Although they have been roaming around for over five years, NFTs (Non-Fungible Token) entered our lives in 2021. Within the second year of the pandemic, artists, illustrators, photographers, creators and even TikTokers have been in search of the next best thing. The next boom however, does not only consist of art alone. There is more than one use of NFTs. For now, the most prominent uses are art, music, gaming, accessibility utilities, and new forms of digital identification. The rise of the NFTs have also expanded the need to do something valuable with the gains from the crypto currencies and it single-handedly broke the hegemony of the crypto world, and separated finance and technology from art and aesthetics.
THE NEED FOR A MIDDLEMAN
In the most conventional way, artists have been working with galleries, which set the rules of the industry and the art world. Due to the PR and marketing needs of the creators, and the obligation to show their work to collectors and art enthusiasts, most have to play by the rules. But, there is an exception to this order. Via NFT platforms such as OpenSea, SuperRare, Foundation, Hic et Nunc and Rarible, creators have found a way to cut out the middleman. But this creates a paradox. Although the gallery-artist relationship is a tricky one, it serves a wider purpose than sales alone. It creates stability, a point of contact for the collectors. It constructs a physical connection between the artist, the buyer, and the artwork. However, the industry has not succeeded in being transparent. Tweaking sales prices, commissions, payment schedules, and most importantly the ownership and the protection of the artwork is harder to keep track of. NFT platforms offer a solution to this problem by the use of block chain technology, by being completely transparent in all transactions while also protecting the artists’ hard work, by providing royalties on secondary sales, while charging less commission from the initial sale. Here, another question arises: Do we really need galleries?
Besides the conventional arts’ sudden move to digital, there are other forms of “jpegs” that take notice. Apes, Clones, Bears, Cats, Aliens have surfaced on platforms such as Twitter and Discord, with sales records and unimaginable fees. These sorts of NFTs fall into multiple categories. They offer utilities, gaming, merchandising but most importantly a community, a belonging that is represented via a pfp a.k.a. profile picture. Whatever interest it was that led them to their entry, the early adopters who got into the NFTs earlier than all are Gen Z. Even Alphas rise to the occasion with their own language of WAGMI (We Are All Gonna Make It), DYOR, (Do Your Own Research), LFG, (Let’s Fucking Go) and many more that millennials need a whole other dictionary for. Becoming a part of this community is easy, but it’s extremely difficult to keep up with. Time is of the essence as data is fast. The lifespan of the sale of a project from beginning to end is more or less 3 weeks; even as short as 4 days if the project of the moment is Adidas x Prada for instance. With all projects sold out from all the hype even at this stage raises the question: What makes these 300 dpi jpegs so valuable? Why is everyone so excited and why did Justin Bieber pay 500 ETH (1.29M $ at the time of purchase) for an NFT?
Hype. Hype is the ultimate reality of this world. With traditional influencers, celebrities, crypto personalities and whales (largest NFT asset holders) backing up certain projects to create FOMO. With the sense of security provided by this marketing, NFT enthusiasts buy into the projects and help them sell out in minutes. Circling back to where we left off earlier, as NFT projects are similar to a new and updated version of crowdfunding, the project owners need to first sell their ideas and dreams without a tangible product. This consists of community management, IRL advertising, flash giveaways, collabs with other international projects, giving whitelists, a restless period of sharing content and storytelling. As it’s an uncharted territory, with a lot of unknowns, the whole process is a learning experience by itself. Although the roadmap and the community building is very important to an NFT project, it still does not explain why the buyers are dropping their crypto currencies and rushing to be the first in line. The financial aspects of NFTs are growing bigger each day. It took Bored Ape Yacht Club 12 hours to sell a 10,000 piece with a price of 0.08 ether around $190 in April 2021. The project’s value has risen 133650% since the start of the year with a floor price of 107.68 ether today. This aspiration is helping new potential projects and investors as they mint multiple from each project with the hope of flipping to make a profit.
Through the opportunities that Web 3.0 is building, there seems to be an article, a video, a vlog, a YouTube on how to make it in NFTs in under a week and “become a millionaire” on every corner. Some, like Pak, Shepard Fairey, Mad Dog Jones have managed to invent a new structure, a new digital persona to go around the system, and demobilise the middleman in order to fit their own idea of the new order. Nonetheless, it turns out if you are not a marketing guru yourself, if you don’t know the basic mechanism of sales and have an extended understanding of block chain and developing, it’s not as easy as promised. Therefore, whether it is an artist, a project, a utility or gaming, NFTs still rely on marketing and promotion. The approach towards this, however, should definitely avoid conventional and suggest a new understanding.
“MILLENNIALS MAY NEED A WHOLE OTHER DICTIONARY TO UNDERSTAND WHAT’S GOING ON. BECOMING A PART OF THIS COMMUNITY IS EASY, BUT IT’S EXTREMELY DIFFICULT TO
KEEP UP WITH IT.”