proves the “affiliation” between the two artists, which creates a greater sense of meaning and in the work. It also creates more value in the artwork by the minting of exclusive airdropped “benefits” for those who purchase the two affiliated work.
Fractional Ownership with On-Chain Participation
There’s also opportunity for artists with installation or street are to expand the set of owners. They could create fractional ownership of official photographs of their installations with the added benefit of allowing owners to mint a photograph of themselves with the art and associating it with a QR code at the site.
As the different owners take photographs of themselves with the artwork and associate this on-chain, the artwork grows in value. Subsequent buyers are willing to pay more because of the social signalling and the ability to participate on-chain with the work of art.
There can be other creating variation of this where participation and fractional ownership creates an on-chain social signal, increasing the value and awareness of the art.
What does it take to explore this design space?
What’s different is the new NFT Studio doesn’t just treat the art on the NFT as a commodity. Exchanges and agents do this by serving as middle-men to other consumers, whether the end-buyer or the media-channel purchasing IP rights.
This approach, however, creates essentially a new type of performance art by merging the blockchain, smart-contracts, and the other token mechanics with the art piece to encourage new forms of appreciation, participation, and ecosystem dynamics.
Some questions that can help artists to work with this new studio would include:
- What does the community of those who appreciate your art do to express this?
- How does your art comment on ways people consume art?
- Does your art explore ways society interacts with information, technology or markets?
- Who are the influencers or artistic comrades that have shaped your art?
- How does space and location impact your art?
- What are ways to encourage collaboration, sharing, and dialogue with others?
We think that the design space between the actual art and the interactions of buyers, curators, and audiences extends far beyond transactional marketplaces and media placement. And see many benefits for the artist both in impact and in the on-going relevance in the market.
- https://tim.fong888.com/the-nft-art-dealer
- https://medium.com/coinmonks/nfts-101-why-nfts-are-a-generational-innovation-4626ae803e3b
- https://every.to/napkin-math/nft-projects-are-just-mlms-for-tech-elites
- https://www.forbes.com/sites/cathyhackl/2021/09/25/caa-signs-jenkins-the-valet-is-this-a-sign-that-hollywood-is-embracing-nfts/?sh=35d3827e3b02