The Potential of NFT from a Creative Perspective
Disclaimer: UNOPND hosts a monthly seminar to share market insights from various guest and in-house thought leaders. This article is an interpretation of these seminars. The seminar content reflect the the presenters’ opinion only and may not represent UNOPND’s official view.
Our first post is a summary of a session from Kiheon Shin, Creative Director at Hashed. We sincerely thank Kiheon for this precious session. If you‘d like to check out the full version please click the link below.
Let’s dive into the session!
There were 2 remarkable results at the Art Review Power 100 in 2021.
First, ERC-721 won the first prize. Interestingly, it is not a person, but a token standard. As you may know, this standard is used on Ethereum as a protocol for NFTs.
Second, Meta Kovan (purchaser of Beeple’s collection) ranked 42nd in this review. After his purchase, many people started to pay attention to NFTs, and especially to people in the creative space.
According to an article from the Art Review, Beeple started to sell NFTs in December 2020. Then he sold Everydays in March 2021 at Christie’s Auction. It was sold at $67M. (purchased by the aforementioned Meta Kovan)
Before this event, artworks were thought of as something that would lose value once it was copied and distributed. But NFTs changed all that. This auction brought to attention NFTs as an enabler of proof of ownership and possession of the associated data.
1. Creative by Artist
This particular NFT of Beeple is titled Everydays. It was sold to Meta Kovan for $67M. By checking the smart contract of the NFT, one can see its token ID, the wallet address of its owner and the metadata route. With access to the metadata, one can see what is on the blockchain. However, there is also an external reference to access the main storage link.
It’s possible to see the original file in IPFS(Inter Planetary File System) via this link. By entering this route, the main data is accessible even if one is not the buyer. It is always accessible, even possible to copy and paste the artwork, but the ownership and the rights for NFT are solely owned by the holder.
Ever heard of Damien Hirst?
He is an English Artist who became famous for a series of artworks in which dead animals (including a shark, a sheep and a cow) are preserved, sometimes having been dissected, in formaldehyde.
He also created an NFT project, The Currency. There are 10,000 physical artworks. He scanned all of his artworks and digitized them as NFTs.
What he made is pretty interesting. The NFT can be redeemed by a deadline, at which point it the NFT is burnt in exchange for the physical art piece. If unredeemed, the physical art is burnt and only the digital counterpart would remain on the blockchain. Throughout this process, the number of collections is fixed to 10K. All of the selection depends on what one chooses.
Although he is a prestigious artist, he capped his collection at 10K, presumably out of respect to the NFT space tradition familiar to Web3 users.
As seen in this picture, 95% of holders did not redeem their collection. They prefer NFT over the physical artwork. It can be a creative way Damien Hurst was trying to express.
Kiheon states that NFT is not just about storing image or video via blockchain technology, but is creating a whole new experience. It means not only being exposed to the technology itself, but also being a part of the experience that the artist tries to express through metaphors and narratives. And all activities including buying, selling and even transferring, are parts of them. That is, the NFT experience could be a creative one in itself.
When people see Non Fungible Token, they usually focus on “Non Fungible”. But, just as important is the “Token” aspect as well.
2. Creative by Community
First picture’s house is a virtual space of the Bored Apes Yacht Club (most popular NFT project today). Many people in NFT space are willing to buy BAYC even if each NFT’s floor price is quite expensive. (floor price about $175k as of June 2)
Interestingly, holders can do anything such as commercial activities using the IP of their NFT. With such powerful rights given to each holder, there are many community driven projects with this NFT.
Users also getting creative.
For example, “Ape-In” is a hip-hop group produced by Timberland with BAYCs. They generate various contents like animations and concerts based on 3D graphics.
In addition, there is a private space for OGs(only for holders) which incites FOMO for non-holders of a BAYC NFT. They are doing really well by understanding what users want in this space.
In addition to these examples, there are other various activities by holders. One such group signed a contract with Universal Music as a metaverse group. Another one is writing stories for his NFT and also sharing authority of the story to the other BAYC holders. Even famous artists use it in their music videos.
Moreover, many companies also start their own NFT business.
Adidas bought BAYC #8774 used it as a profile picture on Twitter. They made a secondary art using their NFTs. Also, they made a gorgeous video with Gmoney(NFT Influencer), Punks Comic(CryptoPunk’s derived art) and BAYC.
They announced the Adidas metaverse campaign Into The Metaverse and minted a 30K collection which recorded $22M in sales within a few minutes. It may seem like merely a simple PFP project, but they understand the NFT community ecosystem deeply and know their desires and expectations.
In NFT space, there are holders and communities, but we should distinguish the holders from the communities. Apart from community, we need to consider experiences such as brand, fun, beauty, etc.
Wrapping up this session, 3 potential possibilities can be summarized. First, there will be more real-life use cases beyond purchasing and collecting. We call this “utility” and we have to think about how to best provide such utility. Second, connection and diffusion about our experience and possession are going to accelerate. Last, we can be free from the influence of an existing platform, device, or a specific brand to open up new opportunities for diversity.