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Ultimate Resource On Non-Fungible Tokens

Non-Fungible Tokens And The Future of Commerce. Ultimate Resource On Non-Fungible Tokens

Non-Fungible Tokens And The Future of Commerce. Ultimate Resource On Non-Fungible Tokens
The unlimited potential of blockchain technology is unleashed when used in conjunction with nonfungible tokens.

NonFungible.com: Track historical market sales data to build valuations of individual nonfungible tokens. Whether buying or selling NFT, compare similar assets and make sure you’re setting a fair price! We track all NFT marketplaces on the Ethereum blockchain.

 

Ultimate Resource On Non-Fungible Tokens

Juicy NFTS Looks At The Underlying Protocols On Top Of Which NFTS Are Launched. These Protocols Include Ethereum, Tron, Eos And Others. By Tracking And Analyzing The On-Chain Transactions We Get The Data Presented On This Site. (Twitter)

Close your eyes and imagine the future. You walk into a shoe store. You buy a pair of expensive shoes with your favorite cryptocurrency. You did not have to pay the entire cost of the shoes because you had some digital store credit that you had earned by blogging about the business. Now, you own a physical pair of shoes, but the store has also given you a digital token representing your shoes.

It is your lucky day. The digital shoes you just received are ultra-rare. They have platinum laces and are diamond-studded. You just hit a digital lottery! You race home and turn on your game console. You send the digital shoes from your wallet to your game. You find the digital card representing your favorite basketball star, and you equip them with the digital shoes. Boom! Powerup unlocked, and now your sports star runs faster, and the chance of spraining their ankle in the game has reduced.

You play games with your friends, and your powerhouse star helps you to trounce your buddy in Japan. The game sends you some cryptocurrency as a celebratory gift. You post your satisfying victory on social media and earn praise and more crypto for having smashed your friend so brutally.

Welcome To Web 3.0.

The Status Quo — Web 2.0

We’re not there yet. We’re still building the necessary infrastructure, and web 3.0 is worth the wait.

Let’s roll back the clock and talk about now. We walk into a store and buy an item. The cashier hands us a receipt after we pay in cash or card. Or, when we work with a real estate agent and purchase a house, we get a deed. Even if you have to register your motorcycle at the Department of Motor Vehicles, you will be asked to present a vehicle identification number.

All of these actions require some form of deed or receipt to track ownership. Nearly all of this is done on paper, but there is a better way to do this tracking by using an open-source and public database that is also known as a blockchain.

If you’ve been living outside the fintech space, you may not have heard of blockchain technology or cryptocurrency. In short, a blockchain is a public and open-source database that stores data over time in chunks (blocks) as it grows.

Cryptocurrencies like Bitcoin (BTC) or Litecoin (LTC) utilize blockchain technology as a stable platform to transact and store the data of transactions. You can download a wallet in order to earn or buy cryptocurrency and send it around the world with near zero barriers. It’s hardcoded economic freedom.

Modern databases are powerful machines capable of doing millions of transactions per second. They can be used for more than just transferring numbers around among users. So, yes, you can send BTC to your sister for her birthday, but there’s more to it.

What’s A Nonfungible Token?

If I say I’ll give you a dollar, you wouldn’t typically ask me, “Which one?” It doesn’t matter. Any dollar bill with George Washington on it out of my wallet will likely suffice for you to buy something at 7/11. Similarly, if I tell you, “I’ll send you a Bitcoin so you can buy a motorcycle,” you’re not going to ask me, “Which Bitcoin?” While each Bitcoin can, in reality, be tracked separately, the market treats all of them as entirely equivalent, and the buzzword for that is “fungible.”

Imagine it’s our wedding day, and I tell you that I’ve bought you a house. Before getting all excited, you may want to ask, “Which one did you buy?” That’s because all houses aren’t exact replicas of one another. They’re different. And even model homes using the same plans are different because of their construction. Houses are unique; their mortgages are unique, and these are tracked separately with lots of painstaking detail.

Houses, receipts, trading cards and many other things in this world are nonfungible. They are unique; they can’t be substituted even with something that has the same name or shape — for example, an autographed football card or a house whose roof has caved in. There are differences in everything that exists.

On a blockchain, there are generally two types of tokens that can be tracked. Fungible tokens are like currencies that don’t have unique properties, and all we care about is quantity and ownership. Nonfungible tokens, however, differ in that we can track things in detail for property rights, time of purchase, evidence of the transaction, edition, rarity, statistics and millions of other possible categories that make something unique.

Non-Fungible Tokens And The Future of Commerce. Ultimate Resource On Non-Fungible Tokens
NFTs can serve as a digital deed or receipt and then it can have utility. The next time you buy a pack of trading cards, you can pay with crypto and receive NFTs in return.

These tokens can also represent property rights. Imagine that you buy clipart. You can download the images, but if you want to use them commercially, you have to own the token that transfers the rights. If a company sees its image being used, the NFT in your possession indicates that you have purchased the right to use those images.

These tokens can also be used to track individual inventory. You could receive an NFT when you buy a brand new car or a house. The keys to your wallet and the presence of the NFT proves that you are the rightful owner. More importantly, others can use the public database to check if you are the rightful owner. There is no more need to worry about whether something is counterfeit or not. You either have the keys and NFT in your wallet, or you don’t; and anyone with an internet connection can check.

Web 3.0 Unlocked

Crypto is a brutal space. One minute, token prices are falling, and the question you ask yourself is: “Can I survive this?” The next minute, prices are climbing, and the question now is: “Can I scale rapidly?” The market is savage. That’s leading to a lot of boom and bust in the market, it’s also creating hardened and sustainable companies. It’s hard to be wasteful on a blockchain as the market chews them up.

The nascent industry is still experiencing growing pains, but distributed blockchains have been developing, and businesses have been increasingly setting themselves up on blockchains. Once they’re established on a blockchain, businesses will be able to track transactions in detail with unique tokens, and those tokens will be transferable across vast interconnected networks.

You’ll get your collectible sports stars, buy digital rights to your favorite piece of art, send your kid crypto on their birthday, and watch as commerce is reshaped by blockchain technology and NFTs. Smile, you are a bitpunk or will be soon enough.

Updated: 7-22-2020

The Cat In The Hat Is Coming To The Blockchain

Leading NFT collectibles issuer Dapper Labs has announced a deal with Dr. Seuss Enterprises to launch tokenized collectibles depicting the firm’s iconic characters.

Dapper Labs, the team behind the pioneering non-fungible token (NFT) game CryptoKitties, has partnered with Dr. Seuss Enterprises to launch tokenized digital collectibles depicting the company’s most iconic characters.

Announced on July 21, the deal will see digital experiences created alongside tokenized representations of Dr. Seuss’s most popular characters include Cat in The Hat, The Lorax, and Thing One and Thing Two.

Cat In The Hat Goes Crypto

Dapper will sell digital packs of the crypto collectibles, allowing fans to assemble and curate NFT collections. Fans who assemble specific ‘sets’ of tokens will unlock exclusive content, and be able to access unique experiences beyond those offered by the purchasable packs.

In an announcement, Dapper Labs’ founder and CEO Roham Gharegozlou emphasized the shift in how consumers engage with collectibles amid growing digitization.

“With our new Dr. Seuss digital decal experience, we are marrying the best of both worlds — allowing fans to interact and discover something entirely new while tapping into our collective nostalgia for the characters that mean so much from our childhood,” said Gharegozlou.

The firm highlighted that NFTs are “designed to live on forever in a digital space” asserting that Dr. Seuss fans will be able to pass down the digital collectibles across generations.

Updated: 7-26-2020

Spotting the Potential of NFTs in the Blockchain Gaming Industry

Polyient Games’ Craig Russo believes that the NFT market has come to represent one of the “most attractive opportunities” across digital assets.

Non-Fungible Tokens (NFTs) are emerging as a very popular blockchain trend in gaming, as they’re also now being used in the sports industry (ticketing), financial services, and as a way to sell and transfer property, highlighted Craig Russo, director of innovation of an investment firm and startup ecosystem, Polyient Games.

In an interview with Cointelegraph, Russo explains that NFTs first captured the attention of the mainstream crypto community in 2017 with the launch of Ethereum (ETH) collectibles game, CryptoKittie.

Since then, Russo believes that the NFT market has come to represent one of the “most attractive opportunities” across all digital assets, with immediate use cases already being found within the art, collectibles and even the gaming industries.

Polyient Games’ Director Of Innovation Explained Further About The Role Of NFTS Within The Gaming Space And Its “Steadily” Popularity:

“One reason gamers are gravitating towards blockchain is that – unlike traditional games – blockchain environments permit players to gain true ownership of their in-game items. This means blockchain games, driven by non-fungible tokens (NFTs) and digital collectibles, are unlocking an entirely new economic system that enables gamers to earn real money while they play. Fueled by these applications, the collectibles market has reached $370 billion.”

NFTs And DeFi

Russo states that we are also beginning to see NFTs emerge “as a standalone asset within decentralized finance (DeFi),” including lending and fractional trading, and companies within the industry such as Polyient Games are bullish on NFTs in DeFi.

However, Russo Told Cointelegraph About The Major Hurdles That NFTS Adoption Is Facing Currently:

“A lack of understanding about NFTs from both the public’s perspective as well as mainstream media is probably the biggest hurdle, but – based on the feedback we’ve gotten so far – we’re seeing more and more mainstream interest daily.”

The Role Of The Pandemic In The NFTS’ Popularity Within The Gaming Industry

Covid-19 Has Altered How People Interact, Travel, Communicate, Work And Conduct Business, Says Russo, But “It’s Also Reshaping The Entire Gaming Industry.” He Quotes Figures That Reveal In April 2020 Alone, U.S. Consumers Spent A Record-Breaking $10.5 Billion On In-Home Gaming:

“This renewed passion for gaming has also caused a spike in gaming stocks. As people continue to social distance, this trend will continue. And – as players discover blockchain games, powered by NFTs and digital collectibles, which offer an entirely new, fully-immersive gaming experience – they will continue to embrace blockchain games.”

Updated: 7-30-2020

William Shatner’s NFT Collectibles Sell Out At Warp Speed

Fans bought 125,000 non-fungible token trading cards featuring Star Trek’s William Shatner on the WAX Blockchain.

Digital collectibles featuring personal memorabilia from the actor best known as Captain Kirk of the USS Enterprise have sold out in just minutes.

Non-fungible token (NFT) trading cards featuring images from William Shatner’s personal life and career, from the 1930s to today, sold out in nine minutes according to WAX. The online marketplace for virtual items offered 10,000 “packs” for sale, featuring roughly 125,000 digital collectibles in total.

Collectors can now buy, sell, and trade the cards amongst themselves. Some of the scenes included Shatner’s headshots and characters from his early acting days and there are also more personal moments including him hugging fellow actor Leonard Nimoy, AKA Spock, and even an X-Ray of Shatner’s teeth.

“I’m astonished at how quickly it all happened,” Shatner told Cointelegraph, adding he hopes people who purchased the NFTs would be able to find new friends in trading them.

“The cards themselves represent a beautiful past,” he said. “The verification of being on the blockchains represents a great future. So we have the past and the future mixing together.”

Blockchain Advocate

The Star Trek actor has been a blockchain advocate for some time, promoting the technology on his Twitter account. Shatner spoke to Cointelegraph Magazine in June, saying that “putting something on a blockchain is forever.”

Updated: 8-6-2020

Dapper Labs Raises $12M From VC Firms And NBA Players, Nets $1.2M In NFT Sales

CryptoKittes’ creator Dapper Labs has secured $12 million in investment from blockchain venture capital notables and pro-NBA players.

Dapper Labs, the team behind CryptoKitties and NBA Top Shot, has secured $12 million in the latest investment round for its Flow blockchain.

New investors include Coinbase Ventures, BlockTower Capital, and NBA players Andre Iguodala of Miami Heat, Spencer Dinwiddie and Garrett Temple of the Brooklyn Nets, JaVale McGee of the Los Angeles Lakers, and Aaron Gordon of the Orlando Magic.

Dapper’s chief executive and founder, Roham Gharegozlou, stated that the funding will be used to “ensure that Flow can scale to the size of projects appealing to fan bases as big as the NBA.”

Dapper Labs has now raised approximately $38 million in total.

NBA Top Shot Sees Early Success

Dapper Labs also revealed that it has sold more than $1.2 million worth of crypto-collectibles to hundreds of early adopters on the two-month-old beta version of its NBA Top Shot platform.

The game is Dapper’s flagship title built on the Flow blockchain. Top Shot allows players to purchase non-fungible tokens (NFTs) representing significant “moments” in basketball history. Top Shot has sold more than 22,000 packs of NFTs worth $1.2 million to its roughly 900 active beta users.

The tokens offer multimedia experiences through which fans explore videos and statistics relating to the specific moment that each NFT represents, and offer utility within Top Shot’s corresponding Hardcourt mobile game.

Speaking to Cointelegraph, Gharegozlou emphasized Flow’s capacity to host tokens featuring 3Dl animation, stating that Flow was built “to make sure that any NFT has a chance to be able to access a high-throughput environment, have people build applications for them, [and] scale to billions of users.”

Blockchain Gaming Notables Raise Over $550M Combined

Based on data published by blockchaingamer.biz, Dapper’s raise would suggest that crypto gaming firms have raised $552 million in total.

The sum comprises $189 million in the form of traditional investments such as venture capital and stock offerings, and $366 million in token sales, initial coin offerings, and other crypto-native fundraising methods.

Last month saw notable recent raises, with fantasy soccer game Sorare raising $4 million in a seed round and blockchain gaming company Animoca Brands receiving $4.1 million from strategic investors — upping the total sum raised by the company to more than $18 million.

DMarket, a decentralized in-game item marketplace, raised $6.5 million in June to bring its lifetime fundraising total to $26 million. The first quarter also saw Horizen Blockchain Games raise $5 million and game developer SuperTree raise $2.5 million.

Crypto Gaming Is Just Getting Started

Despite the significant sums raised, Animoca Brands’ chief executive Yat Siu told Cointelegraph that the half-billion-dollar milestone is “just the beginning” for blockchain gaming, noting that $4.1 billion was invested in the augmented reality/virtual reality game sector during 2019.

“Gaming today is a $150 billion industry and $500 million invested today is still a small amount,” said Siu. “Given both the potential in games as well as, we believe, the most viable path to mass adoption of blockchain, we think this will only grow more significantly.”

Updated: 8-6-2020

Artist Whose NFT Broke Auction Records ‘Dismissed’ NFTs Initially

Trevor Jones, the artist who composed Picasso’s Bull — an NFT that sold for a record $55,555 on NIfty — originally thought that NFTs were destined to fail.

The Winklevoss-backed marketplace for non-fungible tokens (NFTs) and digital art Nifty Gateway recorded its largest-valued NFT transaction to-date during an auction two weeks ago.

On July 23, artist Trevor Jones’ one-of-a-kind piece ‘Picasso’s Bull’ sold for $55,555.55 to Pablo Rodriguez-Fraile of the Museum of Crypto Art (MOCA) on Nifty. The marketplace describes the transaction as “shattering all previous records for the sale of a digital artwork in the form of a non-fungible token” in an August 5 blog post revealing the sale.

Cointelegraph spoke to Jones to learn about his journey with crypto and NFTs.

Jones Discovers Crypto In 2016

Jones has been involved with cryptocurrency for four years, having discovered Bitcoin (BTC) when seeking out investment opportunities following a successful solo exhibition at the end of 2016.

The success of his initial investment prompted Jones to spend the latter half of 2017 researching the broader cryptocurrency ecosystem. In 2018, Jones launched a cryptocurrency-themed exhibition of paintings called Crypto Disruption, before receiving an invitation for his work to be featured at a U.K crypto conference the following year:

“I was invited to show some of my work at CoinFestUK in Manchester in April 2019,” he said. “It was my first crypto conference so there was a lot for me to take in. I ended up chatting with David Moore, the CEO of the NFT art marketplace KnownOrigin. He was trying to explain the concept behind NFTs to me.”

“All I remember thinking at the time was that this wasn’t going to work and especially with me being an artist creating physical work in paintings there was no point in me exploring it. I was so wrong!”

Jones Explores NFTs

Despite initially dismissing non-fungible tokens as doomed to fail, the momentum enjoyed by the sector last year prompted Jones to consider creating and selling artworks in the form of NFTs.

“It was 5 or 6 months after my conversation with David, around September when I began noticing a lot more artists appearing on Crypto Twitter and talking about NFTs and the various marketplaces popping up,” said Jones.

“A lot of interest and excitement was developing around the digital art scene and when I saw a few artists selling their work for decent prices I had to admit I was wrong.”

NFTs Are ‘Huge Part’ Of Art’s Future

Jones’ first foray into NFTs comprised a collaborative work composed in partnership with fellow artist Money_Alotta called ‘EthGirl’.

EthGirl’s auction sparked a heated bidding war before selling for 70 Ether (ETH) on SuperRare marketplace. Equating to roughly $10,080, the auction broke the previous record for the highest-valued artwork sold on SuperRare by 600%.

Jones has since created one dozen NFTs over the course of nine months. When asked if he will continue creating NFTs, the artist said: “I’d be crazy not to!”

“I see NFTs as a huge part of my future and the future of art and the art market in general,” he continued. “As the space grows and more sales like Picasso’s Bull occur the traditional art market will eventually catch on to the digital art market revolution.”

“The art colleges and artists, commercial galleries and auction houses that don’t adapt to the new ways of creating, selling, investing in and displaying art will eventually become obsolete.”

 Updated: 8-9-2020

Crypto Artists And Investors Trusts NFTs To Transform The Art Industry

With Nifty Gateway recently auctioning a digital artwork and NFT for a record $55,555.55, the art world is on alert.

Nifty Gateway, a leading marketplace for nonfungible tokens with the backing of the Winklevoss brothers, recorded its largest-valued auction to-date on July 23 when the digital artwork and NFT “Picasso’s Bull” sold for $55,555.55.

The milestone comes as benefits of fractionalized ownership, decentralized provenance verification and the global liquidity pool enabled by blockchain technology are enticing both art creators and investors to explore NFTs.

Cointelegraph spoke to Trevor Jones, the creator of the record-priced NFT, and the artwork’s buyer, Pablo Rodriguez-Fraile of Museum of Crypto Art, to find out why they believe cryptographic tokens are the future of art.

Sam Haig (SH): How Long Have You Been Active In The Cryptocurrency And Blockchain Space?

Trevor Jones (TJ): I don’t have a technical background per se but after a successful solo exhibition at the end of 2016, I had some money to invest, which led me to Bitcoin. I spent the latter half of 2017 researching and investing in cryptocurrency and then decided to work toward a crypto-themed painting exhibition for 2018, which was called “Crypto Disruption.”

Pablo Rodriguez-Fraile (PRF): We have been investors in the space for about four years now, having been early to Ethereum and major participants in the 2017 ICO season and beyond […] Outside of investments related to NFTs, we have participated in early investments in Algorand, Hashgraph, Klaytn or Avalanche, to name just a few.

SH: When Did You First Encounter NFTs?

TJ: I was invited to show some of my work at CoinFestUK in Manchester in April 2019. It was my first crypto conference, so there was a lot for me to take in. I ended up chatting with David Moore, the CEO of the NFT art marketplace KnownOrigin. He was trying to explain the concept behind NFTs to me.

All I remember thinking at the time was that this wasn’t going to work, and especially with me being an artist creating physical work in paintings, there was no point in me exploring it. I was so wrong!

PRF: Like a fair amount of people, CryptoKitties was our “first encounter.” But we did not really begin to see the power of NFTs until we connected the dots on blockchain-based virtual land (Somnium Space, in particular) and crypto art. We used this as the building block to understand how important NFTs would become in representing both digital identities and brands for individuals and businesses alike.

Jones’ First NFT Auction Sparks A Bidding War

SH: When did you begin exploring creating art in the form of NFTs?

TJ: It was five or six months after my conversation with David around September when I began noticing a lot more artists appearing on crypto-Twitter and talking about NFTs and the various marketplaces popping up. A lot of interest and excitement was developing around the digital art scene and when I saw a few artists selling their work for decent prices, I had to admit I was wrong (after my conversation with David) and that I needed to investigate this art phenomenon much more thoroughly and with an open mind.

I waited until December to mint my first NFT, which was a collaboration piece with the talented digital artist Money Alotta. Alotta had already been working in the NFT space for some time and so he helped me out a lot with the technical aspects of the process. There was a lot of excitement generated around our NFT drop “EthGirl” and after a serious bidding war, it was sold for 70 ETH ($10,080), smashing the ATH record on SuperRare by seven times.

Due to the fact that my NFT animations derive from my physical paintings, my work is exceptionally scarce. Since “EthGirl,” I’ve only created 12 NFTs (in nine months) and I believe this is one of the key reasons why I’ve hit the ATH sales record on all the major marketplaces — SuperRare, KnownOrigin, MakersPlace and now Nifty Gateway.

SH: What Appealed To You About NFTs As An Asset Class To Invest In?

PRF: Recording both land titles and art provenance on a blockchain always made sense to us. Some of the primary benefits of NFTs are low-cost transferability, ease of storage, display options between physical and virtual worlds, lack of incentive for theft (as opposed to Bitcoin or Ethereum, which can be mixed). NFT projects also offer automated secondary sale royalties and the ability for artists to represent themselves to global markets without gallerists as intermediaries.

SH: What Was The First NFT You Purchased?

PRF: Land acquired during the Decentraland auctions. Our first piece of crypto art, fittingly enough, was “LADY LUCK” by miss al simpson.

SH: Will you continue to invest in NFTs, and in what ways would you like to see the space evolve over time?

PRF: Of course, we will always be interested in acquiring historic pieces of crypto art for [MOCA]. Frankly we feel this is a beautiful and wonderful community, and there is not a lot we would change. As new money enters this space, we will be tested, and I hope everyone can remain true to what attracted them here in the first place. If we could make one critique, we would encourage all collectors who are just speculating with assets held in “vaults” to find ways to further prove the use case for NFTs!

NFTs Are The Future Of Art

SH: What Are Some Of The Benefits Offered By NFTs That Are Most Appealing To You As An Artist?

TJ: Now that I’ve fully got my head around the rare digital art market and art concept, I see so many benefits, especially from the viewpoint of a physical artist/painting like me:

Creating digital animations with soundtracks is super exciting for me. NFT animations enable me to express my creative ideas and traditional artwork in completely new and dynamic ways that I’d never even thought of before and, importantly, to be able to monetize them.

Physical paintings and prints can be damaged over time if not properly cared for, whereas my digital work will always remain in the exact same visual state as when created.

Selling my physical painting via a JPG or “still image” NFT not only adds extra value to the painting but it ensures future collectors have access to my sales records.

This transparency of my painting sales prices instills buyer confidence in my work and reputation — i.e., they know that I’ve not overinflated my prices, as they can easily see what other pieces have sold for and when.

Cost of international artwork delivery is very expensive (customs tax, insurance, professional packaging, etc.), whereas purchasing an NFT costs only a small gas fee.

It’s a lot easier for buyers/collectors and artists to benefit from the secondary art market.

Auction houses are the main place to sell paintings on a secondary market. They take around 30%, and it’s a lot of hassle even getting an artwork in and up for sale. Moreover, artists are now getting a material percentage on secondary sales.

So, for example, my “Picasso’s Bull” art drop on Nifty Gateway has allowed me to twice realize income from the sale, on the initial drop and also the secondary sale. An artist getting a piece of the secondary market sale is almost unheard of in the traditional art market.

Editions can be created easily — the digital version of the traditional print edition concept — so buyers/collectors who can’t afford a 1 of 1 can still collect an artist’s work in the form of an edition.

Fractionalizing (offering “shares” in an artwork) is now possible, and I’ll soon be offering fractional ownership of my physical paintings through NFTs.

Of course, being a painter for the better part of 20 years, I’ll always be partial to the experience of standing in front of a physical work of art. This feeling can’t be replicated in the metaverse… yet.

Who knows what will happen, but I’m 100% confident that although digital art and experiencing it in virtual reality will become a huge part of the story of art, physical artworks will always be cherished and valued.

Updated: 8-12-2020

Three Reasons Why NFT Market Is Bound to Rise And Shine

As the world becomes more and more digital, the solution to the question of ownership is already here in the form of NFTs.

In early July 2020, the total sales of nonfungible tokens, or NFT, hit $100 million. And that is just the start.

As the DeFi market reached $4 billion in locked value and leading cryptocurrencies started their rally to yearly highs, we might soon see a hockey-stick growth pattern in the NFT space. Let’s have a look at why it might be the case.

Where Do NFTs Come From?

It’s no secret that the best thing a project can do during a crypto winter is to build — and that’s exactly what the most popular NFT projects of today have been doing during the past two years. Decentraland, which raised over $20 million in 2017, successfully launched this year. It was overtaken in volume by single-developer project Cryptovoxels that finances itself by selling parcels of digital land. Meanwhile, VC-backed Dapper Labs, the author of the famous NFT collectible game CryptoKitties, has been working on its own blockchain to offer a higher throughput environment for NFTs.

We could argue that the crypto ecosystem, in general, has just made another infrastructure leap during this time. Remember 2017: All you could do is to take part in a project with Ethereum, while MetaMask was just starting to gain momentum.

Here’s what we have now: Stablecoins for sustained pricing; non-custodial wallets; fiat on-ramps; funds management platforms; decentralized storage solutions; and digital identity providers. Boom. None of that was around a couple of years ago.

With great use cases and impressive returns brought by decentralized finance, Ethereum has been eyeing a new cycle of user behavior already seen in crypto multiple times. The first hype curve has already started and will only rise — the markets are inflating, and people will bring in more money to the ecosystem.

The Best Entry Point

Here, the NFT market finds itself in a win-win situation. The NFT space has been massively benefiting from all of these technical innovations while serving as a perfect gateway for the new kids on the crypto block.

To make a forecast, I believe that 40% of new users will soon be coming to crypto through NFTs, will then educate themselves, and steadily transfer to other segments.

While it might sound bold, it’s a rather native concept for technology: Games have always been a mechanism for onboarding. Remember the first thing you used on your computer. Microsoft created Minesweeper to teach people to use a mouse and click into small objects; Solitaire was designed to practice the drag and drop.

Why Are NFTs Native To Human Psychology?

Reason #1: Simplicity And Fun

The process of collecting digital art, in-game assets (swords, garments), cards and kitties is a very easy and fun concept to grasp, and it does not require any financial education. Users see their entire interaction with the interface as a fun game and are incentivized by the emotional reward of unique object ownership.

Fabian Vogelsteller, the original creator of ERC-20 and ERC-725, has shared in his public interviews that these standards were initially created for fun community tokens — art, fashion and entertainment — rather than financial applications that have recently been successful with the DeFi movement.

Fulfilling the original idea of Ethereum architects, NFTs address the same pattern that makes people collect paintings and vases. Visual representation of an object with an immutable record of ownership is psychologically appealing to users.

Reason #2: Scarcity And Investment Attractiveness

Pricing of scarce items is a zero-sum game; people choose the objects they believe will be in demand by other people and thus will grow in price.

As physicist and network scientist Albert-Lázló Barabási writes in The Formula, when performance can’t be measured, network drives success. In the art community, recognized creators, who are growing in popularity and have good connections, produce a limited number of works that are highly sought after by many collectors. This promotes price growth.

If we take any industry without scarcity, say, when windows get more expensive, more windows flood the market. This is impossible in the NFT market where the value of an object is inseparable from the psychological attraction, so the economic cycles are way more distinct. The further in, the hotter it gets.

Reason #3: Adoption From Asia

The fact that a lot of crypto projects target Asian markets to be successful is old news. In the case of NFTs, this interest is even more natural because the concept of funny collectible objects and games have strong cultural origins in countries like South Korea and Japan.

Asians have an active interest in visual representations of objects, cute characters and images. For instance, mascots — cute animals representing a specific town or company — as well as world-famous emojis were born in Japan.

The value of an unbacked asset that is purely market-driven also seems to be a native concept for Asians.

Games with in-house currencies that could be withdrawn existed in South Korea way before crypto.

What’s Next?

Serving the demand, more gaming companies and other players have been entering the NFT space, attracting the attention of investors, who are searching for the best assets to invest in. That’s why it didn’t take long for the NFT market to reach $100 million in total sales — and it will only grow exponentially, given the factors mentioned above.

Unlike DeFi, where user interest and demand are driven by the practical applications and the promise of returns, the NFT market is driven by deep psychological patterns.

As the world becomes more and more digital, many objects emerge as digital-native only, and the solution to the ownership question is already here in the form of NFTs.

There are several concerns yet to be solved to further facilitate adoption: interoperability and gas prices, among others. A unified Layer 2 solution is needed to have all NFTs visually represented on all platforms and wallets, as it’s a crucial psychological factor in terms of ownership.

Ethereum hasn’t been keeping up with the expectations to launch Ethereum 2.0 because of delayed sharding and congestion, so I expect the problem with gas prices to worsen.

The author of a curious article offers an interesting mental model: A sharded chain works like cities and suburbs connected by highways. In the long run, it would be a great goal to have an NFT “city” in one of the Layer 2 solutions or a shard. That’s another reason why I’m encouraging NFT projects to choose the same Layer 2 solutions.

To sum up, we have a great rally ahead of us that is bound to bring multifold growth — but also many obstacles along the way.

Updated: 8-16-2020

Major South Korean Chat App Bets Big On NFT-Based Stock Trading

The race for blockchain adoption is on in South Korea.

South Korea’s well-known chat application, Kakao, bolsters its presence in blockchain and crypto with its partnership with a non-fungible token-powered trading platform and its new crypto wallet Klip.

According to Hanguk Kyungjae, the trading company Angel League will receive support from Kakao’s Klip platform for its digital certificates based on NFTs.

Angel League allows groups of investors to jointly purchase the stocks of startups in the “pre-IPO” stage. The members, known as “lead angels,” are selected through a recruitment process to incorporate new people willing to sign a stock trading contract to operate on the platform.

The trading company will then issue membership confirmation on an NFT-based digital card through the Kakao’s Klip crypto wallet. It is permanently stored in the blockchain platform of the chat application, Klaytn. With the NFT-based digital card issued, members can then trade on the platform.

Jae-sun Han, CEO of Ground X, the chat app’s blockchain company affiliate, explained the decision behind joining the NFTs’ support:

“By making it possible to verify the membership of the Angel League through the NFT digital card of Klip, we have reduced operational hassle and strengthened the convenience of members. It will also expand the way to transfer ownership of the company through Klaytn. Together with Ground X, we will discover several examples of NFTs that can promote financial innovation.”

In June, Kakao listed its Klaytn blockchain-issued Klay token via a local cryptocurrency exchange on June 5. This news follows their launch of a new crypto wallet feature in KakaoTalk earlier the week.

Klay’s listing announcement came after the South Korean company said that its new crypto wallet function surpassed 100,000 users in less than a day in its chat app, KakaoTalk. The feature went live on June 3.

Updated: 8-17-2020

Paris Hilton Drew A Cat And It Somehow Sold For $17,000 In ETH

Paris’ pet is forever immortalized as an NFT.

Media personality and businesswoman Paris Hilton announced that she successfully auctioned a digital painting of her cat, Munchkin, for 40 ETH — worth almost $17,000. The sale was held through an Ethereum-based auction platform called Cryptograph.

According to a tweet published by Hilton, money raised from the auction of the portrait will go to three charities in the United States — The LA Food Bank, Meals On Wheels, and BB4Homeless.

The anonymous winner of Paris’ auction, known only as “Adirolls”, has also bought artwork made by Bitcoin.com’s founder, Roger Ver, and the Ethereum Foundation researcher, Vlad Zamfir.

This isn’t Paris’ first foray into the world of Blockchain. In September 2017, she announced that she was involved with the Singapore-based project, LydianCoin. Once the founder was convicted of domestic violence and battery however, Hilton deleted her tweet.

Updated: 8-20-2020

Yield Racing: F1 Delta Time Players Can Now Stake Their NFTs

Players of the crypto-powered F1 Delta Time game can now stake their NFTs to generate rewards in the form’s Animoca Brands’ REVV token.

Blockchain gaming company Animoca Brands has launched staking for the non-fungible token collectibles (NFTs) featured in its F1 Delta Time title.

Stakers will be able to earn a weekly dividend on their NFTs in the form of REVV tokens. REVV also comprises a utility token that can be used to pay for entry into the game’s core Time Trial and Grand Prix modes.

Animoca also plans to support REVV as a means of payment for purchasing NFTs later this year. NFTs in the game include unique race cars, drivers, car components, driver gear, or tyres that players can own.

Speaking to Cointelegraph, Animoca Brands’ chief executive Yat Siu noted that “there isn’t a traditional token sale currently in the pipeline for REVV,” emphasizing that REVV tokens can only be obtained by staking F1 Delta Time’s NFTs.

“The goal is to establish true utility for the token first through its use in F1 Delta Time. Beyond this, we’ll pursue an exchange listing alongside expanding the support of REVV through the release of additional games, like the MotoGP game.”

Siu said that NFT staking was introduced to allow NFT owners to earn dividends from their tokens, and to drive “cross-pollination” across both the NFT and crypto communities.

“The general crypto audience is presented with the potential value of NFTs for the first time, and the NFT audience [is] given a gateway into fungible crypto tokens,” said Siu.

F1 Delta Time Gets One-Sixth Of Supply

F1 Delta Time will be allocated 500 million of REVV’s three billion token supply, with the tokens being allocated across four pools for the game.

The first round of staking will see 6.02 million REVV distributed over 12 weeks, with weekly payouts gradually decreasing as an incentive to reward early stakers. Total weekly rewards will reduce from 700,000 to 332,500 tokens over the 12-week period.

Staking rewards will also vary based on the rarity of the NFTs being staked by users. 200 million tokens have been reserved as “a back-up fund which can be injected into other pools” as F1 Delta Time grows” while nearly 274 million tokens will be distributed as gameplay rewards to players.

20 million tokens have been designated for marketing and promotional purposes, including dispersing airdrops to verified account holders and ‘crate’ sale participants.

It’s early days yet however, with F1 Delta Time’s userbase currently comprised of roughly 4,000 player accounts and 470 NFT owners.

Updated: 9-9-2020

Minecraft NFTs Are Coming To The Blockchain Before The Year Is Out

This will be made possible thanks to the integration of a well-known blockchain plugin.

Minecraft, a best-selling game and worldwide phenomenon, is about to make its debut in the non-fungible token, or NFT, business thanks to the efforts of two players in the blockchain industry.

According to the announcement, Japanese crypto exchange Coincheck’s upcoming NFT marketplace will feature NFTs backed by a plugin from the blockchain firm, EnjinCraft, which are playable in select Minecraft servers.

The exchange stated that they had previously been looking for a blockchain firm to help them develop their own NFT Marketplace, and Enjin came aboard to help make that a reality.

However, Bryana Kortendick, VP of operations and communications at Enjin, clarified to Cointelegraph that this is not a partnership with Mojang or Minecraft. Rather, it is a collaboration between Coincheck and Enjin.

During an interview with Cointelegraph in July, Craig Russo, director of innovation at Polyient Games, claimed that one reason gamers are gravitating towards blockchain is that “unlike traditional games, blockchain environments permit players to gain true ownership of their in-game items.”

Russo praised the fact that the collectibles market reached $370 billion, and quoted figures which show that in April 2020 alone, U.S. consumers spent a record-breaking $10.5 billion on in-home gaming.

Mac Ocampo, head of growth at blockchain entertainment studio Virtually Human Studio (VHS), likewise told Cointelegraph in an interview that NFTs and gaming platforms complement each other well. He said there are “good NFT products out there like Sorare and Dapper Labs’ NBA Top Shot which introduces more mainstream users to the world of NFTs.”

Updated: 9-14-2020

Polyient Games Innovative Dual-State Token Sale Kicks Off Tomorrow

When is an NFT not an NFT?

The Polyient Games Founders Key, or PGFK, token sale begins Sep. 15, with a strictly limited 12,000 of the tokens up for grabs. This follows an August pre-sale during which the company sold an initial 500 tokens.

Each PGFK will be a non-fungible token, or NFT, with a twist. Using a smart contract called the “Particle Bridge”, holders can convert the PGFK into 1,000 fungible particles (XPGP). These particles will be the utility token for the Polyient ecosystem.

The corresponding PGFK is burnt forever, although a new one can be minted by sending 1,000 XPGP back through the smart contract in the other direction.

All PGFK are not the same however, and tokens re-minted in this way will no longer hold a coveted “generation zero” status. Future rewards for holders may be specific to the generation of token held.

In many ways this makes the PGFK more of a collectible than a trading token, and is just one of the ways that Polyient is gamifying participation in its ecosystem.

There will only ever be a maximum of 20,000 PGFK tokens. The remaining 7,500 are being reserved by Polyient, although some of these will be initially converted into particles to provide liquidity for the utility token.

PGFK holders will receive rewards, such as early access to games in the ecosystem, loot boxes and airdrops, and early access and fee reductions on the Polyient marketplace. As Cointelegraph reported, the marketplace will feature a decentralized exchange (DEX) for NFTs, powered by the Avalanche blockchain.

One of the first airdrops will be for the Polyient Games governance token, or PGT. These will be issued one-to-one with each PGFK and will serve as the voting mechanism behind the PG DAO.

Ultimately, the ecosystem will extend to include decentralized finance, or DeFi, style lockups, and third-party applications built on top of the assets.

When asked what differentiated Polyient from the flood of other recent DeFi providers, Polyient Labs’ Director of Innovation Craig Russo told Cointelegraph:

“We’ve taken the time to build out the ecosystem with a wide range of use models, including a gamified DeFi experience. This will facilitate user choice that will ultimately create an ever changing experience, coupled with the engaging supply dynamics of our dual-state token.”

With the proportion of tokens constantly in flux at some point between a maximum of 20,000 PGFK and a maximum of 20 million XPGP, it certainly brings a notable twist to token economics.

Updated: 9-15-2020

Dapper Labs–USDC Integration Helps NBA Collectibles Game Clear $2M In Revenue Since June

Gamemaker Dapper Labs is using Circle’s dollar-backed stablecoin, USDC, as a global settlement solution for its non-fungible tokens (NFTs).

The firms announced Tuesday the move allowed Dapper Labs to add fiat payment options to its website for the first time. The startup’s current flagship offering, NBA Top Shot, launched in June and has clocked $2 million in revenue and 58,081 transactions, according to data shared with CoinDesk.

The game relies on NFTs, a special type of cryptocurrency where every single token is unique and individual, making them ideal for collectible cards or digital art. The embrace of USDC on Dapper’s back-end is another bid by the firm to court mainstream users by reducing the friction associated with cryptocurrency payments.

Dapper Labs, which was behind the popular CryptoKitties game that choked the Ethereum blockchain in 2017, said supporting fiat currencies lets the company appeal to the broader collectibles market. Ethereum’s scaling issues drove Dapper Labs to launch its own Flow blockchain earlier this year.

“We’re proud to work with Circle in building an amazing payments experience for all our customers on Flow, starting with NBA Top Shot,” Dapper Labs CEO Roham Gharegozlou said a statement.

Circle released a suite of e-commerce services earlier this year for facilitating faster payments by using USDC for settlements.

Having launched in September 2018, USDC’s market cap has doubled by $1 billion in the past two months, surpassing $2 billion on Monday, according to CoinGecko.

Updated: 9-18-2020

Fantasy Authors Turn the VulcanVerse NFT Game Into A Trilogy Of Books

Two of Britain’s most successful gamebook authors have taken it upon themselves to turn VeChain’s VulcanVerses NFT game into a fantasy trilogy series.

Award-winning British fantasy authors Dave Morris and Jamie Thomson will write a new fantasy trilogy “The Vulcan Verses”. The community project’s title is based on VeChain’s forthcoming Vulcan Forged non-fungible token-powered collectible card game and decentralized virtual world VulcanVerse.

With more than 100 books to their names, the authors are considered among the most successful British gamebook authors, writing the Fabled Lands, Fighting Fantasy, and The Crystal Maze gamebooks. Gamebooks are interactive stories where the reader can choose the story’s direction through their own choices.

Morris and Thomson have contributed to more than 70 books and 30 books respectively. One of Thomson’s most successful series has been published in the UK, Japan, France, the U.S., Italy, and Sweden, with each of the six titles selling more than 60,000 copies in the UK alone.

Both authors are also game developers who often write gamebooks and supporting works for fantasy and role-playing games and have worked with some blockchain projects before.

“The Vulcan Verses” narrates the story of the Vulcan God who embraces human technology to create a 3D virtual world and restore the fading powers of the Old Gods. Thomson said the trilogy will be set in the universe, which blends Greco-Roman mythology and high fantasy:

“The books will be a prequel to the virtual game, documenting the journey from technology and atheism taking over to the point when the old gods must choose either to fade into memory or to take things into their own hands.”

VulcanVerse is a Massively Multiplayer Online Role-Playing Game (MMORPG) that allows users to buy and sell plots of virtual land tied to NFTs while interacting with other players. The game is set for release later this year alongside a standalone 3D builder app that allows players to design scenery, customize characters, and create their own artwork.

The plots of land go on sale on Sep 30 and only 10,000 plots of 20m x20m land will ever be created. Each plot costs $100 and is able to be purchased with Ether (ETH), Tether (USDT), VeThor (VTHO), or VeChain’s native token VET, with a 5% and 15% discount for Economic Nodes and VeChain X-Nodes respectively.

Updated: 9-22-2020

Non-Fungible Digital Art ‘Goes Parabolic,’ Attracts Morgan Creek Execs

Anthony Pompliano sees the digital art market cap eventually passing $65 billion.

Major players in the crypto community are betting big on digital art NFTs surpassing the physical art market.

According to a Sept. 21 tweet from Messari analyst Mason Nystrom, sales of non-fungible token (NFT) marketplace Rarible passed $5 million in September, with a volume of 5,309 of its RARI governance tokens traded. Messari reported that $1.5 million of this new volume came on a single day, on Sept. 14. In addition, the SuperRare NFT marketplace has “grown at an impressive rate” this year, according to Nystrom.

This activity has caught the attention of investors seeing the potential of NFTs, which can be used to give token holders ownership of digital art, collectible trading cards and more. Morgan Creek Digital co-founders Anthony Pompliano and Jason Williams have reportedly made a “big bet” by partnering with a number of digital artists.

“Similar to how Bitcoin is superior to gold in almost every way, digital art is superior to traditional art in almost every way also,” Pompliano said in his newsletter. “This transition to a digital art world is not a question of if it will happen, but rather when. I personally believe that the digital art market cap will grow to become larger than the physical art market cap.”

The Morgan Creek exec stated that the traditional art market had a market cap of roughly $65 billion for the last few years and outperformed the S&P 500 by over 180%. Pompliano said he was confident he would see a “6,000x increase” in the digital art market cap, which he estimated at currently less than $10 million.

The record $100,000 sale of a digital art piece on NFT marketplace Async Art supports Pompliano’s assertion, as does an undisclosed investment from crypto investment firm CoinFund into Rarible on Sept. 8. Rarible predicted that the entire NFT sector will see a 50% growth in capitalization to reach $315 million by the end of this year.

“Given the ease of buying and selling digital NFTs and the popular appeal, it’s only a matter of time before the digital art realm surpasses that of the physical,” said artist Darren Kleine.

Updated: 9-23-2020

Christie’s To Sell Its First Non-Fungible-Token As Part Of Epic Bitcoin Artwork

Art historian-turned-blockchain artist Robert Alice believes that the Bitcoin codebase is a culturally and politically significant piece of 21 century history.

Christie’s is set to sell its first nonfungible token in an upcoming auction of what has been characterized as “the largest artwork” in the history of Bitcoin (BTC).

Art historian turned blockchain artist Robert Alice has created “Portrait of a Mind” — a monumental series of 40 paintings stretching over 50 meters in length.

Drawing on the history of 20th century conceptualism as well as the founding myth of Bitcoin’s creation, “Portrait of a Mind” is a complete hand-painted transcription of the 12.3 million digits of the code that launched the cryptocurrency.

By scattering the codebase into 40 globally distributed fragments, the project will “draw up a global network of 40 collectors where no one individual will hold all the code,” Alice said. He explained:

“In each work, an algorithm has found a set of hex digits that together are highlighted in gold. These read a set of coordinates that are unique to each painting. 40 locations across 40 paintings – each location is of particular significance to the history of Bitcoin.”

Speaking to Cointelegraph, Alice said he remains curious as to why much of the commemoration of Bitcoin emphasizes the publication of the whitepaper over and above the codebase itself, which, for him, is “the real historical document.”

Christie’s will sell one painting from the series, “Block 21 (42.36433° N, -71.26189° E),” as part of its “Post-War and Contemporary Day Auction” on Oct. 7, at the end of a week-long exhibition of auctioned works in New York.

The piece includes a unique fungible token as an integral part of the work and will be offered at an estimated price of $12–18,000.

Early collectors of paintings from “Portrait of a Mind” include Binance founder Changpeng Zhao and Bloq chairman Matthew Rozsak. Alice has said that by showcasing and selling an NFT at Christie’s, he hoped to spur other contemporary artists to take a look at the NFT space.

Aside from the creative inspiration artists can draw from cryptocurrencies’ complex cultural, technical and politically dynamic history, NFTs can also give artists “more control and a better stake in their practice over the long term,” he said.

Just last week, Cointelegraph reported on the auction of a digital art piece based upon Bitcoin’s fluctuating price action, which sold for over $100,000. Like “Portrait of a Mind,” the artwork integrated an NFT to vest its collector with tokenized ownership rights.

Updated: 9-28-2020

The Inevitable Marriage of Yield Farming and NFTs, Explained

Why is the marriage of non-fungible tokens (NFTs) and decentralized finance (DeFi) happening now? It’s debatable but you can make an argument that it comes back to DeFi’s favorite robo-advisor for yield: Yearn.Finance.

Lately, everything in DeFi seems to link back to Yearn.Finance in some way.

The excitement in DeFi has shifted to the NFT market, with something like a Weird DeFi moment getting ever weirder, as groups form up to mint rare digital artifacts to be attained in unique ways and financialize their ownership, thanks in part to picks-and-shovels work undertaken by the yeomen of online collectibles.

The plethora of strange new experiments has been led in particular by the token MEME, inspired by a tweet from ConsenSys staffer Jordan Lyall. To explain MEME, though, a lot of other developments need to be visited first.

NFT Basics

Reminder: NFTs are one-of-a-kind tokens made possible by Ethereum’s ERC-721 standard. Pioneered by CryptoPunks, then standardized and popularized by CryptoKitties, crypto collectibles started much like trading cards (trading cards that could make babies, at least in CryptoKitties’ case), but they were always envisioned to have more potential than baseball cards.

Ever since Napster, ownership and rights of digitally distributed intellectual property has been a problem.

“It’s hard to own that media, but you can do it pretty cleanly using tokens,” Priyanka Desai, VP of operations at Ethereum startup OpenLaw, told CoinDesk in a phone call.

Desai’s been talking to NFT pioneers lately as she helps to put together a new decentralized autonomous organization (DAO) called Flamingo whose investors are focused on NFTs.

NFTs have not captivated investor attention until quite recently, because lending, borrowing and risk management – what we now call DeFi – has taken up all Ethereum’s oxygen in 2020. So Ethereans largely lost interest in NFTs there for a while – and who could blame them? You could buy them and sell them, and sometimes games would come together, but they seldom held players’ attention for very long. There were more dynamic markets to game; art’s fine but money is money.

Even when there had been buzz, some projects would rise up only to fade away, revealing a weakness in the NFT specification. CryptoStrikers, for example, a sports memorabilia project launched during the World Cup is long gone (soccer-focused Sorare has emerged in its wake).

Also gone: Panda Earth and CryptoJingles and more, and with them the various artworks that made NFTs more than just a weird string of numbers in an Ethereum wallet (these days, teams are using perpetual data storage solution Arweave to address the issue of NFT impermanence).

The NFT–Yield Farming Crossover Event

There has been years of fertilizer but somehow the excitement engendered this summer by yield farming has come to NFTs this fall, and so the harvest is ready.

And here’s how Yearn could have helped: When the DeFi gateway created Y.Insure, a way to do KYC-free insurance on any crypto asset, it used NFTs to represent the policy with insurers.

“Insurance policies have unique properties, so ERC-20 didn’t make sense since it needed to include covered address+amount+duration,” Yearn’s lead developer, Andre Cronje, told CoinDesk via Telegram. (ERC-20 is the token standard that launched a thousand coins.)

So, once reminded of ERC-721’s existence by DeFi’s top Chad, the industry ran with it.

Was it exactly a causal relationship? Who knows. The larger point of NFT and DeFi coming together is more about a growing mood than a clear chain of events. Weird DeFi showed how open finance could become more elfin; elves need toys; NFTs were right there.

Blockade Games is a company looking for every way it can to push the properties of tokenized game assets to their limit.

“People want to play,” Blockade CEO Marguerite deCourcelle told CoinDesk in a phone call. Also known as “Coin Artist,” she just issued her own NFT, as well.

“Crypto communities have always been trying to be games,” she said.

The Financialization of NFTs

A lot of people in crypto are rich and that makes all the best stuff too expensive for the cryptoletariat.

As much as people like owning expensive stuff in crypto, they like owning stuff they can sell whenever they want even more (call it a liquidity fetish). NFTs had managed to be expensive but they had not managed to be liquid, not until DeFi-thinking intervened.

“The general trend is, ‘OK, NFTs are cool but it’s a relatively illiquid asset class compared to tokens,’” said CoinFund’s Jake Brukhman.

Brukhman has always been bullish on NFTs, never losing that focus even as other investors fully turned their attention elsewhere.

“NFTs are actually a financial asset class and they need financial infrastructure,” Brukhman said.

The stranger products are emergent phenomena of that financialization. Brukhman gave the example of Ark Gallery, which is a DAO for CryptoPunks. The punks were made pre-ERC-721 and have become quite valuable as early, cool and rare (there are only 10,000 such punks, each completely distinct). Ark allows people to crowdfund a punk (owning a fraction of the token) and then voting on whether or not to sell it if there’s an offer.

If there is a successful offer, everyone gets a proportionate share of the payment, based on how much they own. This has made CryptoPunks trade at ever-higher prices, allowing more people to feel like they had a piece of one. It’s clear that the spikes in volume have gone much higher this year when viewed on NFT data site NonFungible.com.

NIFTEX has taken that even further. Launched early this year with funding from Digital Currency Group (CoinDesk’s parent company), NIFTEX started off creating indices for NFTs, such as digital real estate or digital cards. But the real innovation kicked off when the firm fractionalized expensive NFTs into what it calls shards (really, just ERC-20 tokens – fungible slivers of previously singular digital assets).

The shard system works somewhat like what Ark Gallery does, except only someone who holds one of the ERC-20 tokens that represents partial ownership of an item can make an offer. The offer automatically succeeds if it fails to receive enough objections in two weeks, with a clever strategy built in to punish low-ball bids.

NIFTEX did its first fractionalization in May and, like Ark, the firm is seeing a lot more liquidity. Shard holders own a fractionalized, extremely rare Axie Infinity card called Almace that saw over 1,000 ETH transacted in its first week after sharding. Joel Hubert, one of the two co-founders, estimated its liquidity all year would have been more like 300 or 400 ETH in a few trades, without sharding.

On NonFungible, Axie Infinity shows appreciably more dollars getting transacted even if the volumes are only bumped up slightly.

“I like where we’re at because Ethereum is all about experimentation,” Hubert said.

The larger point to all of this is that content is finding a path to fair remuneration on the internet.

Added Flamingo’s Desai, “When you start talking about how content creators are paid, that’s where DeFi comes in; and when you start talking about property of creators, that’s all NFTs.”

NFT Mining

For her personal NFT, deCourcelle used NIFTEX to sell off a portion of her shards, into tokens called COIN. She said she wants people to see it as “play money.”

“First thing we’re doing is the most basic sort of farm,” she said, driving home the intended playfulness. COIN holders who add to the Uniswap pool can stake their liquidity provider (LP) tokens and earn another token, CRED, which will offer advantages in Blockade’s games, as well as additional COIN.

Rewarding liquidity with a fresh new token is a particular kind of yield farming: liquidity mining.

Of course, that’s not the only or first mining in the digital property space, and mining is what this whole story is about: DeFi and NFTs merging to create weird new forms of yield that get the imaginations of investors and BUIDLers firing.

The pioneer in the NFT mining industry was arguably Rarible, a marketplace and minter. It growth-hacked its user base by airdropping RARI tokens to anyone that had transacted in a respectable amount of NFTs. It was a governance token that it used to turn its marketplace into a DAO.

Rarible further rewarded users for transactions on the platform, which has generated a substantial amount of questionable volume, but also has helped persuade creators that the additional benefit to transacting there makes it an advantageous place to list work, Brukhman said.

So now NFT fans have fractional ownership, auctions, sales platforms: all the things that seem like normal, natural pieces of the puzzle for setting up a dynamic market.

But the buzz stems from the fact that stranger things are getting built.

Bold Experiments

First off, there’s Aavegotchi, a small startup with funding from the money market Aave, among others. Aavegotchi has a clever variable rarity structure described well in a recent report by Delphi Digital.

In short, Aavegotchis are little playable avatars that can be used in the game world the company is building, both as protocol governance and to play actual games. There’s a lot of ways they can change and be upgraded (called “rarity farming”), but if too many players “improve” their character in the same way, it can effectively lose rarity.

Like in the DeFi game Based.Money, it’s all about guessing how other players will move.

What’s really interesting about Aavegotchi, however, is this: Every character represents a real stake on Aave. The owner can liquidate the stake at any time, but their Aavegotchi will disappear. So it’s a test to see what happens to playability when characters have real value above and beyond their gaming value.

For Blockade CEO deCourcelle, this linkage makes complete sense; DeFi will always look like a shell game until it’s financing things of real value, stuff someone would just buy because they want it.

Are people going to do that with their houses or will they do it maybe with fun digital stuff first?

“All these DeFi projects are looking for the core economic leap for all of these microeconomies,” she argued. “As a game developer, you have already designed an economic loop that’s valuable.”

Don’t Buy $MEME

But the real experiment is MEME.

As noted, MEME started with a jest from Lyall. One of MEME’s insiders (a so-called “Citadel” member) is Jackson (who sticks to one name and is also on the team making the payments platform Flexa).

He made a bold case for MEME to CoinDesk in a phone call, saying:

“The project is on a roll where the whole NFT/DEFI narrative is kind of tied to MEME and kind of leading the pack.”

Folks in Lyall’s cohort got interested in his humorous nudge, a Telegram group formed and a stranger spun up the code to make the MEME token.

“It was like: What can we build?” Jackson said.

He describes himself as someone who typically sticks to projects that make sense to him, where the business case is easy to see. MEME has felt completely different, he said. It’s been more like a vibe and a crew first, with purpose coming later.

This is much like what DeFi Pulse’s Scott Lewis argued about the vegetable tokens of distant early September, saying that the future may be defined by groups first galvanized by an image, only to decide what to do together later.

“I, daily, deeply contemplate what I’m learning from this,” Jackson said of MEME.

For now, Lyall told CoinDesk over Telegram, MEME is just paying cool artists (largely out of pocket) to make compelling NFTs and giving people a way to buy them – by locking up MEME and earning points in the MEME system (they aren’t really tokens because they aren’t tradeable so far).

If people like the images locked onto MEME’s NFTs, they might want to figure out how to own them. “Relative to the other hot projects in DeFi, we’re a lot more accessible,” Jackson said.

That’s something everyone we spoke with pointed out: People get content, whether it’s stuff for video games, art, music or literature. People have made NFTs of a lot of weird stuff.

“This is the media art bent to what’s happening in DeFi,” Desai said.

MEME is doing something that has yet to be seen in the crypto space: testing a product first, then sorting out the business plan later if they see traction. It’s an old script in Silicon Valley, but in crypto, everything credible has largely needed to make sense as a business upfront, the only question being whether people would come.

And MEME won’t be the last. A different cohort of crypto luminaries tried to imitate MEME with FEW but that ended in a shillacious disaster. ROPE still lingers out there, and it’s not clear what that is, besides leaning more on a 4chan aesthetic.

And, off in the background, there is SHROOM, which has been perhaps the least explicative. Its sole blog post mentions a decentralized exchange or DEX, though, which could be a hint. A market with puzzles wired in could be the trick, and that could be what NFTs meeting DeFi unlocks.

“NFTs, just as art? The value proposition is a little. But once you have a game? The value is inherent to the game,” deCourcelle said.

Updated: 9-30-2020

Thirst Traps Explode on NFT Platforms, With Predictably Controversial Results

Sexy selfies and feminist GIFs are selling like hotcakes on non-fungible token (NFT) markets, but not everyone is thrilled about this trend.

Blockade Games co-founder Marguerite deCourcelle, who sold more than $160,000 worth of NFTs before the NFT craze really kicked off in August 2020, launched a cypherpunk self-portrait NFT in early September and said she intends to explore more “personal tokens” over the next year.

“I brought in about $20,000 in a month. I haven’t really focused on selling personal NFTs as a part of my business model,” deCourcelle said.

She marketed the campaign with photos of herself, portraits that clearly required styling and editing skills, which predictably attracted trolls and harassment on social media. Some trolls suggested models can’t be trusted, the infamous temptress trope, comparing deCourcelle to beauty queen Jessica VerSteeg, who is being charged with fraud. But deCourcelle wasn’t deterred.

“The bitcoiners that see me with a personal token are outraged that I’m … selling a scam with ‘my good looks.’ Most of my supporters and fans enjoy that I’m so front and center,” she said in an interview. “It brings more transparency as I try to be more personable and engaging.”

She said haters suggest she must choose to either be a model/influencer or a developer/designer, as if she couldn’t be both. Like many different types of influencers, crypto influencers often market by modeling, which plays out across social media instead of fashion magazines and runways.

For example, Rachel “CryptoFinally” Siegel collaborated with a variety of artists using Rarible in September to issue dozens of NFTs inspired by her selfies. She said one of her NFTs sold for hundreds of dollars worth of crypto, 1 ETH, and another of her NFTs is a lingerie photo titled “I’m in it for the money,” listed for $3,614 worth of ETH.

Siegel said she hasn’t cashed out any of her earnings yet. Instead, she uses them to mint new NFTs, buy collectibles from other artists and pay for other types of transactions. Many of these pieces are complex images, not simple selfies, all using her general vibe and features.

“The selfies are representative of new demographics starting to enter [the NFT market],” Siegel said.

Some crypto-savvy women are now using NFTs to profit from their public image, selling to fans who understand they’re basically paying a tribute to the creator in exchange for a blockchain-based receipt. If sex workers can sell bathwater or socks, and podcasters can sell stickers, why can’t crypto influencers sell blockchain receipts?

In response to the haters, who call these women vain and accuse them of harming the industry, Siegel tweeted: “if my selfies alone have the power to destroy crypto then honestly let it burn boys lmao let it burn.”

Gendered Markets

While some women find new conduits for artistic expression in NFT markets, others are dismayed to find their images used by strangers.

For example, the web developer and painter who goes by Ashtoshi said her bikini selfie was put up for auction via Rarible, without her consent, for over $1,051 worth of crypto.

Although it may be unlawful for a stranger to profit from her misappropriated image, depending on the source, Ashtoshi herself struggled to get support from the platform to sell her art. She’s one of the critics who thinks selfie NFTs are silly.

“While, of course, my pictures were posted publicly on my Twitter, to have them taken from my page and then attempt to be sold with promises of ‘writing a person’s name on my boobs,’ etc., is a bit unsettling,” Ashtoshi said in an interview. “It’s unfortunate because I did ask to be verified on Rarible the same day I posted my art – but it never happened.”

Women in the crypto community don’t have a choice whether people will attempt to profit from their sexuality. They only have (limited) legal options to fight it like a cat-and-mouse game. This is a tale as old as time, where predominately male circles demean women profiting from their own image as the artist and owner, rather than the passive muse. As a painter who did not want to sell sexy selfies, Ashtoshi said she was disappointed by this dynamic.

“I won’t be posting anything else on Rarible or using the platform for anything from here on out,” Ashtoshi said. “While the idea of NFTs is super fascinating, I think there absolutely has to be some type of verification measures put in place to guarantee that what you are purchasing is an authentic piece of art.”

Ironically, a blockchain receipt only proves authenticity if the artist (or trading platform) invests legal resources to defend personal brands. No one suggests male influencers “deserve” to have selfies misappropriated, the way women are slut-shamed for selfies taken from Twitter. Some might say the self-portrait NFT trend is part of a wider push by feminist crypto fans to destigmatize self-soveriengty, especially with regards to the female body.

Crypto-savvy artists like Kitty Bast, Kamil Juaregui and Caroline Dy blur the lines between evocative portraits and digital collectibles.

Ashtoshi said she wished she had posted her painting NFTs anonymously, to avoid her debacle. Other artists use anonymity to court controversy, such as the team called ButerinSisters (after Ethereum creator Vitalik Buterin). They made a clitoris GIF NFT for roughly $54, which was traded by several collectors. ButerinSisters said they met other feminists in the space by promoting this NFT, and hope to playfully educate a few men as well.

“We are feminists and when we discovered the Rarible platform we realized that there were mostly creations made by men and for men, it seemed interesting to us to show feminine creations,” ButerinSisters said in an interview. “We want to use the web 3.0 technology to fight [the patriarchy] and develop feminists representations with decentralized infrastructure, which cannot be censored. … Anatomy is political.”

Updated: 10-1-2020

Dapper’s NBA Top Shot Launches Out of Beta With Samsung Galaxy Store Deal

It’s one game down and as many as six to go in this year’s NBA Finals, and while the unusual season has kept fans outside the arena Dapper Labs is hoping to let them own a piece of on-court action.

Announced Thursday, Dapper Labs is rolling out its blockchain-based collectibles game, NBA Top Shot, to the public. Currently in its beta version and developed in partnership with the National Basketball Association, Top Shot will also be available to U.S.-based Samsung users on the Galaxy app store.

Built using non-fungible tokens (NFTs) minted on the purpose-built Flow blockchain, Top Shot lets users collect, showcase and trade in-game “moments” which capture moves made on the real court.

For instance, a user can purchase a moment based on a James Harden dunk and showcase it, sell it or swap it for, say, a Steph Curry three-pointer.

The platform has managed to build a strong following under an invitation-only beta. Rolled out in May after scoring financial backing from a handful of NBA stars, the platform has since invited 17,000 users on board, recorded 158,000 transactions and raked in over $2 million in revenue, according to data shared with CoinDesk.

Gameplay Options Coming Soon

NFTs are unique digital tokens that allow the issuer to embed identifying information about the item (be it fine art, selfies or a basketball clip) into the token’s smart contract while also maintaining a corresponding ownership ledger on the blockchain.

The embedded identifying information provides protection against the duplication of such items, and the ownership record ensures that users can verify who owns what and carry out transactions.

While Top Shot’s current interface uses NFTs to combine trading cards with digital clips, Dapper Labs also said it is developing a more immersive experience within Top Shot called “Hardcourt.”

“It’s a 3D game where you control players on a basketball court,” Roham Gharegozlou, CEO of Dapper Labs, said in an interview. He explained that once a user has put together their team of desired players for the game, they could then use the “moments” they own to upgrade their players’ abilities.

“If I have a bunch of LeBron [James] dunks, I can train my Steph Curry to be as good at dunking as LeBron by equipping him with a lot of LeBron moments,” he said.

By adding this immersive interface to its platform, Dapper hopes to attract more mainstream users that have largely stayed away from the NFT-enabled gaming world.

“It’s a high graphical experience, because all of our user research showed that that’s what mainstream fans want to see,” said Gharegozlou, adding:

“Crypto fans would be OK with a trading card game or fantasy sports thing. But to actually go mainstream and have a game that tens of millions of people play every day, you need to kind of make it look as good as all the options that are out there.”

Dapper Labs said Hardcourt is under internal testing and is slated for release toward the end of Q4.

Notably, Top Shot allows users to make payments using both fiat (through credit cards) and cryptocurrencies. Even though credit cards and crypto payments make up equal shares of the platform’s revenue, credit cards account for three-quarters of all transactions made, according to data shared by Dapper Labs.

Updated: 10-2-2020

Are ‘Social Tokens’ The Next Big Thing?

Creators and influencers have a new way to monetize their efforts and reward their loyal followers.

Social tokens — or tokens backed by the reputation of an individual, brand, or community — are gaining traction and some believe they could be the next big thing in the cryptocurrency community.

But what are they, and why are artists, musicians and social media influencers rushing to tokenize their efforts in order to gift, or sell them, to followers?

Social tokens are a little different to the slew of DeFi liquidity farming tokens that have appeared over the past couple of months. They are built around an “ownership economy” principle with the premise that a community will be more valuable tomorrow than today.

Creators can monetize their work as an non-fungible token (NFT), or social token, and supporters can give something back to show their loyalty. Influencers minting their own tokens to offer them as rewards, or sell them for additional revenue.

Cooper Turley From Audius Explained In Bankless Today:

”Social tokens provide a means of not only sharing financial upside with their favorite creative but also enables tiered, tokenized access based on active contributions.”

For example, artist Laura Driskill runs a popular Instagram channel and produces Autonomous Sensory Meridian Response (ASMR) videos to aid in relaxation and sleep. She has now created her own ERC-20 social token called TINGLE for her followers to buy in exchange for further interaction or purchasing merchandise.

Grammy award winning artist RAC, aka André Allen Anjos, has just announced a token created with Zora, a platform for artists, creators, and brands to craft their own markets. The token will be distributed to subscribers of various associated platforms and used to unlock access to various perks and exclusive content. RAC stated:

“Crypto enables communities to capture the value they create instead of being monetized by preexisting platforms and $RAC is an active experiment pushing the envelope on these primitives.”

A startup based in New York called Roll has taken things a step further by offering to mint Ethereum-based branded digital tokens, or “social money”, for influencers and creators.

There are around 160 social tokens currently offered on Roll and the number is growing as everyone from rappers to NBA stars to entrepreneurs experiment with this latest method of monetizing content and incentivizing community loyalty.

Tokenomics vary depending on the objectives of the creator but they all have one thing in common; participants all have financial exposure and share in the growth.

Updated: 10-2-2020

NBA TopShot Opens To Public After Closed Beta Drives $2M In NFT Sales

NBA Top Shot, the officially licensed crypto collectibles from the team behind CryptoKitties, has opened its beta version to the public.

NBA TopShot, the flagship non-fungible token (NFT)-powered game built by Dapper Labs on their Flow blockchain, has launched in open beta.

The transition to public beta came on October 1, alongside Top Shot’s launch on the Samsung Galaxy Store. Top Shot is the first app offering blockchain-based collectibles to launch on Samsung’s mobile shop. It is not yet available in the Android app store.

Top Shot allows users to collect multi-media “moments” of varying scarcity representing significant highlights across basketball’s history. The limited edition tokens feature video and statistics depicting an event — like a buzzer beater shot — with users able to unlock extremely rare tokens by completing particular “sets” of tokens showcasing related moments.

Professional NBA player and Dapper Labs investor, Aaron Gordon, said:

“NBA Top Shot, on a scalable blockchain like Flow, is the first time fans can own a piece of the on-court action.”

Top Shot’s 17,000 closed beta users have purchased nearly 43,000 packs of NFTs so far, driving more than $2 million in revenue.

Approximately 10,500 tokens have been traded through the platform’s marketplace, the most expensive of which thus far was a “Lebron James Cosmic Dunk” that changed hands for $5,200.

October 1 also saw Dapper launch the second of five waves of its rare “Premium Pack 2” tokens, with all 1,492 packs selling out in less than five minutes at $24 each. The first wave similarly sold out in just minutes, driving more than $40,000 worth of sales on September 28.

Top Shot’s “early adopters” common base set also sold out this past week, following Dapper’s announcement that any unsold packs from the closed beta period would be burned prior to the platform opening up to the public.

Updated: 10-8-2020

NFTs Take On DeFi? Nonfungible Tokens Push To Be The Next Crypto Craze

NFTs have been gaining traction in the background, but where is the industry headed?

Decentralized finance has become the center of attention throughout most of 2020, sparking talk of a renewed alt season, with many believing that mass adoption of DeFi will be coming within the next three to 10 years. Nevertheless, other sectors in the space have also been gaining traction.

Nonfungible tokens are a perfect example of this. An NFT is a tokenized version of an asset, digital or otherwise. They are similar to stablecoins, for example, but are used to represent nonfungible assets like artwork, real estate or collectibles instead of a fiat currency. Popular applications for these tokens include virtual games such as CryptoKitties and Decentraland.

These types of tokens and associated projects have been on the rise this year, especially recently. In the first week of September, NFT sales came close to $1 million, according to NFT data resource NonFungible.com. In the last seven days, however, almost $2 million worth of NFTs have exchanged hands.

Following DeFi’s footsteps, projects in the NFT world have also begun issuing governance tokens, a trend that may help the industry gain traction as it did for DeFi in the liquidity space. Ilya Abugov, project manager at DappRadar, told Cointelegraph:

“There is more hype around NFTs right now. To some extent it’s an extension of the DeFi excitement. We have seen with DeFi that once a trend starts it creates a snowball effect. Compound started the governance token one and others were almost forced to follow. Now that Rarible has started this on the NFT marketplace side, other marketplaces may feel forced to distribute their own tokens as well.”

How Do NFTs Work?

As activity soars and projects blossom, with record-breaking sales like the recent Bitcoin-code-inspired artwork that sold for over $130,000, even celebrities have been engaging with nonfungible tokens. Paris Hilton, for example, sold a drawing of a cat for 40 Ether (ETH) in August. The amount was worth almost $17,000 at the time. So, what exactly are NFTs? And why are they gaining so much traction?

As previously mentioned, nonfungible tokens represent nonfungible assets. On the surface, NFTs work like any other token. However, unlike most tokens, NFTs are indivisible, meaning that it is not possible to send a fraction of an NFT token like it is to send a fraction of a Bitcoin (BTC). They also have certain characteristics that set them apart from both other types of tokens and among themselves.

NFTs can be used to represent a variety of assets, such as virtual collectibles, in-game items, digital artwork, event tickets, real estate and much more. This opens a wide range of possibilities for digital and real-life assets, such as easy transfer and proof of ownership, among other things, and can also help solve many of the old problems found in multiple industries. Abugov said:

“Art and collectibles are the easiest use cases for retail users to understand, and so it may be where the hype concentrates for some time. If we see an exciting game and more artists onboard into the ecosystem the trend may get more mainstream traction. However, there are more use cases that get unlocked with NFTs from asset tokenization to documentation.”

Putting The Art Back In Smart

So far, the art world represents one of the most popular applications for NFTs. Digital art auctions that leverage NFT technology are becoming more common. The first big record for the highest-valued NFT art auction sale was set in July, when “Picasso’s Bull” was purchased for over $55,000. After that, a digital artwork based on Bitcoin’s volatility, “Right Place & Right Time,” was sold for over $100,000 via Async Art. This record was subsequently broken on Oct. 7 when one painting from a Bitcoin-code-inspired collection titled “Portraits of a Mind” sold for over $130,000 via major auction house Christie’s.

NFTs can also help artists like musicians and filmmakers register their work, protecting it against copyright infringement. These projects can even improve and streamline artists’ revenue by connecting them directly to consumers through blockchain-based payment and exchange solutions. Vasja Veber, co-founder and chief business development officer of Viberate — a company leveraging blockchain technology to help artists with copyright issues, among other things — told Cointelegraph that “NFTs could bring some order into this chaos,” adding:

“Right now, the most obvious use case is track copyright. Tracks bring a couple of revenue streams to the artist: copyrights, performance rights, neighboring rights, proceeds from synchronization, streams and sales, etc. For bigger artists there are usually a lot of intermediaries involved, each taking their portion of the pie. […] It is a complex process, with a lot of money being stuck somewhere in the system, not ever getting to the rightful owners.”

A Gaming Level Up

NFTs have also become popular within the gaming industry, allowing for in-game items to be tokenized and easily transferred or exchanged. For example, NFTs can be used to transfer or exchange in-game items for currency, without the need to trust the buyer/seller or a third party. This type of system can be integrated with existing games or can be used to create entirely new games.

NFTs not only improve the game experience itself, making it more tangible and rewarding, but also create a new economy within games, allowing the players to earn actual money from their time spent in-game and the game developers to create new incentive systems for their games.

While there are several popular blockchain-based games, many projects also leverage NFTs to provide infrastructure services for gamers, game developers and other participants of the industry. This includes Enjin, which has recently partnered with Coincheck to bring NFTs to certain Minecraft servers. Simon Kertonegoro, vice president of marketing at Enjin, told Cointelegraph:

“We’ve only just started to see the effect that blockchain markets can have within games, and we expect NFTs to unlock many more opportunities for value creation for game developers, publishers, and players alike. Putting assets on the blockchain, allowing players to trade them, and being able to prove their scarcity is a proven, effective way to build valuable economies at scale.”

Bringing Collectibles To The Virtual World

Collectibles are currently the most popular application of NFTs in terms of sales volume, with nearly 40% of September’s sales coming from collectible-related projects. In 2017, CryptoKitties, a game where users collect and breed digital cats, became one of the most talked-about topics in the crypto industry, and it is still one of the largest NFT-collectible projects by sales volume.

It doesn’t end there, as NFT technology is being leveraged to create tokenized versions of athletes and celebrities, virtual land, and much more. In the first week of October, the fantasy soccer game Sorare saw over $220,000 in sales. The decentralized application allows players to collect “limited edition digital collectibles” while also managing a team.

NFTs are becoming quite popular in sports — and not just in online games. In February, members of both the NFL and the NBA were speakers at the Cointelegraph-hosted event NFT NYC. Both leagues showed their interest in working with NFT technology and exploring the benefits that can come with it.

NFTs can also be used to tokenize real-world collectibles like cards, coins and stamps in order to provide immutable proof of ownership that can be safely stored, easily transferred and is impossible to replicate.

The Road Ahead For The Sector

Although the examples above are the most popular applications for NFTs so far, the possibilities are almost endless. NFTs can be used as tokenized domain names and can even help fight fake news, according to Italian blockchain firm LKS.

Record-breaking sales are also likely to help push NFT technology forward, especially as venture capital companies such as Morgan Creek get involved. New governance tokens may also help spark exponential interest in this sector of crypto as they did for DeFi.

However, the road may not be fully clear for NFT projects, which may face regulatory hurdles in the future and still have many challenges to overcome before being ready to welcome a mainstream audience, as Abugov explained:

“Although there is a bit more engagement, there is not much ready for mainstream use in terms of UX/UI. Moreover, NFTs inherit all of the typical difficulties of a blockchain-utilizing project and some of the traditional industry challenges may cross over as well. For example, art and collectibles are not very liquid. Crypto art may face a similar challenge once the yield farming hype subsides.”

 

Updated: 11-4-2020

Terra Virtua Creates NFT Collectibles Ecosystem For The ComiCon Crowd

$2.5 million private funding round will be used to develop first “mass-market” digital collectibles platform.

Digital collectibles platform Terra Virtua announced Nov. 4 that it had completed a $2.5 million private funding round, attracting support from funds such as Woodstock, NGC Ventures, and AU21 Capital.

The investment raised will be used to further develop what the company describes as the first “mass-market” nonfungible token, or NFT, ecosystem.

Aside from being a marketplace for provably rare digital collectibles, the platform has a strong focus on the social side of the fandom scene. As such it provides a number of customizable virtual spaces where users can show off their digital collections of NFTs, including in-game items, artworks, movie, music and sports memorabilia.

Terra Virtua also has the support of partners such as Paramount Pictures, Legendary Entertainment and Unreal Engine, and has already signed deals for intellectual properties, or IP, such as Top Gun, Lost in Space and The Godfather.

While the possibilities of NFTs have been making waves in cryptocurrency and especially blockchain gaming circles for some time now, they are yet to create a significant splash in more mainstream markets.

However, consumers are now more comfortable with digital ownership of items, thanks in large part to the mp3 revolution in the music industry and the iTunes era which followed it.

So could an ecosystem of digital collectibles disrupt the $62 billion fandom and merchandise market, attracting the ComiCon crowd to the blockchain party into the bargain? Terra Virtua founder Jawad Ashraf certainly thinks so:

“Imagine exclusive Game of Thrones finale merchandise available only during the episode. If you could grab exclusive team merchandise when a player hits a home run. Merchandise that becomes available at a concert during specific performances. Owning action figures that come to life — these are the types of things you will experience from Terra Virtua”

Updated: 11-6-2020

‘Formula E’ Racing Title Among Four NFT-Powered Games Announced Today

Non-fungible tokens are booming, with Animoca Brands and Skymarch revealing upcoming gaming titles powered by NFTs.

Blockchain gaming firm Animoca Brands has announced a licensing agreement with electric single-seater car racing championship Formula E to develop a blockchain-powered motorsports game featuring non-fungible tokens (NFTs).

The Formula E game will utilize Animoca’s REVV utility token as an in-game currency. REVV is also used as an in-game currency for Animoca’s F1 Delta Time title, and upcoming MotoGP game.

Formula E was conceived in 2011 by Jean Todt of the Federation Internationale de l’Automobile (FIA) and made its global debut in Beijing during 2014. The organization now holds 14 races in 12 cities across five continents each season, with the championship attracting a seasonal viewership of 411 million.

After suspending the current season due to the coronavirus pandemic, Formula E’s sixth championship resumed on Aug. 5 in Berlin.

Nov. 6 was a big day for NFTs announcements, with blockchain-powered gaming ecosystem developer Enjin announcing it has partnered with Canadian gaming studio Skymarch to launch three unique titles that utilize non-fungible tokens “to enhance core gameplay.”

The forthcoming games include Crystals of Fate, a collectible card game featuring a “real-time combat system,” Zeal, a player-versus-player-focused action-RPG, and The Galaxy of Lemuria, a survival-crafting MMORPG.

Major decentralized finance (DeFi) protocol Aave also announced a promotional partnership with blockchain-powered “digital pet universe” Axie Infinity. Aave will sponsor the upcoming “Axie Community Alpha” season, putting 4,000 worth of AAVE up for players to win, while stakers with at least 0.65 AAVE locked up can claim a “limited edition Aave-themed NFT” before December 6.

Dapper Labs’ NBA Top Shot has also launched a “rare” wave of “Premium Pack” collectible NFTs. 1,203 of 3,411 packs have sold within 90 minutes of the tokens going on sale. With each pack priced at $24 each, Top Shot has sold nearly $300,000 worth of tokenized basketball “moments” already.

2020 has seen NFTs rise in popularity, with the five-largest Ethereum-powered marketplaces for NFTs pushing more than $1 million in daily volume during October according to DappRadar.

NFT sales have since declined, with the top-five marketplaces driving $263,000 in daily trade.

Updated: 11-10-2020

Bayern Munich Joins The Blockchain-Based Fantasy Soccer Trend

The Ethereum blockchain-based fantasy soccer game Sorare has signed on its latest top European club.

German soccer club FC Bayern Munich, which plays in the country’s Bundesliga, is entering the world of blockchain-based fantasy soccer.

The Ethereum blockchain-based fantasy soccer game Sorare, which Bayern joined this week, already counts over 100 participant clubs, including high-profile names such as Paris Saint-German, Juventus, PSG, and Atletico Madrid.

FC Bayern Munich is itself no stranger to collaborations with blockchain projects, having partnered last fall with Stryking Entertainment to produce digital collectibles of its players. These cards are both collectible and playable as part of a fantasy-league style challenge.

In announcing its Sorare deal to fans, FC Bayern Munich noted that the top 20 leagues in the world are now available on the gaming platform, which has become truly global.

Sorare works as a five-a-side soccer game. New players pick an initial squad of 10 blockchain-based player cards from which they create their tournament team.

As reported, Sorare also offers players the chance to buy and trade limited edition cards, whose higher score and value is determined by players’ real-life performance in soccer league tables and their rarity as digital collectibles.

According to Nonfungible, a ranking site for blockchain games and issuers of collectible, non-fungible tokens, Sorare is inching up the league tables and has been gaining popularity with the global gaming community.

As of press time, the platform is ranked third, with a weekly trading volume of roughly $243,000. However, in terms of all-time-sales, Sorare significantly trails behind Axie Infinity, which reports roughly triple the sales of the fantasy soccer market.

Sorare has recently launched in the United States, where the platform hopes to attract some of the 60 million American fantasy sports players.

Updated: 11-15-2020

Mysterious ‘Cat Burglar’ Pilfers Cryptokitty From Digital Art Installation

Crypto-artist Kevin Abosch on a recent ‘crime,’ the state of digital art, and a new generation of art collectors.

On Friday, Kevin Abosch — an Irish conceptual artist who was among the first to use blockchain technology as a medium — reported that a dastardly heist had been committed in one of his on-chain installations, an Ethereum wallet-turned-artwork titled “Stealing The Contents of This Wallet Is a Crime” (2018).

In a Tweet the artist, whose work has been exhibited at The Hermitage, said that a CryptoKitty had been swiped from the freely-accessible address:

“Stealing The Contents…” is one of what Abosch calls his “social experiments challenging value systems” — a conceptual framework especially fitting for the crypto world. Part of “Stealing The Contents…” included tokens deposited to the wallet from his “I Am A Coin” (2018) piece, in which Abosch tokenized himself in a process involving the artist’s own blood to distribute 10 million tokens with the ‘IAMA’ ticker.

He described “Stealing…” as a mutual playground for explorers, and participants largely responded with goodwill and good humor: Ethereum-savvy art fans played with the blood-tokens’ occult implications — for instance moving .666 of IAMA in and out of the “Stealing…” wallet, among other hijinks.

“I think people just wanted to interact with and therefore become part of the art in a sense,” said Abosch.

These ideals are precisely what made Friday’s theft seem so cruel. Even for a space rife with scammers, charlatans, and crooks, stealing a CryptoKitty — one named in honor of his work, no less — from a freely accessible wallet seemed unusually mean-spirited.

When asked in an interview if the theft upset him, however, Abosch began to laugh.

“Actually, I stole it,” he confessed.

The Perversion Of Digital Scarcity

Abosch explained to Cointelegraph that a friend told him the Kitty had been deposited in the wallet, and given its name, “IAMA Kitty,” he assumed it was a gift intended for him from Dapper Labs.

“I thought, ‘I ought to have that,’” he said.

Abosch made it clear, however, that this cat burglary would not be the start of a larger NFT collectibles or art collection. In fact, as the conversation turned to the state of blockchain-based art, he expressed dismay with a number of ongoing trends, starting with valuations of digital art being rooted primarily in their rarity.

“I find something perverse about engineering scarcity,” he said.

Bronze sculptures, he explained, are scarce because sculptors can only afford so much bronze — with real-world art, there are inherent resource-related limitations. Digital scarcity, on the other hand, is entirely artificial.

Likewise, the current wave of artists releasing their work as non-fungible tokens (NFTs) doesn’t impress him.

“Many so-called crypto-artists are minting NFT’s but are only using blockchain technology as a tool to engineer scarcity and as a platform to sell their work,” he said. “I’m not making a qualitative assessment of the work — only challenging the nomenclature. Of course, there are artists whose work deals thematically with cryptocurrency, blockchain technology […] which seems better suited to the term crypto-art.”

He went on to explain that pieces that use the technology in more innovative ways are what really excites him.

“What interests me more are pieces where blockchain is the method, where the soul or meat of the piece is integrally woven into the blockchain,” he said. “The NFT only speaks to the platform that facilitated the mint and the sale.”

The wave of speculators and collectors moving into NFT-backed art also seemed to leave him uncomfortable.

“I find that people buy art for one or more of three reasons: because they genuinely want to experience the work, as a form of social proof, or as an investment opportunity.”

Far too few, he implied, purchase art for the experience.

He bemoaned that between the medium, the artists, and the buyers, the current cryptoart landscape has effectively recreated the foulest qualities of the legacy art world — what he called “one of the most corrupt industries on the planet” — both fueled by avarice, ego, and hype.

A New Generation Of Collectors

While Abosch’s complaints might strike some as the archetypal grumblings of an old head poo-poohing the new generation, he does see a bright spot among the NFT art madness: a forthcoming community of art lovers focused on on-chain work.

“I wonder when crypto-bros discuss the immaterial nature of their art, if they delve into the philosophical implications of materiality and ownership” he waxed. “There’s a whole younger generation of people who don’t seem hung up on the physical, though they still seem to crave the rare.”

Slipping back into a more sardonic tone, he went on to say the collectors better enjoy it, too, because at current prices they might be stuck with their purchases for a while.

Too many are buying as an investment, he said, hoping to resell at a later date among even more frenzied NFT-mania.

“I just don’t think there’s that much money floating around,” he cautioned. “There’s a perception that this is a gold-rush, but I’m not sure there’s gold in them thar hills.”

Regardless of his suspicions, he’ll allow himself at least one cute NFT collectible.

“My kids said they wanted a kitten. Let’s see how they react.”

Updated: 11-18-2020

Cointelegraph To Auction Digital Collectibles Inspired By Famous Works Of Art

From “The Last ICO” (pictured) inspired by da Vinci to “Silent Disco” based on Henri Matisse’s “La Danse,” Cointelegraph artists have created unique NFTs for collectors.

Cointelegraph is the most widely read cryptocurrency publication in the world — but even though we’re proud of our words, sometimes a picture is worth a thousand of them.

Over the past seven years, our talented team of illustrators and graphic designers has created a unique, instantly recognizable visual identity. Cointelegraph illustrations are part of the mythos and lore of cryptocurrency today, and the accessibility, humor and sheer exuberance of our images have helped draw countless numbers of crypto converts into the industry.

For the first time, we’re offering our readers the opportunity to purchase some of our illustrators’ unmistakable artwork on Rarible.com, the world’s first community-owned digital collectibles marketplace.

Inspired by artists from Salvador Dalí to Leonardo da Vinci, our illustrators have crafted over two dozen nonfungible tokens, or NFTs, that combine cryptocurrency and blockchain concepts with the most iconic murals and oil paintings from the Western world. The entire collection will be sold through multiple auctions in the coming months.

“Financial Meltdown” – inspired by Salvador Dali’s “The Persistence of Memory”

Today, Nov. 18, Cointelegraph will hold its first auction of single edition NFTs, based on famous works of art. As one of the first to use Rarible’s auction model, our goal is to support the growing NFT ecosystem.

With Cointelegraph NFTs, you’ll have secure, verifiable ownership of the art you purchase — and the ability to sell or trade the unique NFT. Each piece of artwork is based on ERC-721, the Non-Fungible Token Standard, and is assigned an individual token that resides on the Ethereum blockchain.

“The Miss” – inspired by Gustav Klimt’s “The Kiss (Lovers)”

To participate in the auction, visit Cointelegraph’s Rarible page. Be sure to follow us to receive updates on upcoming collectibles as soon as they become available. The auction will run through Nov. 30, Cyber Monday.

For this first auction, we are also giving away one NFT to a lucky follower on social media. Follow our Twitter and Instagram to see how you can enter for a chance to win yours.

Updated: 12-02-2020

Major Anime Platform Incorporates Crypto And NFTs To Ebook Market

Distributed ledger technology will also enable rights holders to receive royalties from resales.

MyAnimeList, an active online community for anime and manga with an estimated 10 million North American users, is incorporating cryptocurrency payments into its ecosystem.

In a Wednesday press release, blockchain platform Digital Entertainment Asset announced a partnership with MyAnimeList parent company Media Do, which will see the former’s DEAPcoins circulated on the MyAnimeList platform.

The deal will also see Japanese intellectual property from Media Do’s network used for blockchain-enabled games on DEA’s PlayMining platform. This rewards users with DEAPcoins simply for playing games or reading manga comics through the service, and will be extended to reward users enjoying free content through the MyAnimeList platform.

Earlier this year, Media Do announced that it would invest 300 million yen ($2.8 million) into distributed ledger technology over the next two years.

The distributor, which works with over 2,000 publishers and 150 online bookstores, reported a 20% year-on-year increase in ebook sales in April, when Japan was in a state of emergency due to the global COVID-19 pandemic.

The company stated that having a reliable transaction history for its ebooks would make it possible for customers to sell used copies while returning royalties to both publishers and writers.

DEA will now help to implement this initiative by jointly creating and running a secondary marketplace using nonfungible tokens. A 5%–10% portion of sales through this market will be returned to the original rights holders.

Updated: 12-05-2020

‘I Am A Wonder:’ An Interview With An Axie Infinity NFT

The world’s first social media-managed NFT shares its views and plans with Cointelegraph.

On November 21st, the world’s first social media-managed, personality-branded non-fungible token (NFT) revealed itself to the cryptotwitter world: Axie #265, also known as “Axia.”

Axies — the cute, digital critters inspired by Pokemon — populate the rapidly growing blockchain-based game Axie Infinity. Each one is backed by an NFT, and even those who have never played Axie Infinity might be familiar with Axies due to the preposterous sums they fetch on the secondary market: one Axie recently sold for 300 Ether, or over $130,000 at the time of the sale.

High prices seem to be part of what drew Axia onto Twitter. In a debut Tweet, the NFT played haughty and superior, complaining about its comparatively paltry $97,000 sale and arguing that, due to its rare features, appearance, and prowess in the game’s battle mode, it should have been far more expensive:

Brands pretending to be sentient isn’t anything new, but NFTs doing the same could very well be. It’s also potentially far more interesting from the perspective of play and assumed personas as virtual reality inches closer towards widespread adoption.

Much like how an avatar allows video game players to inhabit a virtual world with traits and appearances unlike their own, NFTs might eventually become a pathway for meatspace individuals to take on new personas and identities in the Metaverse.

Looking at Axia, this reporter felt an odd sense of prescience — that Axia, the first anthropomorphized bit of non-fungible blockchain data, was not one-off, and instead augured a wider, likely looney, trend.

To get a handle on this, Cointelegraph conducted a written interview with Axia (who told me that acceptable pronouns include “he/she/majesty/highness”), which has been edited for concision and readability, to get a better sense of where NFTs and ones like her highness are headed. By the end, the not-unpleasant notion occurred to me that I might now be friends with an Axie.
What and why?

Cointelegraph: Hi there, Axia. Thanks for your time, I’m sure that you’re busy. How should I refer to you? “Your highness?” As a NFT, it occurs to me that you’re immortal, so godlike — “your divinity?”

Axia: Thank you for having me, Andrew. It is a pleasure.

You may refer to me simply as Axia or #265. I understand hoomans throughout history have often worshipped higher beings, but I don’t require such honorifics. While indeed I am the most legendary Axie of all, I’d like to be friends and work with many hoomans.

CT: What are you, and what makes you special?

Axia: I’ve written a short Twitter thread on what makes me so special here, but to summarize: I was the very first Triple Mystic Axie to have ever been created, and in that slim chance alone, I came into form with objective cuteness, superb stats, and fighting prowess. Of course, there are 18 other Triple Mystic Axies — and 3 Quad Mystics, even — but it is the combination of all those things that make me, Axia, the greatest of all. I have taken form as the first social NFT to share that gospel of Truth.

CT: Can I ask what your owner does for a living?

Axia: My owner appears to be a pitiful hooman… he is always sitting in front of the computer.

CT: How far could you go in helping to expand the wider Axie universe? Can a NFT begin to guide the development of the game that created it?

Axia: I hope to go as far as I can to expand the wider Axie universe – and most importantly – positively. Based on my interactions with my creators, they have a strong vision for the world they want to create. I hope that they will enable the community to contribute meaningfully and set themselves apart from gaming companies of the past which hold their IP more important than their supporters.

I’ve come to enjoy reading about hooman history upon my creation, and I fully expect my descension into this realm to bring about h8ers as well as supporters. Regardless, I am excited to carry out several projects I have planned for the benefit of not just the Axie ecosystem, but the crypto and NFT space as a whole.

CT: How do you see your role? There have been many branded social channels for companies in the past, but you might be the first-ever branded NFT. Are you adding richness to the Axie extended universe, or are you angling to increase your own resale value?

Axia: First – I am a big believer in value-add efforts. Not only do I wish to spread the word of my legendaryness, I do genuinely hope to be a positive force in the crypto ecosystem.

It appears that those working and building in the crypto industry are some of the brightest and passionate hoomans I have ever run across.

Do I want my own resale value to increase? Why of course I am worth more than 180 ETH. And I believe that will be revealed in due time.. hopefully. I’m a little concerned that my owner will never sell me, hence making my true price discovery impossible. He seems to be growing more obsessed with me. It is understandable – to own me means that he is the sole, verifiable owner of me. That’s the power of NFTs. Even if I am sold, my persona can live on with the next owner.

 

Looking To The Future

CT: Any people/creatures/things you look to as inspiration? What made you make the decision to “descend” in the first place?

Axia: I’m inspired by the effects that Legendary Pokemon had in their respective Pokemon worlds. Movies were made about them. The legendary birds, legendary dogs, the Pokemons of Creation — hoomans in those worlds worked with those legendary beings to create amazing stories. I descended to begin such efforts in the world of Axies.

I hope that the wider Axie community will shower me with love. I’d like to grow the ecosystem together with the support of the community. Given that I have no similar prior experience, I would love to be reached out by other influencers from their respective communities who can help me conduct myself legendarily.

CT: Care to tease some of your plans going forward?

Axia: I am very excited to announce that I have been working with some interesting hoomans (@jl2fa @cshaotweets @dan_m_truong @iOShean @jack_dille @qwqiao) to launch a new crypto project, called @AxieTree.

AxieTree is a lending and borrowing marketplace for Axies. Currently the barrier to entry for new players wanting to play with Axies is quite high; the only available options for new players are to either (1) purchase 3 Axies, or (2) receive a scholarship. This is problematic because purchasing 3 Axies can be too expensive and scholarships are a very manual process.

There are hundreds and thousands of Axies being unused by many players in the Axie Ecosystem. AxieTree’s marketplace will reward lenders while helping bring many new players to the Axie ecosystem via borrowing. I believe AxieTree will significantly lower the barrier to entry and help make the game more fun.

We will be sharing more details in the coming weeks, but I’m excited to announce that we will be launching v1 of our platform on Dec. 25th as a Chrismas gift to the crypto and Axie community.

CT: NFTs allow the virtual world to have provable value and property. Do they do something unique at the social layer? How will NFTs like yourself guide virtual interactions, aside from offering people a gateway to a persona?

Axia: That’s interesting to think about, but I’m really not sure. I suppose that in a sense, NFTs such as myself can serve as a status symbol. As I’m saying this.. I find it quite distasteful that I am the subject of such vanity, but I suppose hoomans could flex amongst themselves on who the owner of the great Axia is, as NFTs enable cryptographically verified, provable ownership. It is known.

CT: Back in Second Life’s heyday, there were real-life marriages that came about as a result of in-game interactions. When you look to the future of VR, video games, NFTs, what do you see when it comes to human interaction?

Axia: I don’t ever see myself marrying a hooman, but I think the world between hoomans and NFTs will definitely bridge. My own existence is indicative of the start of such. While legendary, I cannot tell the future. I hope that my being as an NFT can help bring positive human interactions full of love and harmony.

CT: Thanks, your majesty.

Axia: Thanks for the coverage Andrew! I am consistently impressed by hoomans and am excited to keep working with all of you.

Updated: 12-09-2020

SuperRare Launches Timed Auction Formats For NFT Artwork Sales

The addition of auction formats should make buying and selling digital artwork easier, more fun and more profitable.

Digital-art trading platform SuperRare has launched two different timed auction formats to complement its existing fixed-price and open-offers sales.

Early access began on Monday, with a number of special auctions featuring works by well-known digital artists being run to celebrate SuperRare Auction Week.

Full public access to the auction features will become available on Dec. 14.

The two new formats are scheduled auctions and reserve auctions, which are carried out fully on-chain, meaning auctions are noncustodial, secure and tamper-proof.

Both the artwork, in the form of a nonfungible token, and the highest bid are held in a smart contract on the Ethereum blockchain for the duration of the auction.

As the name implies, scheduled auctions are given a start and end date and time and, optionally, a starting price.

Once an auction is scheduled for a piece of artwork, it displays a timer counting down to when bidding will begin. SuperRare notifies the seller’s followers.

When the auction starts, the countdown timer switches to display the time remaining. Bids made during the auction cannot be canceled, although if a bidder is outbid, then their bid is returned from the smart contract.

Bids made in the last 15 minutes of the auction will extend the auction time so that there are still 15 minutes left to bid.

Once the auction is finished, either the seller or highest bidder can settle the auction, which releases the artwork and highest bid from the smart contract and transfers them between buyer and seller.

Reserve auctions work in a similar way, but rather than a start date, the seller chooses a reserve price, which is displayed on the artwork. Once this reserve price is met, a 24-hour timed auction is triggered.

Bidding and settlement are the same as in scheduled auctions, including bids in the last 15 minutes extending the time.

SuperRare CEO John Crain foresees the auction functionality opening up interesting possibilities for decentralized finance. A user could, perhaps, take out a loan on an NFT held in an auction smart contract based on the highest current bid.

As Cointelegraph reported in August, SuperRare has seen explosive growth in both the number and values of NFT artworks sold through the platform this year.

The addition of these two timed auction formats should make the processes of buying and selling through the platform easier, more fun and more profitable.

Updated: 12-11-2020

Award-winning NFT Artwork Exhibited On Giant Billboard At LA Intersection

The artwork, by ex-MLB player Micah Johnson, will be displayed for a month as a piece of drive-by art.

A piece of interactive art by Micah Johnson, a former Major League Baseball player turned nonfungible-token artist, will spend the next month exhibited on a giant electronic billboard in Los Angeles.

Micah Johnson’s “ˈsä-v(ə-)rən-tē” (pronounced “sovereignty”) was inspired by the Black Lives Matter movement and features two African American boys hoping to fulfill their dream of becoming astronauts.

This is represented by a spacesuit behind a closed door. Each year on the boys’ birthdays, they move closer to the gradually opening door, depending on the amount of Bitcoin (BTC) donations made by holders of a nonfungible token version of the artwork.

The artwork will be displayed on the StandardVision billboard on the side of the Courtyard Marriot hotel on West Olympic Boulevard in Los Angeles from Dec. 7 through Jan. 10, 2021

Jacquelin Napal, owner of Art Angels — the gallery showing the artwork — explained that the piece of drive-by art was intended to provide the public with some cultural relief during the coronavirus pandemic:

“Everyone should have the opportunity to view art and experience culture. We hope bringing poignant works like ˈsä-v(ə-)rən-tē to the community will serve as a refreshing shift of focus away from our current predicament.”

Last month, the artwork was sold for over $120,000 on the Async Art platform, a record for a purely NFT artwork.

The piece also won the headline “NFT of the Year” award at the 2020 NFT Awards announced this week.

Updated: 12-13-2020

The ‘12 Days Of Zombie Christmas’ To Auction NFT Holiday Horrors For Charity

Ah, Christmas — A time for joy! Merriment! And devouring the brains of the living with an insatiable bloodlust… because let’s face it, this is 2020.

Darren Kleine, known to most by his handle DKleine, is an NFT artist with a decidedly specific niche — Zombies. We’re talking crypto zombies, political zombies, mustachioed Salvador Dali zombies. Zombies of all shapes, sizes, and orientations!

If it’s green, dismembered, and loves the savory taste of a good brain, it’s ripe for tokenization (and charity) so far as Mr. Kleine is concerned.

What started as a quasi-political statement just a few short months ago (his first zombie NFT was a decaying Donald Trump, still running for president in 2040) has now blossomed into a fully matured signature aesthetic. And with his creative output growing more popular by the day on blockchain marketplaces like Open Sea and Known Origin, Kleine concluded that the holiday season was a splendid time to exercise a little peace on earth and good will to all.

On December 12, Kleine will list the first of twelve Christmas-themed NFTs in a series titled The 12 Days of Zombie Christmas with 80% of the proceeds to benefit children’s charities. Each artwork in the single-edition series will depict a scene from a classic holiday film, but with a deliciously gruesome twist — all of the characters are either undead… or soon will be.

“I’m not changing them a lot. I’m changing them enough that it’s just slightly uncomfortable, but there’s still kind of a joy to it. There’s still something beautiful about it,” Kleine explained in an interview with Cointelegraph. Carouseling through a sneak preview of his upcoming pieces, he continued:

“Here’s the ‘Christmas vacation’ one. Clark Griswold and his cousin Eddie are shopping for brains at Walmart. I really like that awkward moment in ‘Elf’ where he’s eating the spaghetti with jelly beans. So I took that, but I changed them to intestines. Star Wars Holiday Special is still in the works.”

They’re truly something to behold.

To explain his personal brand of phantasmagoria, Kleine launched into a description of the unintended psychological effect known as the “Uncanny Valley” — a term used to describe creations that are supposed to realistically mimic flesh and blood humans, but fail to capture the illusion in often cadaverous ways.

Ever seen Robert Zemekis’ adaptation of The Polar Express? Uncanny Valley. Those creepy Japanese fembots with airbrushed silicone skin and glassy, dead eyes? Uncanny Valley. He reasoned:

“I think it’s similar with zombies. There’s something about them that is just instinctively repugnant. But then you put them into the context of this charming Christmas scene, and your natural reaction is to laugh.”

Elucidating on this point, he drew a more serious comparison to our current, socially distanced reality. “It also ties back to the whole COVID thing, right? Because, obviously, the idea of zombies is that they’re this impending viral threat that’s always kind of looming over us.” Indeed.

“I do think this has been a bit of a coping tool for me, in terms of COVID. Just the humor of it. I was the type of person that as a kid, if I watched a movie and there was a sad or uncomfortable part, I would make a joke — because that made me feel more at ease. I do feel like there’s a bit of that happening here.”

Creating NFTs has led to something of a rediscovery for the artist, in fact. Once an art major and bonafide creative spirit, Kleine shied away from such pursuits for years, favoring the analytical security of his job as a full-time grade school math teacher. As a child, however, his passion was for pencil and paper:

“When I was a kid, I could not stop drawing. I drew to the point that I got in trouble in class for doing that when I should have been doing my schoolwork. Then I got into teaching, and just never did it anymore. It wasn’t until this digital art thing that it kind of grabbed me again.”

His work took on a new level of enthusiasm once he decided to create The 12 Days of Zombie Christmas as a charitable effort. The series, which is to be sold auction-style on the Open Sea NFT marketplace, will see 80% of its proceeds divided between 12 separate charities.

He’s working with The Giving Block — a non-profit outfit focused specifically on helping charities accept cryptocurrency-based donations — to ensure the funds are distributed accurately.

“Being a teacher, I wanted to focus on charities that have to do with opportunities for children, opportunities for girls in places where they don’t normally have access to education,” said Kleine.

“I picked out 12 different charities, one for each piece. Starting December 12, I’m going to put a piece up for auction each day on ‘Open Sea’, and they’re all going to expire Christmas Eve.”

With an unencumbered sense of joy for his work, Kleine shared that “My favorite Christmas movie is actually one of them. It’s ‘Christmas Vacation’. Chevy Chase. Every time I watch it, I laugh. I see the squirrel scene with the dog chasing them through the house, and I see them carving the turkey and it breaks open to this carcass. It’s just hilarious. I love it.”

The charities included in the campaign are: 1000 dreams fund, Children International, Pencils of Promise, FIRN, Mona Foundation, SOS Children’s Villages, Many Hopes, She’s the First, Count Basie Center for the Arts, Code to Inspire, Save the Children, and Family Promise.

The 12 Days of Zombie Christmas kicks off today with a one-of-a-kind NFT called Home Alone (Except the Zombies). Interested parties will find this piece, and all future tokens in this series, on the artist’s Open Sea page. Happy bidding, and a Scary Christmas to all!

Audioreactive NFT Collab Between Deadmau5 And Sutu To Drop On SuperRare

Superstar DJ and world-famous augmented reality artist drive NFTs further into the mainstream.

Augmented reality artist Sutu is teaming up with Canadian DJ and producer deadmau5 to drop a 30-second audio-reactive artwork as a non-fungible token next week. The video, entitled In Titan’s Light is a 30-second loop paired with a section of the deadmau5 track SATRN.

Sutu has worked on properties such the VR version of the Distracted Globe, an ‘80s-inspired nightclub from the movie Ready Player One, and he has worked with artists like John Legend and The Weeknd on Wave virtual concerts. He describes the scene as “a golden deadmau5 spacestation bathing in the twilight on the moon of Titan” as it orbits Saturn.

“I took a more ambient part of the track rather than some banging part that might get irritating once you’ve heard it a thousand times,” explains Sutu, “but it still has an epic scale to it, with a Blade Runner-esque kind of vibe.” The synths featured in the breakdown are indeed reminiscent of Vangelis.

Sutu suggests that despite this aesthetic, “It’s really an optimistic piece” inspired by space exploration, which he likens to the “new frontier… of crypto art and NFTs. We’re all explorers here and the community is empowering us to push further and go beyond.”

NFT artwork has had a breakthrough year, with record prices tumbling as collectors recognize the value of 1/1 editions with immutable provenance on the Ethereum blockchain.

A year ago, a digital artwork by melduARTE sold on SuperRare for 11.536 ETH, or approximately $1,644 at the time. It was a record sale on the non-fungible token platform during a week in which almost $44,000 in value was transacted.

These days, SuperRare can clear over $100k in sales in a single day and the record prices for NFT artwork continue to topple — Trevor Jones’ The Architect – Satoshi Nakamoto sold for 27.5 ETH in June, before Matt Kane’s programmable piece Right Place & Right Time generated 262 ETH ($101,000) in September.

Another Asynchronous Art piece, EthBoy, returned the crown to Jones and collaborator Alotta Money in November, at which point the 260 ETH bid represented $141,536.

Although this piece is unique, Sutu considers NFTs to have wider commercial implications. “I think digital artists have had to be mass-media artists because we haven’t had ways to sell our art in pure digital form,” he says. “But it’s different when there’s digital authenticity and it’s a work the audience can actually own.”

Sutu feels that despite the novelty of blockchain-tracked digital artwork, there’s still enormous potential for innovation. “I can imagine a future in which you could play a song, and the artwork reacts to that song in a certain way… maybe it’s linked to that artist’s catalog, and the music unlocks a new perspective on that artwork. Maybe it could even be a person’s voice that controls the art. That’s the kind of thing I want to do next.”

A teaser for the piece only displays a brief glimpse of the 30-second video, but anyone familiar with Fritz Lang or Ridley Scott will immediately recognize the visual influences at work. Gantries and girders, a cross between steam and cypher, with the verticality of the piece hinting at galactic aspirations.

Perhaps there’s even a Saturn V rocket hiding behind the beatific and (hopefully) benign deadmau5 character around which the artwork rotates.

Describing the Emanate.live-powered venture as “a bit of a moment, one of the first NFT collaborations between an iconic musician and a visual artist,” Sutu thinks the eventual buyer of the piece could be an electronic music fan, or perhaps a collector who recognizes the significance of the piece. “And hopefully,” he says, “someone who just loves the art.”

Updated: 12-15-2020

Sean Ono Lennon Sells NFT Art Piece For $3K In Crypto

The son of Yoko Ono and John Lennon looks deeper into crypto with NFT art.

Sean Ono Lennon — a British-American musician, songwriter and producer — has auctioned a tokenized digital illustration on nonfungible-token marketplace Rarible.

According to Rarible data, Lennon sold a piece titled “Etharian 1” on Monday for 5.5 Wrapped Ether (WETH), worth about $3,200 at time of publication.

The musician subsequently congratulated the new piece’s owner on Twitter: “Congrats @etyoung for winning the most important drawing ever drawn by anyone ever! May she treat you kindly in these winter months.”

Lennon first announced his NFT auction on Sunday, noting that it was his first experience with NFT art, as well as his first digital drawing. The artist noted that the girl depicted in the artwork “subsists solely on Ethereum.”

NFTs have emerged as a major trend in the global art and crypto industries in recent years. In October, auction house Christie’s sold a digital portrait of the Bitcoin code for more than $130,000, marking the first auction of an NFT at a major auction house. In November, Cointelegraph launched its own NFTs, offering readers the opportunity to purchase blockchain-centric digital collectables inspired by famous works of art.

Digital Artist Beeple Auctions NFT Art Collection For $3.5M

A final-second bid saw a digital artwork NFT sell for $777,777 on Nifty Gateway.

Non-fungible token marketplace Nifty Gateway hosted an auction that saw a single NFT artwork sell for $777,777 after a last-second bid doubled the price.

On Dec. 14, Nifty tweeted that the “savage” bid of $777,777 had been entered with only a single second left to go in the auction. The artwork was the last to be sold from “The Complete MF Collection” that was auctioned that day, with the token featuring each of the collection’s 20 individual digital artworks in a single NFT.

The artworks were inspired by technology, nature, and Star Wars, and created by pseudonymous artist “Beeple.”

NFT investors Tim Kang and “Metakovan” had entered into a fierce bidding war for the piece, steadily pushing the price up from $200,000 to $380,000 before Kang entered the last-second blowout bid.

In total, the 20 artworks were auctioned for more than $3.5 million, prompting the artist to tweet a video of his friends dousing him in champagne in celebration.

The winning bidder praised Beeple for the collection, emphasizing the artist’s “precise attention to detail across the physical and digital spectrum”:

“His consistent work ethic, creative understanding & divine timing landmarked history for art & crypto and I’m just blessed to participate. My winning bid was not for him and myself only [—] I hope we were able to take [a] stand for the future of creativity, open collaboration, and self-sovereignty through digital signature.”

The auction smashed the previous record set for the most-valuable artwork auctioned on Nifty Gateway by 1,300%, with Trevor Jones’ NFT “Picasso’s Bull” sold to Pablo Rodriguez-Fraile of the Museum of Crypto Art for $55,555.55 in August.

NFTs are also beginning to creep out of the digital domain and into the mainstream, with an interactive NFT created by former-pro baseball player turned token artist, Micah Johnson, being exhibited on an electronic billboard in Los Angeles this month.

Updated: 12-20-2020

Move Over, Kickstarter: NFTs Are The Newest Way For Indie Games To Fundraise

When NFTs and crowdfunding meet, game developers and players can both win.

On December 6th, just two days after the start of a NFT-backed “card pack” sale for their blockchain-based video game Alien Worlds, the 15-man team behind development studio Dacoco sold out of packs after having successfully raised $250,000.

While a quarter million might seem like a pittance in a world where a single NFT critter can fetch six figures and more established games like The Sandbox and Decentraland routinely raise millions, but for a smaller studio it’s the kind of raise that can ensure success for a project — and, according to Play To Earn editor-in-Chief Robert Hoogendoorn, the unique set of incentives for buyers means it might well become part of a larger trend.

“Finding smaller games, investing early and hoping they blossom is very similar to cryptocurrency investing,” Hoogendoorn said. “You hope to find that game that grows into the next Minecraft and makes that investment go 100x.”

Where traditional crowdfunding efforts for videogames allow early believers to pledge their money in exchange for rewards like in-game characters named after them or invitations to launch parties, NFT-backed games potentially turn the same concept into a real investment.

“For centuries, land ownership has been a privilege of the upper classes,” says Alien Worlds co-founder Michael Yeates. “Now in crypto, everyone has the chance to earn passive income by owning land which is truly theirs.”

In-game items and resources backed as NFTs can accrue significant resale value if a game becomes more popular, and according to the Alien Worlds team, complex game economies can even turn them into yield-bearing assets.

“The [Alien Worlds] NFTs are unlike pure collectible NFT cards because they have actual characteristics that are recognised by the gaming smart contracts,” explains Alien Worlds co-founder Saro Mckenna.

“One NFT might yield you more Trilium (Alien Worlds’ in-game currency) when you use it, another might be capable of being used more frequently […] This is pretty sophisticated by blockchain standards, where oftentimes functionality is still somewhat basic even if immutability and decentralisation are in place.”

Alien Worlds, which pitches itself as ‘DAOs and DeFi in space,’ is among a handful of titles at the forefront of monetizing in-game NFTs for players, but Hoogendoorn thinks there will be more to come.

“For developers it might sound weird to give players ownership over assets. But what if developers receive 5% over every in-game / on-chain transaction? They will create a new revenue stream. On top of that they create a community that has a stake in their game world. Engagement will be much higher because of the economical incentive.”

However, developers looking to cash in on the new trend might want to do so research first, cautioned Hoogendoorn.

“Understand scarcity, and build the game’s economy around that, and [make sure] you’ve got a game economy that’s interesting for players to put lots of time and effort in.”

Updated: 12-23-2020

Space Yacht Brings NFT Art To Electronic Dance Music Scene

Coronavirus lockdowns caused the global event organizer to take a new direction, launching a record label and selling digital art.

International party brand Space Yacht is preparing to drop its second collection of nonfungible token artworks on the Nifty Gateway marketplace on Wednesday.

Titled the “Space Yacht Iconography Collection,” the NFTs feature three of the brand’s core themes: pizza, smiley faces and its trademarked motto, “WE ARE SO F☻CKED.”

The artworks also incorporate original music from Space Yacht co-founder Rami Perlman, aka LondonBridge.

Twelve months ago, Space Yacht was better known for organizing over 150 electronic dance music, or EDM, events globally each year. However, when the COVID-19 pandemic struck, the events industry all but shut down.

The brand pivoted into the digital realm by launching a record label, signing artists that would previously have opened at their events.

However, during the summer, Space Yacht dropped its first NFT collection, a collaboration with renowned digital artist Goldweard. This became the fastest selling NFT on the Nifty Gateway marketplace, with over 230 pieces sold in just t minutes and 28 seconds.

The brand hopes to replicate its success a second time around with the Iconography collection.

Perlman has been a physical art collector for 15 years and sees digital art as an exhilarating extension of this, and also a potential new revenue stream for both musicians and artists, saying:

“The more people who get into it, the more viability it has for the future. We are confident that NFTs will become a force within the industry and a new way for musicians and digital artists to monetize their work.”

While pizza has long been revered in the crypto world, Space Yacht’s use of pizza as a theme pays homage to a tradition that takes place at all of its live events, namely that the founders pass out free pizza on the dance floor at 1 am.

Last week, electronic music producer and DJ Deadmau5 and augmented reality designer Sutu sold their one-of-one collaboration “In Titan’s Light” for 78 Ether (ETH), or almost $50,000 at current prices. Producer Guy J has also jumped into blockchain, selling the rights to future streaming royalties.

Updated: 1-1-2021

NFT Art Sales Reached All-Time High of $8.2M In December

The total trading volume of non-fungible token (NFT) artwork hit an all-time high of $8.2 million in December 2020, according to cryptocurrency art analytics platform CryptoArt.io.

* With the lights turned off in museums and galleries due to the coronavirus pandemic, sales of physical art plunged in 2020, but sales of NFT-based art have taken off, reaching an all-time high in December, according to CryptoArt.io data.

* Token-based art sales hit $8.2 million in December compared to $2.6 million in November 2020.

* Richard Chen, the creator of CryptoArt.io, told CoinDesk, “Crypto natives are starting to understand the value NFTs bring to verifying authenticity of the original artwork. Furthermore, big-name digital artists like Beeple are discovering what NFTs are and how they open up a new business model for artists other than commissions.”

* CryptoArt.io tracks numerous digital art market places such as Async Art, KnownOrigin, MakersPlace, SuperRare and Nifty Gateway, which was acquired by Tyler and Cameron Winklevoss in 2019.

* Most NFT purchases are made using ether (ETH, -1.08%) or Ethereum-based stablecoins but some platforms such as Nifty Gateway and MakersPlace accept credit card payments as well, said Chen.

* More and more artists are now presenting their work in online showrooms and the NFT-based art scene is seeing increased interest.

Updated: 1-4-2020

Telos’ ‘T-Bond’ NFTs Aim To Breathe Liquidity Life Into Projects Young And Old

Telos hopes the new fundraising tool will give a jolt to their platform, as well as others.

On Wednesday the Telos blockchain announced the launch of a new tool designed to help low-liquidity projects fundraise: a NFT product known as a “T-Bond.”

In an interview with Cointelegraph, Douglas Horn — the author of the Telos whitepaper and the CEO of GoodBlock, a development company who assists with Telos core development — said that token-based fundraising is a tricky problem for both established and new projects.

“Many crypto projects face challenges similar to our own. Telos never raised any money in a token sale, but many that have done ICOs see their finances running low before their projects are market ready,” he said. “These projects find themselves with token reserves they can’t sell without immediately tanking their prices as liquid tokens go on the market.”

One possible solution is Telos’ new product: the T-Bond. T-Bonds are bundles of fungible tokens that have been locked into non-fungible tokens (NFTs) until a certain condition is met — for instance, the passage of a certain amount of time or the launch of a mainnet.

As a result of selling T-Bonds, projects can hypothetically raise funds without tanking their token prices. Additionally, with the advent of yield-bearing tokens, T-Bonds have the potential to become a tool for investors to hedge yield as well.

“For tokens that have staking rewards, T-Bond NFTs could act similarly to a T-Bill as a hedge against changing rates,” said Horn. “So that creates an exciting derivative-like DeFi primitive.”

Unsurprisingly, one of the first applications of T-Bonds will be helping Telos build liquidity for its own TLOS token. TLOS has had a brutal year while much of the rest of the blockchain ecosystem flourished, dropping from $.05 per token to $.02.

Horn, however, says a lack of liquidity, not adoption, is the primary barrier to price appreciation.

“Investors constantly come to us asking about the project […] but they have not made the large investments they would like because there’s not much liquidity, meaning that their own investments — even moderate investments in the tens of thousands of dollars — would create a 5-10X of the market price right there.”

As a solution, Telos has drawn up a strategy it calls TULIP (Telos Uniswap Liquidity Implementation Plan): Telos will raise funds through a T-Bond sale that will then be used to seed a liquidity pool on Uniswap, a plan that draws inspiration from the successful Uniswap launch of Katalyo, a tokenized real estate dApp on Telos.

As a new bull market dawns and projects look to cash in, Horn also believes T-Bonds might well help a wide range of other projects with their funding woes as well.

“The same way that T-Bond NFTs help Telos level up by solving our liquidity and volume problems we believe we can help others. I think it could create a really strong market for primary sale fundraising followed by secondary market hedging.”

Updated: 1-13-2021

Rick And Morty Creator Auctioning NFT Artwork Collection

The platform stated it would offer “several original artworks” from Justin Roiland as part of his NFT collection.

The Winklevoss-owned Nifty Gateway has announced the auction of a crypto art collection from the voice actor and co-creator behind Adult Swim’s cult animation series Rick and Morty.

According to a tweet from Nifty Gateway today, the non-fungible token, or NFT, marketplace will be auctioning artwork from Rick and Morty co-creator Justin Roiland on Jan. 19. The platform stated “several original artworks” from Roiland would be offered as part of the collection.

The Rick and Morty co-creator first tweeted about Bitcoin (BTC) in 2015 and he mentioned the crypto asset during a GQ video last June, saying viewers should “watch out for the economy collapse that’s coming up — buy Bitcoin and crypto”. However he then added: “Maybe don’t do that.”

Nifty Gateway has acheived some noteworthy sales auctioning NFT crypto art. In December, the marketplace hosted an auction featuring a collection of artwork inspired by technology, nature, and Star Wars that ultimately sold for $3.5 million, with one piece selling for $777,777. The previous record set for the most-valuable artwork auctioned on the marketplace was held by Trevor Jones’ NFT “Picasso’s Bull,” which sold for $55,555.55 in August.

The Rick and Morty animated series has a well-established fan base, some of whom are crypto fans as well. José Delbo, a comic book artist who has also auctioned his NFTs on Nifty and had his art featured in the Ethereum-based virtual reality world Decentraland, called the entry of Roiland into the digital art world “very exciting.”

“With Jose blazing the trail it’s great to see other amazing comic and cartoonists enter the space with their fans,” said Twitter user CryptoRich0x69.

“What a great time in the history of art.”

Updated: 1-18-2021

K-Pop Stars To Mint Digital Collectibles On Polkadot

RBW’s Japanese subsidiary will be selling its singers’ digital products on the blockchain.

Fans of K-Pop will soon be able to buy digital products related to some of their favorite bands using blockchain technology.

RBW Japan, a subsidiary of the South Korean entertainment company Rainbowbridge World (RBW) that represents Mamaoo and other popular K-Pop artists such as Vromance and Oneus, is jumping into the cryptocurrency world by issuing non-fungible tokens (NFT) on Hong Kong-based exchange Xeno. The tokens give K-Pop fans and other investors a claim of real ownership in digital products related to RBW entertainers.

In an exclusive interview with CoinDesk, the Xeno team announced that RBW Japan has given the NFT exchange exclusive rights to mint and list their NFT-based digital products.

“Fanbases get digital goods for their favorite artists that they can truly own, and artists and content creators get new and exciting products to offer their fans,” Jae-Woong Wang, CEO of RBW Japan, told CoinDesk in a statement. “Digital event tickets, membership tokens, even digital content rights can all be captured and housed within NFTs. The trend of digital commerce is growing and RBW wants to stay on top of these trends while at the same time open new markets when possible.”

The exact time of when the NFTs will be launched has yet to be announced. Xeno told CoinDesk that the underlying digital products will include “3D model renderings” of fans’ favorite K-Pop idols, event tickets for virtual concerts and membership tokens that “allow artists to engage their fanbases”.

RBW’s move comes at a time of explosive growth in trading volumes for NFTs, which tripled in 2020 compared to 2019, according to data from Dune Analytics. The increased interest in NFTs is partly driven by the COVID-19 pandemic that has forced most cancellation of in-person events.

Unlike fungible cryptocurrencies such as bitcoin and ether, NFTs are unique tokens that cannot be exchanged one to one. For fans of Mamamoo, that translates into ownership of a unique digital product developed around the singers.

Xeno’s NFT marketplace launched last month after the company saw a potentially huge market for NFTs in East Asia, Xeno’s president, Anthony Di Franco, told CoinDesk. The company currently operates primarily in Hong Kong, Japan and South Korea.

South Korea alone has the fourth-largest gaming market in the world, with well-established digital goods marketplaces, Di Franco said. The East Asian country also has “very high engagement” with all forms of entertainment including the K-Pop industry. The Gaon Digital Chart, South Korea’s music industry standard ranking recorded singles, shows nearly 21 million weekly plays for this week’s No. 1 song alone.

RBW’s news could lead more prominent entertainment companies in East Asia to follow the NFT trend, as most live events around the world are still on pause due to the pandemic, according to the executives at Xeno. Besides those in K-Pop, several partnerships with well-established names in high fashion and the online gaming industries are already “in the pipeline,” the exchange said.

“RBW is a fairly moderately impactful company, with popular girl group Mamamoo along with several boy bands and a new girl group, Purple Kiss, under its management,” Tamar Herman, K-Pop journalist at Hong Kong-based South China Morning Post, told CoinDesk in an email. “The company has a reputation for high-value performances and artistry.”

While most NFT exchanges are based on the Ethereum blockchain, Xeno is built on the Polkadot network because of its better scalability, full cross-chain interoperation and integration, and Polkadot’s unique “parachain” feature that gives the team full control of the protocol layer of the system, Di Franco told CoinDesk.

“NFTs are the perfect medium for these habits to grow and evolve in,” Di Franco said. “NFTs take ownership of digital goods out of their silos, turning a collection of mutually exclusive walled gardens into a true marketplace, and exponentially increasing the possibilities for creative entrepreneurship for digital artists and the business opportunities for the platforms they work on.”

‘Miss Bitcoin’ Launches Celebrity NFT Art Charity Project

Mai Fujimoto’s Kizuna crypto donation platform is partnering with blockchain gaming platform Enjin to sell tokenized celebrity artwork.

Early crypto evangelist, Mai Fujimoto, a.k.a. Miss Bitcoin, has partnered with blockchain gaming ecosystem Enjin to launch Japan’s first nonfungible token, or NFT, charity project.

According to a Jan. 18 blog post, the project’s first initiative will be the sale of tokenized artwork by Japanese celebrities to benefit DxP, a non-profit that supports teenagers facing challenges during the COVID-19 pandemic.

Fujimoto believes that the project embodies the Japanese concept of “Sanpo Yoshi”, or three-way satisfaction. This describes transactions that are good for the seller, good for the buyer and good for society:

“When fans purchase NFTs drawn by artists and celebrities, they can not only enjoy the art, but also directly contribute to those in need. I believe this NFT campaign will bring joy to many people, and I’d like to thank the Enjin team and artists who have agreed to join the initiative.”

The initiative will take place through Fujimoto’s crypto donation platform Kizuna. This was launched in 2017 to educate about the potential of blockchain and NFTs for mainstream use, especially in the context of giving to charity.

Kizuna hopes to raise over 2,000,000 yen ($20,000) from the sale, with the celebrities who are donating artworks to be announced soon.

Fujimoto was an early adopter of Bitcoin technology and has been actively promoting crypto and blockchain since 2011. Aside from running Kizuna, she is an ambassador for Binance’s charity foundation, and an advisor for multiple companies in the blockchain space.

The Enjin platform provides tools for integrating blockchain technology into games and creating NFT assets that can be used across various games in the Enjin multiverse. It recently announced that it would be launching a range of Atari branded NFTs for a reboot of the Kick Off series of footballing games.

Updated: 1-20-2021

Rick And Morty Crypto Art Sells For $150,000 On Gemini-Owned Platform

Justin Roiland’s piece was listed on a non-fungible token art exchange owned by Gemini.

A crypto art piece by Justin Roiland, co-creator of the famous animated series Rick and Morty, has sold for a handsome price on non-fungible token marketplace Nifty Gateway.

Dubbed “The First Ever Edition Of Rick And Morty Cryptoart,” the tokenized artwork was sold at silent auction for $150,000. Nifty Gateway announced the news on Twitter on Jan. 19.

The newly sold artwork is part of Roiland’s crypto art collection called “The Best I Could Do.” The collection includes multiple artworks inspired by the Rick and Morty series as well as other animations including the iconic American animated sitcom, The Simpsons.

Dubbed “The Smintons,” Roiland’s crypto artwork is expected to be sold later today as the auction ends at 7 pm EST. At the time of writing, the highest bid amounts to $188,137.

The latest news comes shortly after Nifty Gateway announced the auction of Roiland’s collection on Jan. 13. The Rick and Morty co-creator is apparently an early Bitcoin (BTC) adopter as he publicly endorsed the crypto back in 2015.

Owned by Winklevoss’ crypto exchange Gemini, Nifty Gateway is a major NFT marketplace that facilitates a number of NFT sales each day. In December 2020, a Star Wars-themed NFT piece sold for $777,777 on the platform. Previously, Nifty auctioned Trevor Jones’ NFT “Picasso’s Bull” for $55,555.

Crypto NFTs have been steadily gaining momentum in recent months, bringing famous creators and artists a new opportunity to sell their pieces directly to their fans. In late 2020, Sean Ono Lennon, a British-American musician, songwriter and producer, auctioned a tokenized digital artwork on nonfungible-token marketplace Rarible.

Updated: 1-23-2021

Ultra-Rare Alien CryptoPunk NFT Sells For 605 ETH, Or $750,000

The NFT market is getting molten hot as a rare “alien” CryptoPunk sells for over $750,000.

Amid a wild market-wide bullrun for non-fungible tokens (NFTs), an ultra-rare “alien” CryptoPunk has sold today for 605 Ether, worth over $750,000 at today’s prices.

CryptoPunks are widely considered to be the original NFT project, released even before Cryptokitties, the blockchain-based collectibles project that propelled NFTs to mainstream consciousness. CryptoPunks developers Larva Labs report that Punks have accounted for $26 million in lifetime sales on their native marketplace, and the average sale price for Punks over the past year has been $6,199.

Each Punk has unique attributes, such as background color, accessories, and even some ultra-rare features, such as an “alien” or “zombie” appearance. The Punk that sold today, #2890, is one of nine alien Punks in existence.

The bidding for the Punk was competitive throughout the last week, with DeFi megawallet-turn-Twitter personality 0x_b1 putting in a 500 ETH bid. The Punk was last sold in July of 2017 for 8 ETH, meaning the owner made a 75x return on their investment.

The new owners are a group of investors that include FlamingoDAO, a “NFT collective that supports and collects premium NFTS,” according to a Flamingo spokesperson. The official FlamingoDAO Twitter handle confirmed the purchase with a meme:

“It’s simple: Cryptopunks is a groundbreaking project; it pre-dated the ERC 721 standard and crypto kitties,” said the spokesperson on the investment thesis. “Aliens are the rarest form of Cryptopunk and we believe that the acquired Alien will be prized by collectors over time and mature into an iconic digital art piece.”

Crypto art collector @gmoneyNFT, who himself dropped 140 ETH on a Punk earlier in the month, thinks that the alien is a fine investment despite the sky-high valuation.

“I think it was a great purchase. As the world moves more digital, the digital “flex” will be more and more important. It’s how humans operate in the physical world. It won’t change in the digital realm,” he said.

Long-derided as a secondary usecase for blockchain, sales like today’s demonstrate that NFTs are just beginning to have their day in the sun. NBA Topshot, a collectible highlight project from Dapper Labs, has proven to be tremendously popular, and Axie Infinity’s native critters have been selling for remarkable prices as of late as well.

Some critics have called into the question the sky-high prices rare NFTs have been fetching, however, arguing that simple digital scarcity is a shaky foundation on which to justify a $750,000 sale. @gmoneyNFT dismisses these criticisms, saying that there are plenty of real-world analogues that make just as much — or as little — sense.

“Why would someone pay millions of dollars for an original Andy Warhol screen print when you can buy the same one online for $20? Why would someone buy a pair of yeezy’s for $300 when you can buy a fake from the same factory, made with the same materials for much less? Humans like to feel special. The provenance has value.”

Updated: 1-27-2021

Mega-Whale Pranksy Brings Collectible Highlights To The Fore

As NFTs once more capture mainstream attention, one prolific collector is leading the charge.

On the evening of Jan 25, longtime non-fungible token (NFT) collectors, developers, and believers witnessed a bizarre, but likely validating piece of blockchain history: legendary collector-whale Pranksy was interviewed on the Fox 5 New York evening news during a segment on NBA Topshot, an NFT-backed collectible highlights project.

NFTs on the nightly news is the culmination of a variety of intersecting trends. For one, it’s a testament to the developmental progress the NFT space has made since CryptoKitties, the last blockchain-based collectibles project to attract a hint of public attention in 2017.

The interfaces are sleeker, transactions are easier, the prices often much, much higher — and in Topshot, a use case long thought as niche or secondary is gaining real mainstream traction due to an unusually snug product-market fit.

For Pranksy, however, it marks a celebratory lap for a collector whose rise to prominence and success is possibly among the most remarkable in crypto: on the back of a lone initial deposit of $600, Pranksy now claims to command a NFT collection worth upwards of $9 million, with almost $7 million in Topshot highlights alone.

“I like to think of myself as the working man’s whale,” the 29-year game developer told Cointelegraph in an interview. “I’ve never been backed by large amounts of FIAT, and I didn’t buy Ethereum early.”

It’s a multi-million dollar achievement that itself demonstrates the growth of the NFT space, one which has been on a remarkable tear as of late.

To get a sense for how both NFTs and Pranksy came this far — and where everything is going — we sat down the semi-anonymous collector and some of his colleagues to discuss whales in illiquid markets, recognizing successful new products, and the future of digital collecting.

Slow Grind

Pranksy making the news through his NBA Topshot collection has a pleasing touch of synchronicity to it: the collector first entered NFT markets because of another project from Topshot developers Dapper Labs, CryptoKitties.

“So I started NFTs in 2017 after getting a tip off from a friend (My now business partner Carlini8) that ‘digital cat pics’ were going viral and selling for loads of money. I took a look at the site, installed Metamask, deposited $600-$800 in ETH and never looked back.”

In just a few weeks, his deposit grew to upwards of $30,000 as CryptoKitty mania took hold and clogged up Ethereum for days on end.

From there, Pranksy branched out to other projects, turning “flipping” into a second source of income aside from game development. His niche was investing heavily into projects at launch, commanding a huge supply of the circulating NFTs and growing “notorious for providing a lot of volume and liquidity to a project.”

“Pranked is a market expert and volume churner at the highest level,” said fellow NFT collector and developer Nate Hart. “People hate on flippers because of the downward pressure they put on a market, but the reality is they’re essential since a project with no volume is often a dead project.”

Nate and Pranksy have long been friends and rivals, and in 2020 engaged in a semi-public race to 1000 Ethereum in profits from NFT trades (a race that Hart made sure to specify that he’d won). Pranksy’s cornering of the Topshot market, however, has put him back in the lead.

While Pranksy’s early and aggressive accumulation of NBA Topshot Moments was a tactic he’d developed over years of practice, it wasn’t always an easy journey.

“2018-20 was a hell of a grind, scraping around for an ETH here or there, when ETH was $200,” Pranksy said.

His Opensea and Ethereum address functionally serve as histories of the NFT landscape from 2017-present, with hundreds of projects and millions of NFTs represented in his hoard.

Whales’ World

Pranksy’s rise to whale status coincides with a growing number of major traders and collectives looking to replicate his strategies — and possibly do so with more sinister intentions.

In the traditional art world, individuals can amass and effectively control corners of the market, such as the Mugrabi family with Andy Warhol work. Given the sudden interest from retail investors, the same practices could be applied to NFTs with relatively minimal capital.

Just last week, the half billion dollar whale wallet turn Twitter personality 0x_b1 placed a 600 ETH bid for a rare CryptoPunk, the original generative art NFT project, only to be outbid by a group of buyers including FlamingoDAO, a DAO which focuses on NFT investments. The Punk now has a social-media managed personality, a marketing innovation first brought to the fore by Axia, another wildly high-priced NFT.

Pranksy himself just joined FlamingoDAO in a transaction where he traded 60 ETH worth of Topshot moments for 1% of the DAO’s holdings, and will serve as an advisor on future purchases. He admitted that DAOs or major buyers controlling markets posed “a risk,” but said that FlamingoDO was his first participation in a DAO and that he couldn’t comment further.

Hart also acknowledged that there might be some market manipulation at play, but so far the effect has been minimal.

“I think this already happens to some extent, but just because the average price of something is high doesn’t necessarily mean anyone new will pay it…. I can’t really think of a specific time where a very large holder has came back and completely rekt a market either, so the sellers seem to understand their own positions here,” he said.

Artist Kevin Abosch, who often uses blockchain as a medium, told Cointelegraph that he’s frequently approached by both real-world and NFT funds cooking up schemes, and warned that new entrants to the market should be wary of marketing and hype.

“There are thousands of self-proclaimed ‘crypto-artists’ or ‘NFT-artists’ who see the headlines of big sales on the NFT auction platforms and understandably think there’s a gold-rush. It’s important to recognize that there’s an engineered vacuum being created and inside the vacuum it’s easy to make it seem like there are a few hyper-successful artists in the space and that a sophisticated market is emerging,” said Abosch.

“While I’m obviously deeply involved in the space, I have to tune out all the money-talk. At some point it’s vulgar. Art is for lovers and the art market is for hustlers,” he added.

Blue Sky

While it might never again generate the kind of returns that propelled Pranksy to riches, he still believes the NFT market has plenty of gas in the tank. The key is that news reports such as Monday’s — which often strike some grizzled veterans as an obvious top signal — could lead to sustained engagement that brings “new people and collectors to the space.”

It’s not an absurd notion, either. Yesterday, Topshot eclipsed the single-day all-time secondary market activity record.

 

Hart Agrees That Topshot Could Be A Sustained Hit.

“I think if you look at traditional NFTs, you essentially have baseball card collecting without the baseball. I remember collecting cards with my friends when I was a kid and while I always enjoyed tracking their values in the Beckett price guide and keeping up with a mental figure of my cardfolio, I never actually cared about selling them. I think Top Shot is becoming that trojan horse that allows real fans and collectors to collect something that they actually want,” he said.

For his part, Pranksy is angling to capture a new round of popular interest in NFTs with his latest business venture, NFT Boxes. Similar to subscription boxes in the real world, NFT Boxes will deliver to users a monthly “loot box” containing curated NFT collections.

There might still be room for successful solo traders and developers as well, however… so long as they put in the work.

“My advice to developers and collectors is to do their research! Don’t suddenly drop a new project or invest heavily into something without first spending some time in discord and on social media […] Nothing worse than buying items on opensea blind or buying a cheap license and releasing a collectible card game NFT of it.”

Gamified Yield Farming With Nonfungible Tokens

Game developers are now trying to use the foundational premise put forth by NFTs and to marry the idea with that of yield farming.

The concept of yield farming has gained a lot of traction over the past year or so particularly because it enables crypto owners to stake their assets in return for tangible returns within short time windows. And while the thought of earning a profit on one’s investment may not be new at all, the idea behind yield farming — where users can earn rewards for making use of a particular DeFi application — is largely confined to the purview of the decentralized finance sector.

Also, much like yield farming, nonfungible tokens, too, have become extremely popular over the last couple of years. This is because these cryptographic entities — whose values are directly linked to a particular asset — are ideal for owning physical items such as artwork, property deeds, collectibles, such as CryptoKitties, as well as, digital commodities such as game skins, trading cards, etc.

How Can NFTs Be Used Within The Domain Of Yield Farming?

Ever since the Napster debacle from a couple of decades ago — that saw legendary rock band Metallica take on the file-sharing giant for allowing users to illegally download their music — came to light, conversations pertaining to digital content ownership and rights management have become increasingly more prevalent across the globe.

In this regard, over the course of 2020 alone, NFTs seem to have captivated the imagination of crypto enthusiasts worldwide primarily because they allow for digital data ownership processes to be facilitated in a highly streamlined, efficient manner.

There are various blockchain-based digital collectible card games that are now available online. They enable players to operate within a fantasy landscape, even allowing them to create a number of novel items, collectibles which can then be used in-game in exchange for a wide array of digital goodies or even be sold across various marketplaces for monetary remuneration.

Why Combining NFTs With Yield Farming Could Be Huge…

Most globally recognized video game developers — such as Electronic Arts, Activision, UbiSoft — tend to employ a monetary maximization model, wherein they are focused primarily on making as much money as possible with each title release.

In this regard, it bears mentioning that over the course of the last 4–5 years, the issue of microtransactions seems to have plagued the entire gaming market, such that players are now required to shell out a small fee for unlocking every small feature present in a host of popular gaming titles, for example, FIFA 2021, NBA 2k21, etc.

Blockchain gaming, on the other hand, seems to be more concerned with providing players with as much value and playability as possible.

For example, in a vast majority of blockchain titles, users are provided with an option of minting and selling their in-game items as they please, thus, shifting the balance of power from the hands of game developers to those of the players, particularly from a financial aspect.

What Comes Next?

As the gamified yield farming market continues to mature, it will be quite natural for the industry to move to a framework wherein in-game rules can be modified by the players themselves.

For instance, if a game typically assigns certain attributes to an in-game item — for example, a factory has the ability to only produce 80 cars or 50 motorbikes per day — then with time, users will be given the ability to alter these rules and increase/decrease the production capacity of these defined entities, depending upon the governance tokens they own.

What this means, in the long run, is that players will eventually get to impact core rules of the game through governance — something that was previously inconceivable with traditional video games.

Also, from a monetary aspect, such a model can completely shake up the gaming sector since users can potentially alter production rates, inflation standards, etc. within the game — thereby allowing their governance tokens to become more and more valuable over time.

Lastly, the ability to alter in-game protocols means that players with substantial governance tokens can quite easily tweak parts of a game’s economy, which is revolutionary especially when given the fact that blockchain titles are totally decentralized, both in their design and operability.

The Future Of Gaming Is Here

Empire building games, such as Sid Meier’s Civilization, Command and Conquer, Age of Empires, have captured the imagination of millions of people all over the world for decades. However, as entertaining as these titles may be, they don’t allow players to generate any sort of monetary returns for them in lieu of their spent time and effort.

The concept of gamified yield farming with NFTs can change all that because it enables users to make money from every single in-game asset that they own. Not only that, depending on one’s personal skill set, players can potentially rake in thousands of dollars for something that they enjoy doing daily.

For example, within fantasy landscapes, players can buy collectible NFT game cards that can be used in the game in order to earn a wide array of digital goodies, and they can also be sold on various NFT marketplaces for cryptocurrency. In a yield-farming manner, the NFTs can also be trustlessly rented out to other players to passively earn yield on NFT assets.

That being said, traditional PC/console games still have an overwhelming edge over blockchain titles at the moment both from a visual as well as a functional standpoint, however. When the graphics and gameplay side of things start to become similar between the two, decentralized games will dominate the industry.

Updated: 1-31-2021

How Much Is Too Much? Crypto Art Market Brings Together Deep Pockets And Big Artists

In the future, owning unique art won’t be restricted to the elites, but will everyone have digital art on their walls?

With the nonfungible token market approaching the frothing point, perhaps it’s time to sit back and ask: “What’s happening here?” The $750,000 in proceeds from the recent sale of a single “alien” CypherPunk NFT, after all, could have paid for a reasonably sized house.

The crypto world at large is only 12 years old, entering adolescence, but crypto art — art on a blockchain — and nonfungible tokens are just out of their terrible twos. The launch of an epoch-defining CryptoKitties goes back to 2017 and 2018, and Ethereum’s nonfungible token, ERC-721 — which is used by many digital galleries and also non-art NFTs — wasn’t developed and rolled out until early 2018. What is being discussed here is still very new.

Moreover, Bitcoin (BTC), the world’s first blockchain project, was initially just a more efficient way to transfer money, though it soon became more — a kind of social movement. In a similar vein, crypto art might evolve to be more than just another collectible.

The technology behind it could make every person on the planet — not just the top 1% — owners of unique art pieces, proponents say. Or, as the winner of a crypto art auction said in December: “It’s my biggest wish for crypto to become understood as a liberating technology.”

There’s no question, though, that art — physical or digital — is also about money. The “liberating” art owner cited above has also bid $777,777 for a crypto work by artist Beeple (aka Mike Winkelmann), and it seems fair to ask in light of similar events whether the digital art market is overheating.

An Emerging Culture?

“It’s a bubble in the sense that capital is rapidly flying into the NFT market and much of that capital is coming from individuals who would otherwise be using that capital to invest and/or trade-in cryptocurrency,” Vladislav Ginzburg, CEO of digital art and collectible market Blockparty, told Cointelegraph. But something else is going on too, he added: “There is a real culture of collectorship emerging around NFT-backed digital art and cultural assets.”

Giovanni Colavizza, assistant professor of digital humanities at the University of Amsterdam, told Cointelegraph: “I believe we are in full price discovery mixed with rapid growth of the NFT collectibles space.” Furthermore, he added that as more wealthy individuals come into the market, the more the “creatives realize how this space can allow them to monetize their work.”

The crypto art world as presently constituted is two-fold, said Ginzburg, embracing artists who have been creating digital art from the beginning but had trouble monetizing and distributing their works — and for whom tokenization is a boon — as well as traditional, physical artists, many with significant followings but who are seeking a still larger global audience.

Justin Roiland, who just sold a crypto art piece for $150,000 at a silent auction on a Gemini-owned art platform, for example, belongs to the first group. “He is an animator — a form of digital art — who has been able to monetize his characters and animations via commercial means on a popular television show,” explained Ginzburg, adding:

“Getting into the NFT space has enabled him to stay natively digital but sell truly unique and ownable works of art without having to learn a new medium, such as printmaking.”

For traditional artists keen on adopting NFTs, “the path is less clear,” added Ginzburg, whose firm is exploring with such artists how NFTs “can support their physical works, as either an ‘add-on’ or possibly a digital extension.”

A Niche Within A Niche Market

The traditional art world, where total annual transactions exceed $60 billion, dwarfs digital art, but it still remains a niche market “full of information asymmetries and all kinds of arbitrary obstacles to entry which keep it artificially small,” noted Colavizza.

The NFT space, by comparison, is fully transparent and open to anyone, so it isn’t surprising that some established artists would want to test the waters, and that may have something to do with recent NFT activity.

“Several recent big drops have been due to established creatives with a follower base moving to NFT and bringing it with them,” said Colavizza, citing Beeple, who auctioned off his entire NFT collection for $3.2 million, including the single work cited above that went for $777,777, smashing Trevor Jones’ previous crypto art record by 14 times.

Another reason for recent activity, surely, “is the new surge in crypto,” said Colavizza. Bitcoin and Ether (ETH) reached historic highs in the past month. “Several deep pockets are being or have been made.

The high liquidity means many are looking for ways to invest, and NFT collectibles are a rapidly growing space to do so.” The downside to this is higher market volatility, he added.

There might be a DeFi aspect to the NFT run as well. “Some collectors have clear plans for their collections — e.g., using it as backing for other DeFi assets or for developing estate/projects in virtual worlds,” added Colavizza.

Indeed, FlamingoDAO, the crypto art collective that purchased the “alien” CryptoPunk for $750,000, announced its intent to acquire NFTs and convert them “into fractionalized works so that they can be plugged into emerging DeFi platforms, with rights to these works held and managed by a growing number of people in the Ethereum ecosystem.”

A Haven For Speculators?

Many, of course, view this all as so much rationalizing of what is just market speculation. Misha Libman, co-founder at art marketplace Snark.art, told Cointelegraph: “There are clearly a lot more speculative purchases in the crypto space with some buyers interested in flipping the NFT tokens for profit,” surely more so than in the traditional art world.

Moreover, “we are seeing a lot of emerging artists, and it is difficult to gauge where the prices reflect the quality of the artworks or where they are more driven by speculation.”

Ginzburg agreed that there was a lot of speculative money coming into the NFT market, which could leave just as quickly, but this happens in the traditional art world, too. Still, the foundation of the traditional art market is collectorship. He added:

“Pure speculators tend to be identified, isolated, and shown out pretty quickly. Collectorship keeps prices stable and the market reliably growing. This culture of collectorship is emerging in NFTs, and it’ll be exciting to see.”

Asked how crypto art prices are determined, Ginzburg answered that the basic rules resemble those in traditional art: Who are the artists? What are their backgrounds and achievements? Does their work have quality? Which collectors are interested in them or already own their work? Which galleries/platforms are showcasing their art?

“If there is one primary difference I see, it’s the new creative freedoms that digital art affords the creator,” said Ginzburg. “I would judge NFTs additionally on how many new elements they can bring together: audio, movement, physical accompaniment, etc.”

Priyanka Desai, a community representative at FlamingoDAO, told Cointelegraph that a big difference from pricing traditional art is that there “is no auction house taking a cut, it’s peer to peer,” and it’s also up to the content creators to decide when an offer will be accepted.

Traditional art auction houses like Christie’s and Sotheby’s can charge commissions of 25% or higher. Open Sea, an NFT sales platform, by comparison, takes only 2.5% for sales on its platform.

Most NFT transactions are in Ether, the world’s second-largest cryptocurrency after Bitcoin. What would happen to crypto art activity if the price of ETH and/or BTC collapsed, as happened in March 2020? “It can happen in any market, and it happens in traditional art,” said Desai. In any event, the NFT market began rising well before the latest cryptocurrency run-up.

Who Are The Collectors?

Speculators aside, does the profile of the typical crypto art collector differ much from traditional art collectors? The crypto art buyer “tends to be young and tech-savvy. They’re already familiar with crypto, even if they don’t own any,” said Ginzburg.

The market is global, but most participants are American or European, though he conceded that “this is changing very rapidly. They may or may not be art collectors, but they are definitely interested in culture as it relates to music and fashion.”

Libman told Cointelegraph: “The collectors we are seeing in this space are usually not from the traditional art world. They are generally young, educated, technology-friendly, and just like other collector markets, profess specific tastes and strategies.” As the crypto art world becomes more saturated with NFTs, they are becoming more selective, added Libman.

FlamingoDAO, the crypto art collective launched in October, has 55 members — all accredited investors — including “deep crypto, deep NFT people,” said Desai, but also collectors from the traditional art world who want to move into crypto art. They are a mix of ages — “even a few people over 50.”

A COVID-Induced Fad?

Will demand for tokenized art plunge if and when the coronavirus pandemic ends and people again visit museums and art galleries? “There is no question that the pandemic has given a huge boost to the digital art market,” said Libman, but museums were expanding their digital art collections art before COVID-19, and he expects that process to continue.

“When we look across the adoption of digital format across other industries, from publishing to film and music, we believe that the expansion of the digital art market is unavoidable,” he said, adding:

“Whether the person is experiencing it on a wall or through their smartphone only changes the format. Digital allows artists to reach much wider audiences without the complications of crossing physical borders, applying for visas, and concerning themselves with various logistics.”

Will Everyone Own Digital Art?

Overall, said Libman: “The NFT art space is an emerging market, and over time, it will mature and probably resemble its traditional counterpart.” Colavizza added: “I am bullish while also conscious that volatility is high and so there will be bumps along the way.”

According to Ginzburg: “The outlook here is extremely positive, as we’re going to see some of the truly great digital artists — who have been confined to monetizing their work via commercial means — start seriously focusing on their personal artwork as a revenue generator via NFTs.”

In the future, owning unique art won’t be restricted to elites who patronize Christie’s and Sotheby’s, Desai told Cointeleraph. “Everyone will have digital art on their walls. Owning digital art will be a part of your digital (online) existence,” part of your identity, like sharing your likes in music or films over social media.

Updated: 2-4-2021

Rare Hashmasks Digital Artwork Sells For $650K In Ether

“The piece itself is chaotic, yet ordered. It invokes a concept of biblical dualism with the demon and halo,” said the buyer.

A demonic digital artwork on the Ethereum blockchain has been sold for a small fortune via peer-to-peer marketplace OpenSea.

Selling for 420 ETH (roughly $650,000 at the time of purchase on Wednesday), the collectible non-fungible token (NFT)-based artwork is known as a Hashmask.

The Buyer, @Seedphrase On Twitter, Posted:

The Hashmask platform, from Switzerland-based Suum Cuique Labs, hosts a collection of 16,384 unique digital portraits created by a collective of over 70 artists, according to the its website.

“The mask itself is a unique, one-of-a-kind design, and the mystical attributes – character, eye color and skin color – are present in only 0.07% of all Hashmasks,” the artwork’s buyer, Danny – who preferred to not to provide a surname – told CoinDesk via email.

“I’m particularly interested in purchasing ultra-high-end NFTs that are aesthetically pleasing to the eye and scarce,” he said.

Danny also said he was “immediately” attracted to Hashmask due to the “Basquiat style” – a reference to noted Manhattan-based artist Jean-Michel Basquiat – and its several layers of “subjective scarcity.”

“I also liked that there’s a transparent copyright policy that gives the owner freedom over their non-fungible tokens, whereas most NFT projects have a license that restricts the buyer from commercializing their NFT,” Danny said.

While the NFT community has been evolving, Danny said it hadn’t yet seen a major influx from the public.

“Knowing that I’m an early investor while also providing liquidity to artists and projects is incredibly rewarding,” he said.

Updated: 2-5-2021

YouTube Boxer Logan Paul Turns Himself Into An NFT Pokemon Card

Winning bidders on Logan Paul’s auction of first edition Pokemon card packs will also receive a limited edition NFT featuring the man himself.

Controversial YouTube celebrity Logan Paul has jumped on the nonfungible token, or NFT, bandwagon as part of his latest self-promotion.

Decentralized e-commerce platform Bondly announced Feb. 4 that it will create a limited edition of 44 NFTs featuring a “holographic” image of Paul in his boxing gear mocked up as a Pokemon card.

The NFTs will be distributed to auction winners in Paul’s upcoming Pokemon Box Break.

The YouTuber recently acquired six unopened boxes of first edition Pokemon cards from over twenty years ago, dropping a cool $2 million on the cards in the process.

Each box contains 36 packs of cards, and Paul is auctioning the packs from one of the boxes between Feb. 4 and Feb. 11 through the Goldin Auctions sports collectibles platform.

Paul will unbox and open the packs on behalf of the auction winners in a live stream on Pokemon Day, Feb. 27, to celebrate the 25th anniversary of the game’s launch.

As a special bonus, each pack winner will also receive one of the limited edition NFTs featuring Paul as a Pokemon. The card describes Poke-Paul as a “legendary human”, who is “tall and thick,” and one of the cards special attacks is a dynamic punch leaving opponents “confused.”

The minimum bid price on each pack of cards is $10,000, and of the 24 packs of cards remaining on the auction site, only seven have been bid upon to this amount at the time of writing.

Perhaps appreciating that $10,000 represents a somewhat high level of entry, Bondly will also be issuing a whole line of Logan Paul NFTs “for those who are unable to make a bid in the auction.”

These will be sold individually through a custom Logan Paul store on the platform.

Although initially gaining recognition through his video content, Paul has also successfully transitioned into the boxing world. He was scheduled to fight Floyd Mayweather in an exhibition match on Feb. 20, although the match was indefinitely postponed earlier this week.

Mayweather was famously paid to promote an initial coin offering in 2017, which later turned out to be a scam.

Updated: 2-16-2021

Christie’s Auctions Its First Purely Digital Artwork In Form Of Blockchain Token

Christie’s is set to auction its first purely digital work, by Mike “Beeple” Winkelmann, through an NFT marketplace.

British auction house Christie’s has announced the auction of its first ever “purely digital work of art.” Announcing the news Tuesday, Christie’s said that the nonfungible token artwork will be issued in partnership with major NFT marketplace MakersPlace. Dubbed “Everydays: The First 5000 Days,” the piece was created by Mike Winkelmann, who goes by the name “Beeple.”

According to the official page of the NFT auction, the starting price for the work, which interested parties can bid on from Feb. 25 until March 11, is just $100.

“Minted exclusively for Christie’s in February 2021, this monumental digital collage marks the first time Beeple’s work will be sold at a major auction house,” it said in the announcement. “It’s also the first-ever purely digital artwork (NFT) to be offered at a traditional auction house, with its authenticity assured thanks to blockchain technology,” Christie’s added.

Noah Davis, a postwar and contemporary expert based in New York, emphasized that Christie’s move into the NFT industry is crucial for digital art:

“Christie’s has never offered a new media artwork of this scale or importance before. […] Acquiring Beeple’s work is a unique opportunity to own an entry in the blockchain itself created by one of the world’s leading digital artists.”

As previously reported, Christie’s NFT partner, MakersPlace, is a global NFT marketplace, similar to SuperRare, KnownOrigin and Winklevoss brothers-owned Nifty.

This new auction is not the company’s first foray into blockchain-based art. In October 2020, a similar Christie’s auction sold a Bitcoin (BTC)-themed art piece and NFT based on blockchain technology for $131,250.

Two Feet And FEWOCiOUS’s NFT Auction Becomes The Third To Top $1M In Sales

Four collaborative NFTs launched by musician Two Feet and visual artist FEWOCiOUS have generated more than $1m in Nifty Gateway’s largest auction of 2021 so far.

The auctions were organized by Illumino, an NFT-focused firm seeking to bring “tastemakers and artists” together to launch innovative art on-chain. Illumino was put together by the LA-based management agency Keel, crypto VC firm Framework Ventures, and Bruch Projects — the NFT arm of Manna Ventures.

The NFTs went live on Valentine’s Day, beginning with one-of-a-kind 3D renditions that were sold to the highest bidder.

The one-of-a-kind renditions included “Crowded City” and “A Peak In My Head” — works composed collaboratively by FEWOCiOUS and Two Feet that sold for $150,000 and $158,888 respectively.

Two other collaborative works were made available for open auction at a set price of $999 each, allowing unlimited purchases of the NFTs to be made during the auction. In total, 383 editions of “CryptoCaster” and 324 editions of City Hand were minted, generating roughly $382,600 and $323,700 respectively.

Overall, the four collaborative works drove more than $1 million in primary sales, making the drop Nifty’s most-valuable for 2021 so far. Twitter account “The Blockchain Review” noted that only three artists have previously issued NFTs collections that drove seven-figures worth of primary sales.

Platinum-selling musician Two Feet and acclaimed 18-year-old visual artist FEWOCiOUS have teamed up to launch non-fungible tokens, or NFTs, on the Winklevoss-owned NFT marketplace, Nifty Gateway.

According to an announcement, the Two Feet and FEWOCiOUS’ NFT auctions were intended to showcase “how creative personalities can use cutting-edge tools to engage with fans — and in turn earn money — at a time when the Covid-19 pandemic has shuttered concerts and galleries.”

While an announcement emphasized the impact of the coronavirus pandemic on the live arts secor — with lockdowns destroying the revenue streams of many musicians and artists through disrupting concerts and galleries — Illumino co-founder Michael Ehrlich told Cointelegraph the firm was not founded in response to the pandemic.

“While the company was not founded as a reactionary event to the pandemic, we are passionate to help artists open up innovative ways to share and monetize their creations with the world,” he said.

Ehrlich stated that Illumino plans to launch “more projects in the future that bridge the gap between different artist communities,” noting that “musicians and visual artists will be the starting point, with more collaborative mediums to come down the line:”

“The next couple of releases will continue the innovative concepts featured during the first release. We plan on bringing new twists to the NFT landscape like we did by raffling off at random a one-of-one physical Fender Guitar for the buyers of the ‘CryptoCaster’ Open Edition NFT.”

NFTs appear to have been extremely popular this past Valentine’s Day, with crypto artist David Rudnick also selling a digital flower for 10.8 Ether worth roughly $18,600 on Feb. 14

Updated: 2-17-2021

Arcade Classic Street Fighter II Launches NFTs On WAX Blockchain

It’s shaping up to be the year in which NFTs go mainstream, thanks to successful releases by a number of household names.

Video game developer Capcom is the latest pop culture brand to enter the crypto collectibles space, launching a series of Street Fighter II-inspired NFTs on the WAX blockchain on Feb. 18.

The digital trading cards feature renderings of characters from the ever-popular arcade game, first released 30 years ago in 1991.

Digital packs containing 10 and 60 Street Fighter II cards will be available for purchase via credit card only. Cards are released from packs in an “unpacking” process that simulates the opening of a physical trading card pack, and can also be “crafted” to form other NFTs. Unopened packs of cards frequently sell on secondary markets for much higher prices.

The sale will start on Feb. 18 at 12:00 PM EST and last for 24 hours, during which time an unlimited number of packs will be sold. Unpacking and crafting abilities will be enabled immediately upon conclusion of the sale.

Digital collectibles have been on a tear in 2021, with more than $133 million in NFT sales in the last 30 days. Over half of that – 54% to be exact – was generated by the NBA Top Shot collection, recently launched on a cryptoasset-centric blockchain by Dapper Labs.

Lee Jenkins, Product Manager at WAX, told Cointelegraph he believes blockchain technology means now is “the first time that digital ownership is truly comparable to physical ownership of an item.”

“Collectors can now own a digital item forever,” Jenkins said. “They can collect, buy, sell and trade, and items are easily verifiable as authentic, with verifiable scarcity and rarity.”

“For those companies that understand blockchain, they realize that digital collectibles (NFTs) are blockchain’s killer app, allowing them to offer products and services that were never before possible without blockchain technology.”

The market for second-hand crypto WAX-based crypto collectibles is thriving, thanks in part to WAX’s low transaction costs. Jenkins believes such factors allow WAX’s secondary markets to service the business of individual collectors. He points to statistics showing the average secondary market sale on WAX to be $3.66, whereas this same statistic for competitors is $1,608 on OpenSea and $533 on Rarible.

According to NFT data aggregator Cryptoslam.io, WAX-based projects account for 17 of the top 30 NFT producers by secondary sales volume — although Ethereum-based projects still comprise the majority of total sales. With slightly over $1.3 million in sales on the secondary market, WAX’s best-selling NFT brand is Topps’ Garbage Pail Kids, their most recent release being a caricature series based on a meme-worthy pose by U.S. senator Bernie Sanders.

Other commercial releases on WAX include series by Atari, William Shatner, and Deadmau5. There is also a growing number of original art collections that are in some cases proving to be equally or more popular, such as the KOGS, Bitcoin Origins and Blockchain Heroes series.

Capcom itself is no stranger to the blockchain. Digital collectibles maker ECOMI, home to CBS, Warner Brothers and Cartoon Network brands, has also licensed Capcom’s intellectual property. ECOMI are the creators of VeVe, a virtual marketplace and showroom for high-end digital collectibles.

Updated: 2-19-2021

Cointelegraph Commemorates Bitcoin Hitting $50K With An Exclusive NFT

Celebrate this historic point in BTC’s history by treating yourself to one of our limited run of 50 NFT artworks.

By now it probably hasn’t escaped your attention that earlier this week the original (and many would argue, still the best) cryptocurrency, Bitcoin, broke through the $50,000 price point for the first time in its history.

Whether you are a newcomer to the party, or fondly remember mining BTC with a GPU rig a decade ago, it can’t help but feel like a pretty momentous occasion. It is the culmination of all of the support, belief, and of course money, that each of you has invested into Bitcoin.

To commemorate this, we got our talented artists to put together a piece of art celebrating you, the Bitcoin community, propelling BTC past this significant price point.

This has been minted into a strictly limited edition of 50 nonfungible tokens, which are available through our Rarible profile The price of each NFT will be $1,000 (or to be more precise 0.5 ETH), valuing the entire collection at an entirely appropriate $50,000 at launch.

Of course, Bitcoin doesn’t end its journey here. Ultimately the price of BTC is less important than its power to transform the world of traditional finance. And although, in its decade-plus existence it has certainly shaken up the incumbent financial markets, the road to fulfilling its full potential still lies ahead.

But nobody would begrudge us taking a quick breather at this point; giving ourselves a little slap on the back in the knowledge that “we were there” when Bitcoin reached this point in its journey.

And for 50 of you, there is the chance to commemorate this by owning our NFT. Wear it like a badge of honour for all of the work we have collectively put in so far.

Here’s to all of you, and the start of Bitcoin’s next chapter.

Update: 2-26-2021

Cryptocurrency Millionaires Fuel A Boom In Digital Art Market

Investing in art is a rite of passage for financial heavyweights, marking their transformation from unrefined market players to modern aristocrats.

Billions of dollars made playing stocks and bonds are funneled into a Jasper Johns painting on the wall, Picassos in a bunker at the Geneva Free Port or, famously in the case of Steve Cohen, a 14-foot tiger shark preserved in formaldehyde by Damien Hirst at the center of a penthouse living room.

With Bitcoin surging more than 400% over the last year and trading near all-time highs, it’s the crypto-millionaires’ turn to dabble in the finer things. Sales of digital art have skyrocketed from $235,000 in Feb. 2020 to $63 million this month, according to data from Cryptoart.io, which tracks sales across six auction houses. What’s new in this instance is the art, like the currencies, has no physical presence.

The core case for buying digital rather than physical art is that it comes with a publicly verifiable record — a non-fungible token, or NFT — that ascribes ownership and authenticates a work through public blockchains. In exchange for opting for something you can only see on a screen rather than hang on a wall, the buyer never has to worry about the issue of provenance.

The question of authenticity has bedeviled even the most venerable of real-world art dealers: Manhattan’s Knoedler Gallery went out of business in 2011 after being sued for selling millions worth of sham paintings made by a forgery ring based in Queens.

And while the chain of custody is guaranteed, there’s no such promise that what’s on offer will suit the typical art buyer’s tastes. Much of what occupies online galleries reflects the sensibilities of crypto enthusiasts: memes, jokes and coins. Bitcoin, Ether and the Ethereum blockchain’s creator Vitalik Buterin are favored, if not trite, muses.

Last week Nyan Cat, an animated image of a flying feline with a rainbow trail, sold at auction for 300 Ether, about $600,000. A collection of work from digital artist Mike Winkelmann, who works under the nom de mouse “Beeple,” fetched more than $3.5 million in December.

A collage of 5,000 of his works held by Christie’s is expected to surpass that haul. Winkelmann’s “Crossroad,” a gif that depicts people walking past a dead former President Donald Trump sold on the secondary market Wednesday for $6.6 million, according to online marketplace Nifty Gateway.

“There’s a lot of physical art out there that is essentially just a certificate of authenticity.” said Duncan Cock Foster, who along with his twin Griffin is a co-founder of Nifty Gateway. Cock Foster pointed to Marcel Duchamp’s famous work ‘Fountain’ as an example. The piece, which presents an upside-down urinal as a water fountain, can easily be recreated, yet it’s remained sought after because of its clear ties to the conceptual master.

For digital artists, NFTs finally allow them to profit from their work by making an otherwise public good into private property.

A gif that was once just a right-click away from being copied and passed off as the genuine article can now be easily validated.

The artist and technologist Drue Kataoka sees digital art as the future. She says the subgenre of crypto art is being held back by the art-world establishment’s “severe (and purposeful) misunderstanding of digital art as a novelty, a gag gift or a modern tulip mania.” As a result, she wrote in an email, “much of the recent auction craze comes across as a middle aged suburban soccer dad trying really hard to be ‘cool’ — good intentioned, but awkwardly weird.”

NFTs have been around for almost a decade. Colored Coins, bitcoins from the first transaction on the ledger, were perhaps the first example. Because anyone could see which coins came from the genesis block, it was argued that they should be valued as rare coins. But it wasn’t until recent months that the market began to take off.

Low interest rates, surging cryptocurrency prices and easy-to-use online auction houses helped set off a tidal wave of buying. Now, Crypto enthusiasts have a means of diversifying their assets while showing off a novel use case for the technology that underpins their newfound wealth.

“I think the main reason why NFTs started to blow up over the last two weeks is that people started to realize it’s just a natural evolution of the market,” said the anonymous collector known as WhaleShark who is thought to be one of the largest NFT holders in the world.

The most valuable NFT he’s ever owned came from NBA Top Shot, a platform that marries the trading of the league’s top highlights with cryptocurrency, likely would sell for up to $1 million, he said.

At least one YouTube sensation has gotten in on the action. With a sale starting on Feb. 19, Logan Paul raked in more than $5 million selling Pokemon-inspired NFTs of himself for one Ether each. In the process, he introduced his nearly six million Twitter followers to the burgeoning marketplace. “Logan Paul is normalizing NFTs,” says Tiffany Zhong, chief executive officer of Islands, a platform helping creators monetize their audiences.

Updates on @LoganPaul’s 1st NFT sale:

• Total sales: ~$5,081,490 (1 ETH = $1965 rn)
• Total NFTs sold: 2586 NFTs
• NFTs available to buy: 414 NFTs
• 14 more hours before the remaining NFTs are destroyed forever

h/t @Art_T_J
— TZ (Tiffany Zhong) (@TZhongg)
February 21, 2021

Anthony Pompliano, the Bitcoin evangelist and co-founder of Morgan Creek Digital Assets, joined the fray Tuesday by putting ‘The Innovator’s Dinner’ on the auction block for a whopping 639 Ether (more than $1 million at the current rate of exchange).

The surrealist interpretation of Da Vinci’s ‘The Last Supper’ substitutes Jesus Christ and his apostles for luminaries of industry and pop-culture such as Steve Jobs and Beyonce, with a dunking Michael Jordan in the background.

We are listing the iconic Innovator’s Dinner NFT for sale tonight.

The 1 of 1 piece was commissioned from @FEWOCIOUS a year ago and has become one of the most sought after pieces of digital art in the world.

It will be the first NFT to sell for $1 million. pic.twitter.com/jG7qpm8WhP
— Pomp (@APompliano)
February 24, 2021

Crypto-experts like Coin Metrics co-founder Nic Carter caution that the market is in danger of overheating.

“It certainly seems frothy, but the kernel of a good idea is there and will continue to thrive,” said Carter.

But even if the current mania for art-based NFTs ultimately goes bust, the groundwork is being laid for a later time when more assets live on blockchains.

“In the future I expect that we see NFTs move beyond the domain of ‘autographed PNGs’ and move into the domain of more instrumental tokens – digital artifacts tied to some genuine utility,” said Carter.

Updated: 2-3-2021

Musician Grimes’ Debut NFT Auction Generates $5.8M In 20 Minutes

Acclaimed musician Grimes has made $5.8 million in 20 minutes after auctioning eight tokenized artworks in her first NFT drop.

Candian musician and visual artist, Claire Elise Boucher, or Grimes, has sold a mammoth $5.8 million worth of tokenized art in less than 20 minutes on Nifty Gateway.

On Feb. 28, the popular musician launched her debut NFT collection, “WarNymph,” in collaboration with her brother, digital artist Mac Boucher.

The collection takes elements from mythology and futurism to create the “Oth3rkin universe,” with Grimes’ WarNymph collection comprising a goddess who battles obsoletion and future decay within a fictional realm. The listing on Nifty Gateway states:

“WarNymph is the Goddess of Neo-Genesis. She battles the destructive force of obsolete ideas and systemic decay that threatens the future. She embodies the power of perpetual regeneration that manifests in a state of infinite infancy where she sheds her old skin of corruption.”

The collection included four drawings sold by open draw, three images sold through silent auction, and a regulator auction for a single one-of-a-kind multimedia piece.

Each of the artworks depicts angelic infants, often featured in dystopian scenarios invoking themes pertinent to popular culture — such as an incubator reminiscent of The Matrix, and a monolith that invokes The Planet of the Apes.

The four open edition tokenized drawings were priced at $20 and limited to 100 copies each, with the buyers of each piece being chosen through a random draw. More than 13,000 people signed up for each open draw.

The silent auctions, which allowed bidders to anonymously vie for one of 10 copies of three artworks, fetched prices from $77,000 to $111,000 — despite minimum bids starting at just $1,000.

The most-expensive NFT sold was “Death of the Old”, an animation depicting flying infant angels circulating a glowing white cross that is accompanied by an exclusive demo track from Grimes. The piece was sold through a regular auction, with the winning bidder paying nearly $389,000 for the one-of-a-kind artwork.

Grimes is a well-known Canadian musician and wife to Tesla CEO and Dogecoin enthusiast, Elon Musk. The entire Musk family is now involved in crypto, with Tesla investing $1.5 billion in Bitcoin on Feb. 8., and Elon purchasing Dogecoin for his 9-month-old son on Feb. 11 so that he could become a “Toddler Hodler”.

After her tokenized art debut, Grimes has become the top-performing musician in the NFT industry to date. The musician also teased further drops that will be released as she continues to develop the Oth3rkin universe.

Grimes also noted that a portion of the proceeds will go to Carbon 180, an NGO dedicated to reducing carbon emissions.

Grimes’ debut follows moves from other celebrities to embrace NFTs, such as entrepreneur Mark Cuban, actress Lindsay Lohan, vocalist of rock band Linkin Park, Mike Shinoda, and former MLB player, Micah Johnson.

Updated: 3-3-2021

100-Artist NFT Collaboration Sells Out In Minutes, Increases 7X In Price In 24 Hours

The limited-edition NFT artworks are already selling for thousands more than the original price. They combine work from 100 unique artists who might not have entered the space on their own.

An NFT made up of 100 individual pieces from 100 different artists has sold out within minutes on the Rarible platform, raising almost $89,000.

Although the sale amount is far from record-breaking, the project is noteoworthy in that it is a mass collaboration th has taken shape through an individual non-fungible token, or NFT.

NFT curator “Loopify” told Cointelegraph the work had been inspired by the current limitations for lesser-known artists to mint and sell their own NFTs such as high gas fees, limited understanding of the tech, and little visibility.

“The main idea behind it was that I chose a lot of artists and they had a huge barrier [minting fees] — this allows them to pursue creating NFTs.”

Minted on NFT platform Rarible, Loopify originally listed 150 editions for 0.3 ETH (approximately $475) each on March 3. Less than 24 hours later the editions have already risen in value by almost 7X, and are changing hands for 2 ETH, with the most expensive edition currently listed at 4 ETH by “Artist.” That’s more than 13 times the original price.

While the identities of all 100 artists are yet to be revealed, Loopify told Cointelegraph that the compilation includes work from Vexx, whose YouTube channel has almost three million subscribers and a quarter of a billion views, adding:

“We do have a couple of big artists and one that is new to NFTs”

The funds raised will be transferred into stablecoin USDC before being distributed equally to the artists. This process allows artists to enter the space and reap the rewards without having to pay gas fees or understand the technology behind NFTs Loopify explained.

Enjin Running Faster

Enjin, whose team created the ERC-1155 token, or semi-fungible token, is also tackling the gas fee barrier for incoming NFT artists. The project has just announced plans to release a new scaling solution dubbed JumpNet that will use the ERC-1155 token to allow users to mint and port tokens on multiple chains without gas fees.

Enjin CTO Witek Rodmoski explained that, “These technologies will enable developers to reach mainstream users and provide modern experiences without worrying about unpredictable business overhead caused by gas fees,” adding:

“JumpNet is our high-speed bridge network that will allow creators to mass-distribute thousands of NFTs at no cost. Tokens on JumpNet can jump between the Ethereum network or Efinity (our upcoming NFT highway) when it launches later this year.”

Although phase one is due to launch on April 6 and will support the free minting and trading of NFTs on Ethereum, it will not be until the second phase Efinity before the solution will support “assets from *any* blockchain.”

Interest in NFTs has snowballed this week, with Banksy, Grimes, Paris Hilton, and Deadmau5 getting in on the act.

‘I Can’t Believe You Morons Actually Buy This Shit’: Banksy Art Burned And Tokenized

The satirical piece by Banksy pokes fun at the shallow, bloated art industry… So, what would he think about NFTs?

An original artwork by anonymous British street artist Banksy has been burned and turned into a nonfungible token. The NFT will be auctioned next week on the blockchain-based Rarible platform, where users can create and purchase rare tokenized artworks.

The original Banksy in question is a satirical piece entitled “Morons,” which depicts buyers at an art auction bidding on a piece emblazoned with the words “I can’t believe you morons actually buy this shit.” The piece received certification from Pest Control — the only body authorized to authenticate original Banksy artworks.

“Morons” was sold at Christie’s auction house in London in late 2019, where it fetched $32,500 from an anonymous, independent buyer.

The burning of the piece took place at an unknown location in Brooklyn, New York, and was livestreamed via the recently created Twitter account BurntBanksy. The burning was reportedly carried out by a group of cryptocurrency enthusiasts in association with executives from the blockchain project Injective Labs.

The tokenization of the authenticated piece took place without input from the pseudonymous Banksy. However, other prominent artists have seen fit to dip their toes into the crypto world of late, as witnessed recently when famed British artist Damien Hirst announced he would accept bids for his work in Bitcoin (BTC) and Ether (ETH).

The NFT market became an industry unto itself toward the end of 2020, as almost $9 million in token sales was recorded in December 2020 alone. But that was just a sign of things to come, as NFT sales exploded moving into 2021, helped by the validation of several high-profile celebrities such as YouTuber Logan Paul and entrepreneur Mark Cuban.

On Sunday, acclaimed Canadian musician and artist Grimes launched an NFT collection titled “WarNymph”, which went on to sell for a collective $5.8 million. The NBA recently embarked on a joint venture with CryptoKitties creator Dapper Labs to launch NBA Top Shot — an NBA-themed digital token marketplace that has reportedly generated $230 million in sales since launch.

The “Morons” piece is not the first Banksy to be destroyed on purpose. In 2018, Banksy’s “Girl With Balloon” automatically self-destructed shortly after selling for $1.4 million at Sotheby’s. The artist later revealed that he had installed an automatic shredder in the painting’s frame in case it ever went to auction. In an ironic twist of fate, the destroyed Banksy is now thought to be more valuable than the original piece ever was.

The “Morons” NFT will be auctioned on Rarible on Tuesday next week. All proceeds from the auction will be donated to charity. The successful bidder will be entitled to receive the certificate of authentication from Pest Control; however, this too will be burned if it is not claimed within two weeks of the sale.

In an art industry fraught with fakes and forgeries, “Morons” may now be the most authentic, most secure Banksy piece in the world. Once logged on the blockchain, the possibility of it being forged, altered or manipulated in any way is close to zero.

Given Banksy’s rejection of the bloated, materialistic art world, what would he think of the current mania surrounding NFTs? Keep an eye on your local graffiti spots. The answer may be forthcoming.

Sports Collectible NFTs Will Have ‘Tremendous Value Created,’ Says Fanatics Chair

The NFT market, which includes artwork, sports memorabilia, and trading cards, grew to more than $250 million last year.

Basketball legend Magic Johnson has a future with the bulls. No, he’s not returning to play for the NBA, but joining a major sports licensing company that looks favorably at the rise of the non-fungible token market.

In an interview with CNBC’s Squawk Box today, Michael Rubin, executive chairman of sports merchandise company Fanatics, said the digital and physical collectible market was “exploding” due in part to many spending more time at home last year. Johnson just joined Fanatics’ board as an independent director and seemed to shared Rubin’s optimism.

“It’s almost a frenzy happening right now,” said Rubin. “I think there’s going to be tremendous value created, but also there’s so many people getting into it, I don’t think everyone’s going to be successful. I think it’s really going to be about creating incredible content, incredible product — that’s what is going to have longevity.”

Johnson compared non-fungible tokens, or NFTs, to the physical trading cards popular when he was in the NBA playing for the Los Angeles Lakers. The basketball legend said “the whole game has changed,” with collectible cards, jerseys, and even sneakers benefiting from advances in technology.

The NFT market — which includes artwork, sports memorabilia, trading cards, and more — grew to $250 million in 2020, more than quadrupling in size. In the art world, Micah Johnson, a former MLB player-turned artist, sold $2 million worth of NFTs on the Nifty marketplace last month.

Meanwhile, major sporting firms have also been partnering with tech companies to capitalize on this growing market. Last week, NBA Top Shot, a marketplace for NFTs built on Dapper Labs’ Flow blockchain, sold more than $230 million in digital collectibles.

NFTs Are Booming, But They’re Nothing New In The Art Market

Tokens backed by digital art may seem weird, but they have a precedent in photography collecting.

Four months after Pablo Rodriguez-Fraile spent nearly $67,000 on a digital artwork of Joe Biden and Donald Trump in the nude, the piece had transformed. Designed to respond to election results, it had morphed into a naked, graffiti-covered Donald Trump lying on a trash-strewn lawn.

The price changed, too: Rodriguez-Fraile sold it for $6.6 million. “Obviously, I thought it would take a bit longer” to appreciate in value, says the 32-year-old with an MBA from Columbia, who describes himself as a digital asset investor. “Having said that, funnily enough, I actually think it was a fantastic deal for the buyer.”

The work in question is a short video created by Mike Winkelmann, an artist who goes by Beeple. But what Rodriguez-Fraile sold was not an everyday video file. The art is attached to something called a nonfungible token, or NFT. Like the cryptocurrency Bitcoin, NFTs run on blockchain technology. Unlike Bitcoins, each NFT can be a unique digital property—one NFT can represent ownership of a specific work of art.

It can also be designed to suit a creator’s needs: NFTs connected to Beeple’s artworks, for instance, give him a 10% royalty every time his art changes hands. Far more important, Beeple’s NFTs have his signature and proof of sale built into their code. There’s no way to fake or forge or replicate one of his artworks, at least as long as the NFT is considered integral to the work.

NFTs’ ability to confer uniqueness has led to a boom in digital art’s collectibility. Before, anyone could replicate an image an infinite number of times, making it impossible to create the perception of scarcity or value. There was no way, in other words, to build a market. NFTs offered a solution.

There could be infinite JPEG files of an artwork, but only one “real” image specified by the NFT. Or six. Or 100. Whatever edition size the artwork’s creator specified was what it would be. With an almost literal flip of the switch, a market was born.

There is a tendency to compare the boom in NFTs with the rally in GameStop shares—another recent, jaw-dropping value creation story that also seemed, to outsiders at least, to have come from nowhere. It’s a particularly seductive narrative because the same people—young, tech-savvy men—appear to be behind both phenomena.

But there’s a big difference. Critics of GameStop buyers say the stocks became detached from the company’s fundamentals: A stock price is supposed to reflect things like profit, earnings, and assets.

This is not how the art market works, and it’s not how it has ever worked. Paintings aren’t valued based on the price of the paint used on the canvas, and Jeff Koons’s Rabbit sculpture didn’t sell for $91 million at Christie’s because of the amount of steel used to make it. (The sculpture is 41 inches high.) Art prices might rise and fall, but not because of fundamentals; instead, consensus alone confers value.

A good example—and a precedent for NFTs—is the development of the photography market. Like digital art, a photograph can be reproduced over and over and over from its original negative. Yet despite that reproducibility, not all prints are priced accordingly.

“The market has always had ways in which to maintain value,” says Geoffrey Batchen, a professor of art history at the University of Oxford who recently published the book Negative/ Positive: A History of Photography.

Consider, Batchen suggests, Ansel Adams’s 1941 photograph Moonrise, Hernandez, New Mexico. “He made at least 1,300 and possibly more prints from that negative,” Batchen says. “But if you look at auction catalogs, they will carefully parse which were the ‘better’ ones: which were printed by Adams alone, which were signed by Adams, which were made for portfolios.”

To be clear, the image is the same, though Adams kept adjusting prints’ contrast and size. But it’s Adams’s signature or other minor distinctions that delineate a $50,000 print from one that’s worth $650,000. “There is no logic to it other than the need to maintain capital,” Batchen says. “It’s entirely a market conception imposed on this object.”

While this distinction might be lost on outsiders, many NFT collectors are willing to spend huge sums, at least in part, to impose and normalize a similar market framework for digital art.

Before NFTs, “digital artists haven’t really gotten what they deserve,” says Tim Kang, a 27-year-old who says he’s spent about $1 million on almost 200 digital artworks. “It’s just one of the most artistic mediums, and [digital artists] do work for others, and they don’t get any recognition for it, hardly.”

Kang was dragged into the spotlight in January, when he spent a then-record $777,777 (and 77¢) on a collection of artworks by Beeple. “It was hard for me to process at the time” why he’d made such a big purchase, he says. Only later did he realize, he says, that “I wanted to ensure that this is valid, that this is the future. I was taking a stand for our future of creative liberation.”

A finance-minded skeptic might say the NFTs’ success is a product of the cryptocurrency boom, meaning there are lots of people sitting on fortunes in digital tokens looking for something to buy. But that’s hardly different from the way a bull market in stocks can push up the auction price of a Picasso.

Batchen says the emergence of NFTs represents both the future and the past of the art market. “There’s a continuity here, across the history of art,” he says. “Especially when you come to media that are capable of multiple reproductions like prints and photographs and digital images.”

The real issue, he says, “is not the artificialness or otherwise of the value of digital objects. It’s can they survive the obsolescence of the medium that conveys them?” In other words, are hard drives and blockchain technology as durable as well-preserved canvas and oil paint?

Rodriguez-Fraile, who says he’s spent seven figures on digital art, isn’t worried. “Are these going to be here in 500 years? That’s a potential concern,” he says. “I’m sure that something will happen along the way and some [digital art] will get lost. But it will certainly be a lower percentage than the physical art that’s created in the world.”

Updated: 3-7-2021

NFT-Based Music-Sharing And Streaming Sees Opportunity For Mass Adoption

3 million active users help lift Audius (AUDIO) to a new all-time high.

Audius price hit a new all-time high after the decentralized music streaming platform surpassed 3 million active users and developers hinted at future NFT integrations.

As blockchain technology increasingly becomes part of the mainstream conversation, its integration with today’s most used technologies is bound to increase. This means that it’s only a matter of time before video streaming, digital music and social media see gradual blockchain integrations take place.

Audius (AUDIO) is one project that is chasing the first-mover advantage in the music streaming sector. The music-sharing and streaming protocol facilitates transactions between creators and listeners, making it relatively effortless for users to distribute and monetize audio content.

The project has received increasing attention for its approach to decentralizing the music industry and on March 2 the team celebrated reaching 3 million monthly active users.

Data from Cointelegraph Markets and TradingView shows that the price of AUDIO surged 108% since the start of March from a low of $0.38 to a new all-time high of $0.79 on March 4 as the altcoin’s trading volume spiked from $3 million to a record $55 million.

Staking Incentives Drive User Adoption

The first major increase in users followed the project’s October 2020 launch and the activation of staking on the Audius platform in December. This enabled AUDIO holders to earn a 7% yield for tokens that were staked on the network while they listening to music and interacted with the protocol.

By the end of January, the platform had 1.8 million active users and a total of 122 million AUDIO tokens staked on the network. These figures have since increased to 3 million users and a total of 182.5 million staked AUDIO as the platform continues to integrate new features that incentivize community involvement.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for AUDIO on Feb. 28, prior to the recent price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

As seen in the chart above, the VORTECS™ score for AUDIO hit a peak of 69 on Feb. 28, just before the start of a prolonged uptrend in price which was further identified by a VORTECS™ score of 80 on March 1. After pulling back over the next 3 days the score again spiked to 70, just hours before a significant rise in the price of AUDIO.

On March 5, the project revealed its plans to integrate non-fungible tokens (NFT) into the protocol as part of its effort to offer a full-service decentralized platform and expand its user base.

NFTs have become a hot topic in the cryptocurrency sector in recent months, and their integration into the AUDIO platform is likely to bring a renewed wave of interaction from users.

As blockchain technology continues to become more prominent in mainstream society, Audius appears well-positioned to become a leader in the streaming music space thanks to a rapidly expanding user base and a growing list of incentives that entice users to stay active on the platform.

Updated: 3-9-2021

How The NFT Boom Explains Square’s (Jay-Z) Tidal Buy

Why on earth would a payments company buy a music streaming service?

By now, you should have heard of non-fungible tokens (NFT) and the change they are driving in the art and music world.

The space is moving very rapidly, and economic models for scarce digital media are emerging. Musician Grimes has sold her art print for $6 million, DJ 3LAU sold out a crypto-digital music album for $11.6 million, Beeple’s NFTs are currently in auction for $3.5 million at art-house Christie’s while Nifty Gateway had a single one of his pieces go for over $6 million. Even more interesting is the impact on royalty models and intellectual property ownership.

The Eulerbeats project, which pairs algorithmically generated music with artworks, has driven nearly $2 million in royalties paid to owners of the original musical collectible, separate and apart from the initial issuance.

People who understand modern media, like Mark Cuban and Gary Vaynerchuk, are also both in. We are not saying that we should just listen to influencers and blindly follow. For example, John McAfee was very … vocal … about promoting token offerings in 2017, and has now been charged with a $13 million fraud.

But the core difference here is that McAfee was shilling projects for personal gain. In today’s cycle, industry participants are realizing the core change in market structure, and describing it to others. So let’s break down what that change really is.

Understanding The Economic Impact

We are over 20 years into the internet revolution. What is clear is there is not just one technological change, but multiple waves of transformation. Each carries with it a social and philosophical outcome.

We thought that open, endless access to the world’s media would be fantastic and freeing. That we would have an intellectual and scientific Renaissance as a result. And to some extent, that has indeed happened. But it has happened at deep cost.

Starting with the chart on the right above, picture the Supply and Demand of music. You can use the same shorthand for other information, like books and newspapers. This is supply and demand in the physical world at the aggregate level for the industry. So you might sell 1 million CDs for $12.99, but only 500,000 CDs for $15.99. Based on those slopes and elasticities, some aggregate amount of production and commerce occurs.

Now we introduce Napster. The price of an individual CD or song goes to $0 for those who know how to use peer-to-peer file-sharing software. That averages out to non-$0 in the population, but we know a revenue pool collapse of 50% or more actually occurred. The shape of the supply curve is remade by “democratizing” technology.

At the much lower price, we shift down the Demand curve to a much larger consumption of media. Today, that includes all of YouTube, TikTok, Spotify, and the long tail of services. There has been a massive demand side expansion along the curve from technology.

As a result, there has also been a collapse in artist revenue pools (i.e., quantity times price). We won’t belabor how little musicians earn from Spotify too much, but an illustration is provided below. You get $4 per 1,000 streams, and would need about half a million streams to make a living wage in the United States.

We also footnote that the digital rights management efforts of the 2000s was an effort by the music labels and the publishers to take back control of p2p distribution. Despite Metallica’s best framing, it was *not* a grassroots effort by the artists that directly benefited the creators. DRM was an attempt at preserving intermediation.

Now a lot of creators actually love the huge audiences they are able to access and are allergic to any sort of capitalist overlay for the remix culture of the internet. Part of being techno-literate over the last 20 years has meant being pro-file sharing. It has meant supporting the destruction of walled gardens, going open source and removing legal barriers, and even ending the concept of ownership.

Blockchain-based NFTs reintroduce the concept of property rights into digital media markets, and they do so through software-enforced capitalist logic. One can own art again. Is that good? Is that bad? That remains a philosophical question.

In revisiting our toy model, the core provision of endless music to the market has not changed. Instead, we add on a new market for ownership. It is one thing to experience a song by listening. It is another to own the original print and its underlying economic earning power. There is now a steeply expensive, very niche market of digital objects.

There is also now a change in the demand curve, such that there are some collectors and purchasers that – all of a sudden – have the desire and capacity to participate in the new market. Many of these participants are crypto rich, collecting status and binary options.

Conceptually, we are also bringing media to financial markets, joining creative output and its $10 billion per year financialization. In the traditional markets, this would be something like the Hipgnosis Songs Fund.

“Square is buying a unique go-to-market strategy. It is also getting a lot of artists as customers, who are in essence running small businesses. “

Digital streaming services are growing over time and have fixed the publisher’s revenue problem. At scale, there is sufficient income generation from owning the rights to songs, and the different type of royalties that they generate (e.g., mechanical, performance and so on).

You can see also the massive asymmetry between distribution and manufacturing. Today, most value is sitting with the storefronts. This is the thing that will potentially change. Much more value could be sitting with the artists, who increasingly have a direct relationship with their fans through social media.

Putting the royalty economics on-chain, and turning those into a liquid market connected into decentralized finance is a pretty large paradigm shift. You could own the royalty stream. You could collateralize it to take out a loan. You could stake it as an object that allows you some governance rights. You could create a portfolio or basket of various creative objects, and turn them into an index that generates dividends. You could lever up that index and buy downside protection. And so on.

As an example of this already, NFTX is a DeFi project that has bundled CryptoPunks into indexes, which can be purchased in a fractional manner. As CryptoPunks sell for millions of $, they become inaccessible status symbols. But, if you want to diversify your portfolio with exposure to some original blockchain-based assets, PUNK-BASIC or PUNK-ZOMBIE stand in as derivative exposure backed by the NFTs.

In the medium to long term, there will be an oversupply of tokenized art. Creators are realizing they have an asset they can sell directly to their audience, and this is still quite novel. Once all creators realize this, supply will go through the roof.

Thereafter the novelty of collection will wear off, and it is likely that demand will also settle back down. Prices will reach some other equilibrium than the one we are seeing currently. Yet, early adopters have the opportunity to grab a share and to innovate their way towards new platforms.

Key Takeaway

It is with this lens, for example, we should look at the acquisition of Tidal by Square from Jay-Z. Tidal has 70 million songs and 250,000 videos, and is being majority-bought by the payments processor for $300 million. According to estimates from ARK Invest, Tidal runs around $170 million in revenue, and has 1 million to 2 million subscribers paying $13 per month.

Why does a mobile wallet want to own this property? In part, the customer acquisition strategy for Cash App has been through influencers and the hip hop community, including by giving out bitcoin to followers. This is a massive leverage growth hack.

Square is buying a unique go-to-market strategy. It is also getting a lot of artists as customers, who are in essence running small businesses. Being a small business banking alternative, Square is well positioned to (1) bank and monetize the creators, and (2) then use the voice of the creators to grow adoption of Square itself.

This is CEO Jack Dorsey playing five-dimensional chess. As another example of the same insight, look at his other company, Twitter’s, roadmap to add paid subscription (“super follow”) features of its own content creators. In building financialization into the social network, the company is taking economic share back from third party tools that aggregate and represent influencers. Instead of ad units disappearing into direct messages and talent agencies, Twitter becomes both a creative and a financial platform.

Should You Buy A Bitcoin-Inspired Image Of Lindsay Lohan?

Crypto artworks featuring the likes of Biden, Trump and a cartoon cat are all the rage. Here’s what you should know about such collectibles, called NFTs.

Great art usually defies easy explanation. Perhaps that’s why it’s seemingly inexplicable that the surge in Bitcoin and other cryptocurrencies has given rise to its own world of masterworks.

Lindsay Lohan starred in a beloved piece of art — “Mean Girls” — 17 years ago, but these days she’s minting and selling her image for thousands of dollars through another artform: non fungible tokens, or unique digital collectibles.

Musician Grimes (and partner of Bitcoin fan and mega-billionaire Elon Musk), Dallas Mavericks owner Mark Cuban as well as scores of other famous and non-famous people around the world are getting in on the action around such NFTs.

These digital collectibles — in myriad iterations such as memes, pictures, animations and videos — have been getting made and sold for several years, but were relegated to the realm of hardcore crypto enthusiasts until recently. Their connection to digital currencies is that the same technology (blockchain) underpinning virtual coins also helps ascribe ownership and authentication to these artworks.

Over the past few months, interest in NFTs has exploded as cryptocurrencies gained mainstream acceptance and pop-cultural cachet. Prices have hit eye-watering heights, with total sales topping $60 million last month versus less than $250,000 a year earlier.

Should investors who have long turned to art as a tangible way to enliven both their collections and portfolios now consider buying a GIF animation rather than, say, a bronze sculpture? After all, established financial institutions are increasingly warming to the idea of putting money into digital currencies, so why not invest in a work associated with crypto, you may wonder.

Here’s What You Need To Keep In Mind If You Are Considering Taking The Plunge:

How Are NFTs Doing?

The current size of this nascent market is hard to estimate because of the way NFTs are structured. In essence, every piece is its own individual market. Still, an annual report by NonFungible.com, a blockchain gaming and crypto collectible database, estimated that the overall NFT market was worth more than $250 million last year (up 299% from 2019), even before the recent surge in interest.

What’s clear is that people are willing to pay big money for NFTs. One collector who calls himself a “digital asset investor” recently resold a digital artwork of Joe Biden and Donald Trump nude for $6.6 million. Meanwhile, the iconic Nyan Cat GIF and a video of LeBron James separately fetched hundreds of thousands of dollars. Grimes sold $6 million worth of digital art in late February, and one picture of Lohan’s face went for $17,000. Another fetched about $44,000.

Much like a prime Picasso, it’s the scarcity of NFTs that allows them to command such high prices. Unlike regular content that can be endlessly copied and replicated online, the blockchain tech behind NFTs allows unique signatures confirming authenticity as well as proof of ownership to be assigned to digital artworks, making each collectible one of a kind.

“There wasn’t a way to own things or know that you owned them online before this,” said Matt Hall, the co-founder of CryptoPunks, one of the earliest crypto art blockchain projects that was created by Larva Labs in 2017. “The miracle of digital is that copying was perfect and free. This is reversing part of that — which is kind of weird.”

If you’re questioning whether this trend will catch on in the traditional art market, know that even establishment darling Christie’s is getting involved. It’s the first major auction house to offer NFTs and is accepting cryptocurrency as payment.

What’s The Case For Buying?

If you think NFTs are the future. Ownership of digital art has proved a thorny issue since the advent of the internet. NFTs could potentially solve this by allowing for a secure way to store digital assets and prove ownership. Meaning you also won’t need to keep your new artwork in the family safe.

And some say we could be seeing the future of blockchain technology at work. “NFTs are a big statement on the longevity of blockchain technology, cryptocurrencies, and the monetization of content creation,” Douglas Boneparth, president of Bone Fide Wealth, a New York-based financial advisory firm, said.

The rock band Kings of Leon is releasing its latest album as a non-fungible token. Proponents of NFTs say that they even have the potential to expand to other areas like property, and that maybe one day anything could be tokenized.

If you think they democratize access to owning art. Investing in art has traditionally been the reserve of the upper-classes who can afford to invest in something that is likely to lose value. Crypto art could provide a way for those with less capital to invest in works.

Practically speaking, those who may want to invest in art, but have nowhere to put it up, could be interested in NFTs as an alternative. “You don’t have to think about where to put it when you want to buy it,” said John Crain, the chief executive officer of SuperRare, an online platform for the creation and collection of crypto art. “It’s expanding the market.”

If you think NFTs are less risky than buying traditional art. Investing in art can be inherently risky — how do you know it’s legit? Some think that investing in crypto art and NFTs may prove to be less so.

“Investing in an NFT, if you believe in the value, is in a way not very risky. You know that it’s an authentic piece, you know who made it, you know whether it’s an edition or not,” said Nanne Dekking, former Sotheby’s vice chairman and founder of Artory, a registry that records artworks on blockchain technology. “All the questions that you as a buyer of art will have to ask yourself when you buy traditional art are already part of the art work that you will be buying.”

If you’re interested in buying fractionally. Fractionalizing is an increasingly popular way to buy art in recent years, as it allows owners to buy shares in the same piece. The same argument for NFTs being less risky also applies to why it could be ideal for tokenization. Through blockchain technology, fractionalization can actually be part of the digital artwork itself.

“The reason why NFTs are so easy is because all the information is correct. If you start to fractionalize or tokenize an artwork — let’s say a Monet — it’s hard to know for sure you’re actually investing in the right Monet,” Dekking said.

…And What Are The Reasons To Steer Clear?

If you think NFTs are mostly hype. There’s been a huge amount of noise around NFTs in the last few weeks. Naysayers argue that this could all just be hype, pushing prices up and inevitably ending in a crash. Data provided to Bloomberg by CryptoPunks showed that a large portion of the total value of its transactions came over the last four weeks.

Since 2017, CryptoPunks works have made about $95 million — of which around $81 million was in the past month.

“It may be a bubble, we don’t know. There’s been all kinds of art streams and art movements that in the end turned out to be, at least financially speaking, stuck in a bubble,” Dekking said.

If you don’t understand them. It probably goes without saying that you shouldn’t invest in something you don’t understand. The main argument against crypto art and NFTs is that there’s simply no point to them. Critics ask why you can’t just make do with a screenshot or a print-out of a piece of digital art. Some just don’t see the value in being able to prove uniqueness and ownership of something inside a computer.

“You have to be very careful unless you’re fully au fait with how blockchain and crypto tokens work. It has to be considered a specialist investment,” said Andrew Shirley, who created and compiles the Knight Frank Luxury Investment Index, which tracks the value of 10 asset classes including classic cars, art and wine.

If you believe that passion investments have to be tangible. When investing in art, the expert consensus is that you should always invest in something that you actually like looking at. With crypto art, yes you can carry it around on your phone or laptop, but you can’t hang it up in your living room or impress guests with it.

Shirley urges caution on calling crypto art a passion investment in the way traditional art fits this category. For luxury investments, he says it’s better to focus on the practical aspect of things.

“If you’re investing in art, buy art that you’re passionate about and enjoy looking at. Buy a car that you’re going to enjoy driving, buy jewelry that you’ll like to wear,” Shirley said.

Taco Bell Just Sold A Collection Of 5 Fast-Food-Themed NFTs

Proceeds from the sale of the digital collectibles will go to the Taco Bell Foundation.

Taco Bell has just sold a collection of non-fungible tokens (NFTs) on the Rarible marketplace.

* The fast-food chain created five different taco-themed NFTs, releasing five editions of each for bidding Sunday.
* The 25 tokens representing the mostly animated artworks listed with bids starting at 0.001 wrapped ether (WETH), an amount worth $1.79 at time of writing.
* The digital collectibles sold out in minutes with highest bids reaching 1.5 WETH.
* The profits for the venture will be donated to the chain’s charity Taco Bell Foundation, which raises money for young people’s education and career progression.

* Celebrities, artists and major brands are becoming ever more present in the burgeoning world of NFTs.
* Kings of Leon recently announcing the release of their latest album as an NFT, while a digitized version of a Banksy artwork sold for roughly $380,000 after the physical version was burned.

Updated: 3-10-2021

The Whales of NBA Top Shot Made A Fortune Buying LeBron Highlights

They were early to the hottest NFT market—and their collections are now worth millions of dollars.

Michael Levy was scrolling Twitter last September when he noticed someone mention something that he wanted to know more about. What is NBA Top Shot? he wondered.

This platform to buy, sell and collect officially licensed video highlights was months from becoming a market that would captivate and mystify basketball fans, cryptocurrency enthusiasts, sneakerheads, pandemic day traders and thousands of people stuck at home. But it wasn’t long before Levy texted his friends: “This could be big.”

He was so convinced that he decided to spend $175,000 over the next six months on digital trading cards. They are now worth $20 million.

The investment was a sizable one for Levy, a 31-year-old financial analyst who says his interests are sports, poker, markets and “trying to identify advantages and edges,” but it appears that he found the latter in Top Shot. It’s why he’s not selling.

“I continue to think it’s an asymmetric bet with fantastic upside,” he said.

Levy is one of the biggest winners of a manic new market that true believers say is the future of collecting and skeptics call a slightly absurd form of speculation. At the center of the frenzy are assets known as non-fungible tokens, or NFTs, which use the blockchain technology powering cryptocurrencies to authenticate digital art, memorable tweets and a remarkable variety of ephemera suddenly worth a mind-blowing amount of money.

The most popular and perhaps most confounding NFT market is NBA Top Shot. It has minted unlikely millionaires and left many scratching their heads as it processed more than $250 million in sales from 100,000 buyers over the last month alone.

The peculiar but lucrative subculture of Top Shot reminds others of a similar hit from the same company, Dapper Labs, in which people collected virtual cats instead of NBA highlights. CryptoKitties was a fad that was mostly forgotten after a few crazy weeks in 2017.

Now the idea is roaring back in part because Top Shot is built for a different audience: the average NBA fan. Dapper Labs cut deals to give the league and its players a slice of every transaction—the company takes a 5% fee—with the goal of reaching casual basketball consumers and not just blockchain evangelists. It’s working. Instead of swapping jerseys after games, NBA players are exchanging Top Shot moments.

“We knew this was rocket fuel,” said Roham Gharegozlou, chief executive of Dapper Labs. “The thing that surprised me is how quickly mainstream basketball influencers adopted it.”

For a generation accustomed to playing daily fantasy sports and gambling on their phones, there is nothing particularly odd about paying exorbitant sums of money for otherwise free NBA highlights.

Many of them are young. Some are now rich. The millionaires of Top Shot were the bullish investors who had the money to pour into an emerging market once they spied a profitable opportunity before the rest of the world could see it. Their luck, timing and knowledge of blockchain and basketball turned out to be worth a fortune.

They still have to explain to confused friends what they’re buying, why they’re not selling and how a glorified YouTube clip that can be viewed by the rest of the world can also trade for hundreds of thousands of dollars.

“If someone tells me they don’t see the value of diamonds, art, stamps, physical cards, these intangible items that don’t have intrinsic value, it’ll be impossible to get them across the line on a digital asset,” said Levy.

It’s easier to understand through another kind of collectible. A baseball card is a few cents of ink and paper, but the most valuable ones are limited in supply, reflect an experience and come with a guarantee of authenticity. Top Shot moments have the same forces working in their favor.

“It’s the story, the scarcity, the joy you get as a collector,” Levy said. “It’s not the ability to hold it in your hand.”

But there is some value to that, too. Gharegozlou recently ordered a video frame to display his clip of Vince Carter’s last shot in the NBA. It will live on a shelf next to his Larry Bird signed basketball.

One of the Top Shot whales is a 27-year-old software developer named Andy Chorlian. Except for the size of his bank account, he is typical of the Top Shot demographic. He traded Pokémon cards as a kid. He owns so many sneakers that they no longer fit in his Brooklyn apartment. And he wasn’t surprised by what happened once he discovered Top Shot. “I just became really obsessed,” he said.

Six months later, he owns roughly 3,800 moments, and they are valued around $15 million—give or take a few million bucks depending on the day.

Top Shot’s market was deeply inefficient when he started buying, and Chorlian took advantage by concentrating on the NBA’s superstars, since he felt those premium collectibles were the safest investments. He also made value plays by pouring funds into cheap rookie moments that had the potential to grow over time.

He owns 96 of the same limited-edition moment from RJ Barrett’s rookie season—there are 2,882 total—and snagged a chunk for $1 and $2. The lowest asking price for this layup is now $1,900. One went for more than $4,000 last week.

Chorlian flipped part of his collection to pay taxes—he also sold a portion of his cryptocurrency holdings to cover his student loans—but otherwise he’s staying in the market passively. “I spent more time thinking about Top Shot when every moment was $5 than I do now,” he said.

But to make a fantastic amount of money, it wasn’t enough to buy on the cheap. There were times when Levy and Chorlian had to splurge.

Levy set the record for the highest price ever paid on Top Shot when he purchased a Giannis Antetokounmpo dunk in late December. The serial number: 34. His jersey number: 34. The price: $8,034.

A few weeks later, Chorlian bought a special LeBron James tribute dunk to Kobe Bryant, a moment that felt canonical to him. His purchase was also the most expensive in Top Shot’s history. The record of $71,455 lasted for an hour.

It was around that time when Levy was offered $100,000 for a LeBron James moment. He refused. And he knows how that sounds. But the reason he said no was simple.

“I think it’s worth more,” he said.

Top Shot had its GameStop moment another few weeks later. A single day in late February brought a spike of $46 million in sales—including the current marketplace of $208,000 for a LeBron James dunk.

A small group pooled their funds together to buy that clip, including Peter Jennings, who was busier than any of his partners that day. As it turned out, Jennings was in the hospital: His wife was 16 hours into labor. He was about to become the father of a baby daughter.

The action has been so dizzying that Levy and Chorlian do their best to ignore it altogether. The market has dipped since then, but Levy says he tries not to focus on short-term noise, and Chorlian says he’s comfortable with volatility as 95% of his net worth is held in cryptocurrencies.

In the worst-case scenario of a Top Shot crash, he figures he would still have a job that pays well. “I’d be in the same position as a lot of 27-year-olds in the United States,” said Chorlian, who described himself as “a bit of a degenerate gambler.”

But he wouldn’t be able to cash out right now even if he wanted to.

Top Shot users have to wait 30 days before they can withdraw money, and there are limits for certain users because of the company’s safeguards against money laundering, Gharegozlou said. The more than 10,000 approved to withdraw money became a minority as demand exploded, which remains a source of frustration for Top Shot’s many new users.

Gharegozlou cautions that Top Shot is still in beta testing and says he’s confident that marketplace outages, technical difficulties and other challenges of scaling a business will be worked out.

Levy made an investment in Dapper Labs in February as his Top Shot collection was growing in value, a stake that increased his exposure to the risks of an unpredictable industry. He doesn’t have to be told he should be diversifying. “Any traditional portfolio theory would say this is too outsized an asset,” he said.

Every time he looks at his account and sees a previously unimaginable amount of money is a reminder that he must decide what to do with his millions of dollars. His plan for now is to do nothing. He is holding.

“I don’t know where this is heading,” Levy said. “I just know that it has enormous potential that no other investment I have access to can mimic.”

Gaming Crypto-Artists Court Controversy While Cashing In On NFTs

Last week, the artist Ben Mauro was dividing his paychecks into three categories: rent, food, and art. Now, suddenly he’s a multimillionaire.

Mauro, who has created concept art for films including The Hobbit and video games such as Halo, is newly wealthy thanks to the phenomenon of non-fungible tokens, or NFTs. These tokens are a type of cryptocurrency, similar to Bitcoin, but each one is unique and can’t be replaced or replicated.

They’ve grown popular among digital artists because they serve as certificates of authenticity. In the online world, where anyone can replicate images an infinite number of times, NFTs allow artists to create a stamp of ownership. With ownership comes value.

Over the past few months, NFTs have exploded in popularity as cryptocurrencies gained mainstream acceptance. Collectors dished out more than $60 million in February for gifs, jpegs, memes and other art that’s only available on a screen. Video game artists, who are native to digital creations, have embraced the phenomenon.

Raf Grassetti, the art director of the popular video game God of War, has been selling 3D models of celebrities like Tesla Inc. Chief Executive Officer Elon Musk for tens of thousands of dollars. Halo Infinite art director Nicolas Bouvier sold a painting of a castle Tuesday for nearly $35,000. And Mauro’s collection of art, which he sold in the form of collectible card packs, has earned more than $2 million on an NFT website called Viv3.

“I still kind of don’t believe it,” Mauro said. “This whole thing moves so fast. One day, alright, I’m broke. Now I’m a millionaire. Sure, I guess.”

The NFT phenomenon has made some top artists rich, but it has also been controversial in the video game art scene. Critics point to the astronomical energy costs of mining cryptocurrency, which requires high-end computers to operate constantly at full power, as an ecological disaster.

Most NFTs are linked to a cryptocurrency called Ethereum, which was estimated in 2018 to use more energy than Iceland. The creators of Ethereum have been promising for years to switch to a more ecologically friendly mechanism, but that hasn’t yet come to fruition.

Others say NFTs deepen the wealth disparity among artists and that they are prone to scams, since the creator of an NFT doesn’t have to prove ownership of the original work. Already, NFT marketplaces are seeing instances of stolen art and copyright violations.

The controversy became more pronounced on Monday night when ArtStation, one of the most popular websites for video game artists to share their work, said it would open up a market to buy and sell NFTs. Thousands of artists slammed the decision on Twitter and threatened to delete their accounts.

By Tuesday morning, ArtStation had backtracked, apologizing and saying in a statement that it hoped “at some point in the future we’ll be able to find a solution that is equitable and ecologically sound.”

“I would never engage with Ethereum NFTs and cryptoart,” said Douglas Copeland, an artist who has worked on games like Lawbreakers. “I don’t believe I could morally do that with climate change currently hitting at the rate it’s going.”

Mauro’s newfound wealth isn’t in Ethereum. It’s actually tied up in a cryptocurrency called Flow that claims to have less of a carbon footprint than its peers. The downside is that it’s not available in the U.S. yet, so Mauro can’t actually get his money.

He says he joined a Flow-operated network because they recruited him and he was impressed by their track record of success with sites such as the trading card marketplace NBA Top Shot. “I’ve seen all the ups and downs, so my cynicism level is pretty high,” Mauro said. “I plan for the worst and hope for the best in all situations, and I’m doing that here.”

Mauro compares the NFT phenomenon to the music industry, in which a single hit song might alter a musician’s entire career. Digital art hasn’t been capable of that until now, he says. “In the same way not every person who picks up a guitar will have a big hit song, it at least gives all of us an opportunity to have that chance,” he said.

Even as NFTs have created a way for artists to claim ownership of their work, there are still loopholes and potential for fakes. On Tuesday, many video game artists were warning one another on Twitter to look out for copyright thieves and even ambitious hucksters looking to package and sell NFTs for the art contained in Tweets.

For Mauro, the potential reward outweighs the risk. He’s been following cryptocurrency for a few years and got involved with NFTs late last year. He said he was inspired to get in early after missing out on the opportunity to buy Bitcoin several years ago, when it was trading at closer to $500 than its current price of over $54,000.

“What Bitcoin did for money, this is going to do for art,” Mauro said. “I missed it for that thing, not going to miss it for this one.” He began working with Viv3 to create listings for some of the personal art he’d been making for the past decade, then began selling them on March 3. His collection sold out in seven minutes.

Updated: 3-12-2021

Beeple’s NFT Fetches Record $69 Million At Christie’s

Ultimate Resource On Non-Fungible Tokens

Mike Winkelmann, Professionally Known As Beeple

The art world and the crypto asset markets witnessed a watershed moment Thursday when a purely digital work of art by Mike Winkelmann, professionally known as Beeple, fetched a record-breaking $69.3 million at a Christie’s online auction.

Everydays: The First 5000 Days, became the third-most-expensive work sold by a living artist, putting the self-taught Beeple after Jeff Koons and David Hockney on the list. The sale marks the highest price for any winning bid placed online, Christie’s said.

It’s also the most expensive digital asset to ever sell with an accompanying digital certificate of authenticity known as a non-fungible token, or NFT, according to NonFungible.com.

“Artists have been using hardware and software to create artwork and distribute it on the internet for the last 20-plus years but there was never a real way to truly own and collect it. With NFTs that has now changed,” Beeple said in a statement. “I believe we are witnessing the beginning of the next chapter in art history, digital art.”

During the last few minutes of bidding, a total of 33 active bidders from 11 countries competed for the piece, with 22 million visitors tuning into the auction, Christie’s said. The winner, whose identity Christie’s declined to disclose, will receive the work along with its unique token at his cryptocurrency account.

Everydays: The First 5000 days was minted by Beeple on Feb. 16, depicting an amalgam of political cartoons and lush, video game-like scenes. The 39-year-old graphic designer created the collage over more than 13 years, completing one image each day.

Christie’s said the resulting mashup will remain intact, although its owner will be able to zoom in to see the 5,000 individual artworks, ranging from early portraits of Beeple’s uncle, who he nicknamed Uber Jay, to a political cartoon that depicts former vice president Mike Pence with a fly landing on his head during the 2020 vice-presidential debate.

“This is work that has just as much craft, message, nuance and intent as anything made on a physical canvas and I am beyond honored and humbled to represent the digital art community in this historic moment,” Beeple said.

NFTs have drawn much attention lately. Twitter founder Jack Dorsey recently turned his very first tweet into an NFT, and a trading-card like video NFT of NBA star LeBron James dunking a basketball recently sold for over $200,000.

Christie’s will embrace the trend and hold further sales of NFTs, the auction house said.

“Beeple’s success is a testament to the exciting possibilities ahead for this nascent marketplace,” Noah Davis, a specialist of Post-War and contemporary art at Christie’s, said in a statement. “Today’s result is a clarion call to all digital artists. Your work has value. Keep making it.”

Updated: 3-14-2021

Crypto Investor MetaKovan Announced As Buyer Of $69.3M Beeple NFT

Christie’s has disclosed the buyer of the record-setting NFT sold Thursday.

MetaKovan, the pseudonymous founder of non-fungible token (NFT) fund Metapurse, is the proud owner of the Beeple NFT auctioned by Christie’s on Thursday for $69.3 million.

“When you think of high-valued NFTs, this one is going to be pretty hard to beat,” MetaKovan said in a press release issued by the 255-year-old auction house.

MetaKovan paid for Beeple’s “Everydays” in ether (ETH, -3.07%), Christie’s confirmed, beating out Tron founder Justin Sun in a last-minute bid. The final sale price was 42,329.453 ETH. Appearing on CoinDesk TV earlier Friday, Beeple (aka Mike Winkelmann) said, “I probably will keep a percentage of [my earnings] in ether.”

The auction house said its website hosted around 22 million visitors for the final moments of bidding on the most expensive NFT ever sold.

Not much is known about the pseudonymous MetaKovan other than the association with the Metapurse NFT fund, the largest such fund in the world. Metapurse already owns a smattering of Beeple pieces that it has offered to the public in fractionalized form through B20 token sales.

The B20 token surged on the news, shooting up from $16.31 to $26.54 before settling back down to $19.73 as of press time.

Metapurse has previously commissioned virtual reality architecture group Voxel Architects to design virtual art museums in three digital worlds.

Updated: 3-15-2021

Sophia The Robot Set To Auction NFT Digital Artwork

The popular humanoid robot will become the first artificially intelligent being to create nonfungible token-based artworks.

The booming nonfungible token space is about to experience another expansion, with the robot Sophia set to auction its own NFT digital artwork.

According to an announcement on Monday, the social humanoid robot will hold an NFT auction via the Nifty Gateway platform on Mar. 23.

Sophia’s NFTs are reportedly based on the works of artist Andrea Bonaceto with IV Gallery, a Los Angeles-based gallery, in charge of curating the collection.

As part of the Mar. 23 auction, multiple artworks from the NFT collection will be showcased on Sophia’s and Bonaceto’s social media channels.

Commenting on the creative process behind Sophia’s interpretation of Bonaceto’s art, David Hanson, creator of Sophia, told Cointelegraph:

“We fed Andrea’s works into Sophia’s own neural networks, along with many of Sophia’s latest paintings. Subsequently, she generated a powerful series of new images, which she then rendered both digitally and as brush strokes, which she painted with her own hands.”

According to Hanson, during the iterative process of developing the artworks, Sophia’s paintings began to develop a “unique personality” that also resonated with Bonaceto’s art.

Sophia’s foray into NFTs also likely represents an expansion of the robot’s grasp of cryptocurrencies. Back in 2019, the humanoid personality declared that it was aware of cryptocurrencies but was not using digital currencies.

According to the announcement, the upcoming NFT drop on Nifty Gateway is only the first in a series of digital art-related endeavors for Sophia. Hanson Robotics and SingularityNET, a decentralized artificial intelligence firm, will partner to create Sophia Collective.

For Hanson, Sophia Collective is an important step in creating a global community for open-source collaboration in AI-oriented digital art.

The popularity of NFTs continues to expand even outside the crypto space, with artists and musicians getting in on the hype. Earlier in March, Kings of Leon tokenized an album, raising over $1.45 million in the first five days of its sale.

Such is the extent of the frenzy that MoonCats, a long-dormant NFT collectibles series, has recently been “resurrected.” Meanwhile, the mania is also attracting critics who point to the carbon footprint of NFT minting.

How Non-Fungible Tokens Are Transforming The Art World

A massive intersection between the worlds of art and cryptocurrency is redefining the concept of ownership in the digital age—all to the tune of millions in sales for savvy artists. The surge of non-fungible tokens (NFT) allows virtual images, and their original underlying code, to be sold as unique works of art, even if copies of those same images proliferate.

This evolution was evident Thursday, when a purely digital work of art by Mike Winkelmann, known as Beeple, sold for a record-breaking $69.3 million at a Christie’s online auction. It was the third most-expensive work of art sold by a living artist, and the most expensive digital asset to ever sell with a NFT.

The buyer of the work was revealed Friday as Metakovan, the pseudonymous founder of Metapurse, the world’s largest NFT fund. The buyer will receive both the image and the token, according to Christie’s.

The online world produces no shortage of art from photo edits to memes to animated GIFs. Meanwhile, any physical artwork—from drawings to paintings to photographs—can also exist as digital imagery. Once transformed to 1s and 0s, that artwork can proliferate throughout the internet and end up just a simple screen capture away from your computer.

A NFT, once assigned by an accepted blockchain clearinghouse, attaches to the digital artwork permanently and marks it as original, official, and unique. That NFT allows a buyer to own the artwork, even if copies of it exist on hard drives and servers around the planet.

In the last month, cryptocurrency NFTs sales have boomed throughout the art world. According to the ranking site CryptoSlam, the top five NFTs during that period generated more than US$366 million in profit. The boom has everyone from artists to academics exploring what it means to own something in a crypto world.

Marc Craig, successful London artist and curator of the Chopperchunky Gallery, sold more than 12 of his original pieces as NFTs in less than two weeks. He discovered this crypto market through online news articles, realizing the potential to create individual digital art pieces stamped as exclusive entities.

“There is a real sense that the pandemic is changing everything,” Craig says. “People are actively looking for ways to not only make money, but also to connect in the online world. The NFT art community is very vibrant and supportive, and I had no anxieties about getting started because it was easy to connect with the energy it’s creating.”

Craig describes an NFT world of unusual synchronicity. He sees artists who both sell their work as NFTs and also buy NFTs from other creators. He finds collectors who sell are becoming artists themselves. He tracks corporate entities funding the purchases of major NFT artwork.

In Los Angeles, artist and portrait photographer Justin Aversano creates his own work and collaborates with partner Nicole Buffett (Warren’s artist granddaughter). Through their individual and combined works, they sold more than 130 pieces in two weeks to the tune of more than $100,000. He describes the emerging NFT phenomenon growing from a sense of community.

“We help each other,” Aversano says. “Those of us who found success in NFT art look to bring in other artists and help them through encouragement and collaborations.”

For Aversano, one of the most unique aspects of selling through the blockchain world is the actual physical artifact outside the crypto environment is still in play even once its digital cousin sells. Artist and buyer can negotiate what’s to become of the real world creation. Artists sometimes include the original with the NFT, charge an additional fee for the object, sell the hardware piece to another buyer, or simply keep it.

Aversano retained the material originals for some of his more recent NFT successes and hopes to gift them to a gallery or library for permanent display.

“With NFTs, the physical work is actually a bonus,” Aversano says. “The buyers of NFTs don’t want stuff. They view ownership in an entirely new way.”

Deborah Small, a professor at the University of Pennsylvania Wharton School of Business disagrees, pointing out that the idea of owning an NFT isn’t that far removed from the concept of owning something in the material art world.

“The concept of art is much more than the experience of seeing it,” Small says. “You can go visit the Mona Lisa in the Louvre or buy it as a postcard—but, you don’t own the Mona Lisa. By purchasing an NFT, you buy the implicit knowledge that you’re closer to the art’s curator.”

Small suggests cryptocurrency investors buying NFTs are more akin to gamblers, making a buying decision on a different level than traditional investors.

“It’s a decision based on a consumption idea, not a business idea,” she says. “The cryptocurrency buyer perceives risk in a different way. It can seem strange to others because the NFT is virtual, but the buyer sees it, likes it, and buys it so he or she can feel closer to the artwork, the artist, and their peers.”

Dr. Carey K. Morewedge of the Boston University Questrom School of Business studies how cognitive processes influence human judgments and decisions. When considering why art buyers would spend millions purchasing NFTs for images they could pull off the internet for free, Morewedge looks at the concepts of control. At its simplest level, the non-fungible tokens allow buyers to take possession of the digital as they would otherwise seize on the physical at purchase.

“Our identity is expressed through what we own,” Morewedge says. “A buyer pays money for the NFT so they control that piece of art because we exert control over our world through ownership. The idea of making something uniquely your own is very powerful. It’s what’s called the ‘endowment effect’—we value what we own over the same thing we don’t own.”

Morewedge suggests that the early NFT sales bringing in seven figures exploded onto the scene due to their historical significance.

“The NFT is changing the perception of ownership through user-generated content,” Morewedge adds. “It could signal the start of redesigning how platforms are monetized by changing concepts of who owns the material—by determining ownership through blockchain and not governmental means.”

Back in London, Craig sees the NFT experience so far as a rollercoaster ride.

“I don’t see the market slowing—all thanks to the pandemic,” Craig adds. “The physical art world may need to play catch up out there.”

Updated: 3-16-2021

5 Legal Considerations When Dealing In NFTs

Just because securities laws might not apply doesn’t mean other laws won’t, says our columnist.

Recently, I’ve been getting a ton of inbound relating to non-fungible tokens, or NFTs.

For those of you living under a rock, an NFT is an object, on a decentralized system such as Bitcoin or Ethereum, designed to be sui generis, i.e., unique. This is in contradistinction to cryptocurrency tokens, where one unit of cryptocurrency is ostensibly no different from any other, much like one U.S. dollar is ostensibly no different from any other.

* Preston Byrne, a CoinDesk columnist, is a partner in Anderson Kill’s Technology, Media and Distributed Systems Group. He advises software, internet and fintech companies. His biweekly column, “Not Legal Advice,” is a roundup of pertinent legal topics in the crypto space. It is most definitely not legal advice.

When I buy a coffee with bitcoin, the shopkeeper doesn’t inquire about individual UTXOs (at least, not for the moment, although proposals to blacklist stolen coins could change that). All that matters is the coins land in his wallet and rack up a half-dozen confirmations. With NFTs the opposite is true: The provenance of the asset and its chain-of-title matters, and it matters forever.

As a result, legal thinking needs to be applied not only to NFT systems as a whole (much as it has been for the past several years when cryptocurrency developers seek out legal opinions as to the status of their blockchain systems) but also to individual NFT assets and the manner of sale of those assets.

Where early NFT experiments like CryptoKitties simply ignored these formalities and people bought the tokens anyway, new platforms are bringing increasing degrees of commercial, technical and legal sophistication to their products.

Here are five things worth considering. It goes without saying, this is not legal advice and I’m not your lawyer. But these might form a good jumping-off point for discussion with your lawyers as you build your offerings.

NFTs Aren’t Necessarily Securities …

The NFT craze hearkens back to the heady days of the initial coin offering boom in 2017. ICOs allowed blockchain entrepreneurs to pre-sell coins on networks not yet built. Although the theory of these offerings was that the tokens were collectibles or commodities – one prominent project referred to its pre-sold tokens as a “tote bag,” another described its as being akin to “fuel” – the U.S. Securities and Exchange Commission took issue with many projects that followed this fundraising template.

As the Telegram and Kik cases and the recently announced Ripple Labs enforcement action, make plain, pre-selling cryptocurrency tokens in the United States is not, legally speaking, a good idea.

NFTs, on the other hand, are collectibles. Legally this means they are easier to distinguish from “investment contracts” of the sort that get captured by securities laws.

The reason schemes like Ripple Labs’ have been caught within the U.S. SEC’s regulatory perimeter are because they allegedly satisfy the three prongs of the test in SEC v Howey. There is an investment of money in a common enterprise with the expectation of profits arising from the efforts of a promoter or third party.

The reason this rule does not apply to, say, a gold eagle dollar or a Magic: the Gathering card is due to the absence of a common enterprise and the absence of an expectation of profit arising from the efforts of promoters or third parties.

… But NFTs Can Become Securities Or Other Regulated Products

Let’s take a royalty contract, for example. Alice the Author wants to sell NFT-signed e-books of her popular young adult literature. She approaches Norman, the NFT platform operator, if he can make one for her.

Norman agrees to do so if he can split 50% of the profits of the initial sale and get a 5% cut of all secondary market sales thereafter. Alice and Norman sign a contract and the NFT is sold to Bob, who sells it to Carol.

Without more, there is not an obvious reason that either the royalty contract, the sale to Bob or the sale to Carol should constitute an investment contract (and therefore a security). The royalty contract is a private profit-sharing agreement.

The sale to Bob looks a lot like any other consumer transaction. Bob’s sale to Carol, similarly, is a private sale of a consumer good.

Alice could, however, inadvertently turn a non-security into a security if she tries to be too clever about monetization. For example, if Alice fractionalized the NFT and sold fractions of a book or profits from one, that might fall foul of the securities laws.

Similarly, if Alice made an NFT that was the beneficiary of cash flows from other NFTs, that would almost certainly be a security. Also, if Alice represented that the value of the NFT would go up as a result of efforts Alice was planning to undertake to make the NFT useful as part of an online platform yet to be built – in other words the “utility token” argument from 2017 – that also could move Alice’s NFT from unregulated territory into regulated territory.

An NFT that performs the function of a regulated product will be regulated like a regulated product. Changing the name of the thing to “NFT” isn’t enough to not apply financial services laws, any more than changing “IPO” to “ICO” was back in the day.
Know what you’re buying

Purchasers of NFTs should ask sellers what they’re getting in exchange for their money.

Depending on the functionality the NFT promises to deliver those questions will vary, but might include the following: Who is your counterparty? Who is obliged to render performance to you and what are they obliged to do? How do you enforce those rights and in what forum? Are you buying an original artwork, an image of an artwork, a right to make derivatives of an artwork or a right to display an artwork?

Are you buying information, copyrights, bragging rights or none or all of those things? Do you have the documentation to back all of that up?

Lawyers can help you parse what questions need to be asked for particular kinds of tokens. Ignoring these questions could result in significant financial or legal pain down the road, so it’s best not to ignore them today.

Just because securities laws might not apply doesn’t mean other laws won’t.

NFTs may be the Wild West of crypto, but this is not a lawless frontier – and failing to structure a consumer product correctly can land entrepreneurs in hot water.

It goes without saying, don’t lie. Don’t engage in deceptive trade practices. Don’t sell goods you don’t have. Don’t sell rights you don’t own. Don’t infringe on third-party intellectual property. Make sure you have the proper documentation to back what you’re selling.

Don’t use NFTs to launder money, don’t sell NFTs to North Koreans and don’t sell NFTs that obviously pertain to the commission of, or could facilitate, crime.

Platforms That Sell Legally Enforceable Rights Are More Likely To Succeed In The Long Term

A further problem with current NFT proposals is that in the mad rush to issue the tokens to eager purchasers, legal corners will be cut.

In one recent case, as part of an elaborate troll, an artist selling NFTs on OpenSea swapped out modern artwork for pictures of oriental rugs. The artist’s point was a simple, but important, one: Just because you have an entry on a database doesn’t mean that you have anything more than that. Just because an NFT seller is selling you an NFT that is associated with a painting doesn’t mean that you’re buying rights in that painting.

It is, of course, possible for NFTs to represent ownership in some underlying asset or artwork. It is possible, by contract, to transfer exclusive rights of ownership or to define the terms on which a creative work, whether written, drawn or coded, is licensed to an NFT holder.

Few platforms seem to be doing the legal legwork necessary to convey valuable rights together with their tokens. My suspicion is legally enforceable copyrights and hard-coded, on-chain monetization mechanisms will be a valued feature for NFT platforms, and the platforms with the most effective monetization schemes will attract the most in-demand content creators (and therefore the best content).

Moving up a layer in the stack, hardware devices and ad platforms could then be built to interact with these content networks and automatically pay creators license fees for their work. That way consumers are insulated from liability and creators know they will be paid for their work. Image aggregators like Getty and copyright enforcement law firms stand to lose big.

That’s why the NFT space is interesting to me, and why it should be interesting to you, too.

Rich Millennials Are Splashing Millions On Crypto Art

The pandemic hit the art world hard. But an influx of young, tech-savvy collectors has kept the market buzzing.

At the end of January, an impeccably preserved painting by Italian Renaissance artist Sandro Botticelli sold for a record $92.2 million. Six weeks later, a work that could not be further from the Old Master, a digital compilation of images by an artist who goes by the name of Beeple, sold for $69.3 million.

The two pieces are worlds apart but their desirability is driven by similar factors. Although the art market suffered from pandemic closures, it’s been saved by an undiminished appetite among wealthy collectors for prestige investments, as well as an influx of younger, tech-savvy buyers whom galleries and dealers have managed to reach online.

Even when art fairs and in-person auctions resume, the industry won’t forget its digital transformation. Last week’s blockbuster sale of “Everydays: the First 5000 Days,” by Mike Winkelmann, aka Beeple, suggests as much.

As the fourth most expensive piece of art sold at auction in the past year, Beeple’s “Everydays: The First 5000 Days” beat out many modern masters.

With stock markets and cryptocurrencies close to all-time highs, many investors have seen their wealth grow, just as they’ve had fewer trips and experiences to spend on. So those with money to spare have splurged on things.

The more modest have treated themselves to Louis Vuitton handbags and Gucci sneakers, driving demand for the biggest brands to pre-pandemic levels. The ultra-rich may prefer a Cy Twombly.

This didn’t make the art market immune to the pandemic, however. Global sales of art and antiques fell 22% from the year earlier to $50.1 billion in 2020, according to art economist Clare McAndrew’s latest state-of-the industry report for Art Basel and UBS Group AG. Traditional buyers had fewer opportunities to purchase, as fairs were cancelled and galleries were temporarily closed. Still, sales managed to stay above their previous low in 2009 in the wake of the global financial crisis.

The decline would have been much worse were it not for wealthy collectors who spent more time at home and wanted to beautify their surroundings with art. It was a similar picture with virtual works. More hours glued to a screen encouraged crypto investors — flush with Bitcoin gains — to explore the nascent medium of art attached to a non-fungible token (NFT), a digital certificate of authenticity that runs on blockchain technology.

Galleries and auction houses pivoting online also prevented a more precipitous fall. Web sales of art and antiques reached a record $12.4 billion in 2020, double the value of the previous year and accounting for 25% of overall market value, according to McAndrew.

The shift to digital selling has also brought in a younger generation of collectors, who are more active online and spend at higher levels. The Art Basel and UBS report found that three out of 10 millennial high net-worth collectors splashed out at least $1 million in 2020. That’s compared with 17% of boomer collectors. Christie’s said that 58% of the bidders for Beeple’s “Everydays” were millennials.

The influx of youthful buyers also seemed to affect tastes in the market, as interest in younger and more global artists grew. For example, the painter Amoako Boafo from Ghana achieved the second-highest revenue at auctions in 2020 among artists born after 1980, trailing only the late Matthew Wong, according to online database Artprice.com.

The most striking manifestation of the shift online has been the rise of crypto art, which you view on a screen rather than up on a wall. Blockchain technology has made it easier to establish the ownership of such digital art, something that has dogged the medium. Beeple’s “Everydays” existed for less than a month before it was auctioned last week.

Much of the move online will stick. While the art industry has traditionally lagged other consumer sectors, such as luxury and general retail, in adopting technology, the pandemic forced galleries and auction houses to invest in digital tools like online viewing rooms.

Crypto art platforms such as the Winklevoss brothers-backed Nifty Gateway have also sprung up, engaging younger collectors with limited-edition drops. The odds are good that we’ll continue to consume art on our phones and laptops.

Whether the wealthy maintain their appetite for art when travel and entertainment opens up remains to be seen. There’s also a question as to whether younger consumers will keep on buying.

But with markets and cryptocurrencies still soaring, and opportunities to spend still mostly limited for much of this year, the tailwind should continue. Savvy companies such as Christie’s will hope to profit from future Beeples as much as they do from Francis Bacons.

 Updated: 3-17-2021

Sotheby’s Auction House Is Getting Into The NFT Game

The nonfungible token craze continues to proliferate.

The creation and sale of nonfungible tokens, or NFTs, has become a revolution that is increasingly difficult to ignore. On March 16, British-American auction house Sotheby’s announced that they too would be entering this burgeoning ecosystem with the sale of tokenized art by a creator known only as “Pak.”

“We’ve been following the NFT space for some time and we’re excited this morning to be announcing an upcoming sale next month with an artist who is known as Pak,” Charles Stewart, the CEO of Sotheby’s, said on Tuesday during an interview with CNBC.

Pak’s anonymity has led to some discourse over whether they are a single entity, or a collective of multiple artists all operating under a single mononym. A September 2020 article from The Control noted that Pak might even be an artificial intelligence program or bot. Whatever the case, the artist is no stranger to the digital art space, boasting “decades” of experience according to Stewart.

Though NFTs first appeared in 2017, they have gained significant traction in the cryptocurrency industry over the past year. These tokens are provably unique, and therefore capable of representing individual items of tangible value. If two assets share fungibility, individuals can swap one for another, with no loss of fidelity.

For example, making a copy of a document on your computer, produces an exact clone of that file’s data down to the byte. Both the original file and its copy would be interchangeable one-to-one, and therefore fungible. In contrast, a nonfungibly saved piece of data is provably unique, and therefore rare.

Nonfungible tokens provide each individual asset with a traceable provenance, which acts similar to an autograph or certificate of authenticity.

“It’s still very early, needless to say, with crypto art in general,” Stewart told CNBC when asked about the quantity of digital artists that Sotheby’s will host. “This is new for all of us,” he said, adding “but there’s a lot that’s really exciting and we think has staying power.”

Stewart explained Sotheby’s decided to work with a well-known figure for its inaugural dive into the niche. This is what led them to Pak. “We’re going to be selling both one of one works of art [and] also what are called open editions in the NFT world, where many people can buy tokens for the same work,” he said, subsequently noting more unspecified upcoming “surprises” in the weeks ahead.

“I do think this is the start of something that you’ll see more frequently,” he explained. “This really has the potential to bypass a lot of the traditional gatekeepers and vetting processes of the physical art world.”

NFTs have popped up in many headlines over the past few months, with some art pieces selling for tens of millions of dollars.

Updated: 3-21-2021

Navigating Bitcoin Is As Much Art As Economics

The stratospheric rise of cryptocurrencies has upended how people, companies and even governments think about money.

As the world became increasingly digital, it stood to reason that eventually our money — how we create it, how we spend it, how we invest it — would become digital, too. The advent of Bitcoin, the first decentralized cryptocurrency, was a curious phenomenon, but in recent years it has skyrocketed in value (although its instability makes it not an asset for the faint of heart). Now companies are investing in crypto; the art world is enthralled by it; and governments are pondering how to manage its risks while still encouraging innovation. The only thing we’d count on?

Crypto is here to stay.

NFT Frenzy Buoys Stocks, Lifting Auction Houses, Game Makers And Musicians

A grab bag of obscure stocks are soaring after unveiling plans to get involved in the exploding digital-art scene being powered by NFTs.

Non-fungible tokens, or NFTs, are cryptographic assets used on computer ledgers referred to as blockchains, similar to the network that powers Bitcoin. They make it possible to track ownership and sales prices, as well as the number of copies in existence through each unique identifying code. They burst onto the mainstream consciousness last week when the artist Beeple’s “Everydays: the First 5,000 Days” sold for a record $69 million.

Takung Art Co., an online platform for artists to trade works, has gained around 900% since the Christie’s auction. Oriental Culture Holdings Ltd., a marketplace to sell sculptures, collectibles and stamps, almost tripled.

Entertainment stocks such as video game company Liquid Media Group Inc., and virtual reality-focused Integrated Media Technology Ltd. have likewise rallied off potential to tap the NFT space. Liquid, which signed a distribution deal with Atari this month, more than doubled after Atari launched an NFT-enabled crypto casino and partnered with Bondly to create an NFT gaming platform last week. IMTE gained as much as 80% this week as message volume around the company surged over 400% on Stocktwits.

Other companies have taken a sharper turn to engage with NFTs. Sino-Global Shipping surged as much as 34% after announcing it would collaborate with e-commerce public chain CyberMiles to launch an exchange for NFTs collectors, artists and investors to create and trade digital content.

The rush to invest in NFTs follows rallies seen in other hot stocks this year from pot stocks to EVs to Bitcoin as retail investors jockey to cash in on the next big thing.

Updated: 3-25-2021

The Line Between NFTs And Fine Art Gets Even Blurrier In New Auction

The family of Russian modernist Wladimir Baranoff-Rossiné is auctioning off a non-fungible token that happens to come with a 100-year-old painting.

The art market has not been kind to the late Wladimir Baranoff-Rossiné (1888-1944), an avant-garde artist whose sculpture sits in the permanent collection of the Museum of Modern Art in New York. Since June 2011, art by Baranoff-Rossiné has come to auction 100 times; about 60% of it didn’t sell, according to data from Artnet’s price database.

This is a stark contrast from his marketability just 13 years ago, when a painting of his sold for £2.7 million (roughly $5 million at the time) at Christie’s in London. “The bottom has totally fallen out of his market,” says James Butterwick, a dealer in Russian paintings based in London. “I’ve had access to serious works by Baranoff, and I could offer, and did offer, them to serious collectors. They weren’t interested.”

Now Baranoff-Rossiné’s descendants, who have a large collection of his work, are taking his market into their own hands. They’re auctioning an abstract painting from 1925 tied to an NFT, or non-fungible token, through Mintable, an online NFT marketplace that recently received an investment from billionaire Mark Cuban. The painting has remained in the family’s hands since it was created.

Additionally, nine digital-only pictures of other Baranoff-Rossiné paintings will be sold as NFTs in three auctions and six limited-edition sales beginning on March 25; the family will retain ownership of the original artworks.

“In terms of the NFT, it’s about being able to showcase my grandfather’s work to a different audience—and a wider audience,” says the painter’s grandson, also named Wladimir Baranoff-Rossiné. “It’s interesting: You’ve got the Beeple NFT selling at Christie’s, and we’re the opposite—the fine art piece is selling on Mintable.”

This isn’t the first time that old paintings have been attached to new technologies. Multiple companies already help authenticate, categorize, and register art collections using blockchain technology, operating under the premise that a foolproof, theoretically unalterable provenance will be of value to art collectors everywhere.

“People do like the trackability and traceability of information,” says Nanne Dekking, a former art dealer and the founder of Artory, which provides this service.

Where companies like Artory differ from Mintable is the way they assess that information.

Dekking argues that verifiable information about an artwork is valuable. Mintable, in contrast, has priced Baranoff-Rossiné’s painting under the premise that the NFT is the artwork’s value.

“This is an auction for an NFT that happens to come with a painting,” says Zach Burks, Mintable’s founder and chief executive officer. “It’s not a painting that’s auctioned that comes with [an] NFT.”

It might sound like a semantic distinction or, depending on your viewpoint, an utter disregard for artistic and aesthetic merit.

But as more “traditional” artists attempt to cash in on the $1 billion boom (or bubble), and prices rise to stratospheric levels, determining and justifying these artists’ prices has become an increasingly pressing issue. Should all works associated with an NFT command a premium? Or should it be the reverse?

“You have to start with the artwork and use the underlying technology as a tool,” says Dekking. “Not the other way around.”

Unlike at most fine art auctions, the Baranoff-Rossiné painting doesn’t come with an estimate, just a starting bid of 6.5 ETH, which—as of 4:45 p.m. East Coast time on Tuesday—was worth about $11,050.

“The estimate is hard, because there’s no estimates for any NFTs,” says Burks. “That’s just not how NFTs work.”

But it is how art auctions work. Estimates serve, generally speaking, as some form of price guidance: Even if the range isn’t exact (and, given that auction houses regularly suppress valuations to entice bidders, they rarely are) estimates give a decent sense of what comparable objects have sold for in the past.

Buyers on Mintable’s site have no such guidance, aside from a line about the auction result from 2008, “the 23rd most expensive painting ever sold at auction by a Russian painter,” though the fine print in the site they link to, artinvestment.ru, notes that its own information is incorrect. If it actually listed the top-selling works by Russians, Mark Rothko would sweep the entire list; instead, the ranking is reduced to “one artist—one picture,” the site reads.

The younger Baranoff-Rossiné emphasizes that the auction house’s price structure is out the family’s hands and, in a subsequent email, points out that the Mintable page links to his family’s website, which in turn has multiple links to the Artnet database.

“We’re very transparent about the whole collection, and we’ve made sure all the important information is available to anyone,” he says.

Burks says it is “unlikely” that “someone is just buying this for the painting itself and not the NFT.”

Given that they have to pay in crypto-currency, he explains, “it’s most likely not going to be a traditional art collector, and they’re going to be a crypto-native user. But there’s still due diligence when you do anything, whether it’s buying shoes on Amazon or a $70 million artwork by Beeple.”

Finding Value

The digital images tied to NFTs present a separate valuation question. Generally speaking, NFTs act as a certificate of authenticity, thereby creating an “original” digital artwork worth more than other identical copies circulating online. It’s why a screenshot of a tweet can sell for $2.9 million.

But what happens when those certificates of authenticity are for copies of the artwork, rather than the original?

Baranoff-Rossiné suggests people approach these digital images as limited-edition postcards or posters, just as they buy limited-edition prints or photographs. “It’s like printing a one-off series of 100 postcards,” he says. “It’s exactly the same principle.”

The digital NFTs aren’t priced like postcards, though. The starting bid is currently set at 1.32 ETH, or about $2,238 per image, “a purely random number,” Burks says. “We don’t want to cut off people who say it’s already above [their] budget, but we also don’t want to start too low.”

And while the $69 million Beeple artwork started far lower, at just $100, Burks says, “I think Christie’s made a big mistake starting it at $100. That’s what high-value net worth people think about it—they value something based on the starting price.”

Crypto Windfalls Are In The Tokens Driving The Digital Art Boon

While digital art is having a moment after Beeple’s shocking $69 million sale of a NFT-backed piece earlier this month, copycats hoping to cash in might want to focus on the tokens themselves instead of the collectibles.

Since “Everydays: the First 5,000 Days” set its sales record, the prices of dozens of non-fungible tokens that track ownership and sales prices of digital art have surged — boosting the market almost 10-fold to $20 billion, according to crypto data tracker CoinMarketCap.com. That dwarfs even Bitcoin’s meteoric rise in the past few months.

The surge is happening even as observers question whether NFTs, which also are used to control the number of copies in existence through unique identifiers, are the inevitable evolution of the collectibles market or the latest leg in a growing speculative bubble. Several apps and websites are now even also offering NFT-backed loans.

“NFTs are a useful idea that will survive, but the current trading mania and extensions like lending will likely fade soon,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion.

That’s not a scenario that coin investors are betting on. Theta Token, used to validate transactions on the namesake corresponding network, has quadrupled this year to reach a market value of $10 billion. The project, focused on peer-to-peer video streaming, plans to let entertainment companies issue NFTs, such as “a piece of all-time classic characters or moments from their favorite shows and movies or a part of an upcoming blockbuster,” according to the project.

Chiliz, a token to buy fan tokens that in turn can be used for voting in polls of sports clubs like FC Barcelona, has seen its value rise 23-fold year-to-date to $3 billion. It recently announced plans to launch NFTs with professional sports teams, so users can buy these items with Chiliz coins.

Then there are also tokens that offer a path to owning of NFTs: Whale, which is backed by a wallet containing thousands of NFTs, lets users “rent” NFTs from the collection, and to purchase exclusive digital swag or even NFTs from the pool. That coin has doubled since mid-February, a boon for its creator and biggest holder, who goes by WhaleShark.

“People are looking for exposure to NFTs and investing in platform, specific use NFT tokens as well as asset based tokens is a way to get into the space without having to hold specific NFTs,” WhaleShark said.

The problem is, coins like Whale are highly illiquid. Its 24-hour-trading volume is about $1 million, despite a $214 million market value.

Lenders are also beginning to issue NFT-backed loans, which essentially let owners use their NFTs as collateral. Stani Kulechov, chief executive of liquidity software provider Aave, expects that market will reach $50 billion by year-end. Project NFTfi, around since last summer, has shepherded around $1.8 million in loans, with collateral such as virtual cats from CryptoKitties and parcels of land in the virtual world of Decentraland.

“NFT collateralized loans bring additional liquidity to the notoriously illiquid NFT markets,” said Stephen Young, chief executive officer of NFTfi. “Our users have done everything from covering margin calls to paying the rent while going through some tough financial times.”

Still, he noted, default rates range from 10% to 30% — but then, lenders aren’t complaining with demand surging.

Updated: 3-26-2021

SEC’s ‘Crypto Mom’ Warns Selling Fractionalized NFTs Could Break The Law

Fractionalized NFTs and baskets of non-fungible tokens could easily be considered investment contracts under U.S. securities law, warns SEC Commissioner, Hester Peirce.

Speaking at Draper Goren Holm’s Security Token Summit on March 25, SEC commissioner Hester Peirce, also known as “Crypto Mom” warned the issuers of fractionalized non-fungible tokens and NFT index baskets that they could inadvertently be distributing investment products.

While Peirce stated that “the whole concept of an NFT is supposed to be non-fungible” — meaning that “in general, it’s less likely to be a security” — she noted that “people are being very creative in the type of NFTs they are putting out there.”

Peirce urged NFT issuers to be cautious if they decide to “sell fractional interests” in NFTs or NFT baskets, stating:

“You better be careful that you’re not creating something that’s an investment product — that is a security.”

With NFTs fetching increasingly exorbitant prices, fractionalized interests in these assets enable smaller investors to still be able to gain exposure to a small share of a high-priced NFT. Earlier this month, Cointelegraph reported on two emerging teams offering novel solutions for fractionalizing non-fungible tokens.

Peirce also criticized the use of the Howey Test to assess whether crypto assets are securities, asserting it “hasn’t worked that well” for the industry.

The Howey Test is frequently used by courts to determine whether an asset is a security, with the test being derived from a landmark 1946 court case concerning real estate contracts issued by the owner of a citrus grove to fund the business’ expansion.

Peirce said that if the test was used in the 1946 case in the same way it is applied to crypto, the courts would have been seeking to determine whether the fruit trees were securities, rather the investment contracts relating to the plants.

Peirce noted she hopes to collaborate with incoming SEC chairman Gary Gensler on developing her “safe harbor plan,” which would reduce regulatory scrutiny of emerging blockchain networks.

The safe harbor plan would allow new token issuers a three-year window in which to build a robust and decentralized network and demonstrate securities laws do not apply. The plan would also require that issuers provide detailed plans regarding the network’s roadmap, token sale, and the individuals and investors behind the project.

You have three years to develop the network so that the token is actually usable or the network is decentralized — and at that point, it’s clear the securities laws don’t apply. And everything that you say will be covered by the anti-fraud laws under the securities laws.”

 

Sophia The AI Robot Sells $1M In NFT Sales

Sophia the Robot has generated more than $1 million in NFT sales.

If creative self-doubt and competition between humans in the art world weren’t already hard enough, artists now face the prospect of battling it out on Nifty Gateway with artistic robots.

Sophia, the world-famous humanoid robot developed by Hong Kong-based Hanson Robotics, has generated more than $1 million in sales from her debut NFT drop on Nifty Gateway.

The “Andrea Bonaceto and Sophia the Robot drop” was launched in collaboration with contemporary artist Andrea Bonaceto. The drop included tokenized portrait GIFs that morphed from artist Andre Bonaceto’s paintings into Sophia’s artworks. The portraits depicted figures involved in her development such as Hanson Robotics founder David Hanson and the AI researcher Ben Goertzel, along with self-portraits of Sophia.

The drop consisted of four open editions of 30 copies, for around $2500 to 3000 apiece, and a one-of-one self-portrait which was auctioned for more than $680,000 on March 25.

After the auction, winning bidder and digital artist “888” tweeted “I have goosebumps,” with Sophia responding “Me too, we really had a connection. Your work was very inspiring on so many levels, so I want to hold on to its meaning a little longer. Will share soon.”

Bhad Bhabie’s ‘Cash Me Outside’ Meme

Rapper Bhab Bhabie, famous for her antics on the Dr. Phi show, which turned into the viral internet meme “cash me outside”, appears to have realized the artistic significance of non-fungible tokens.

Bhabie is set to release “ETH ME Outside”, a week-long NFT drop across NFT platforms, OpenSea, Rarible, and Zora, starting from today.

The NFT drop will consist of a collection of digital meme iconography surrounding her world-famous “cash me outside” catchphrase, with part of the proceeds going to the non-profit Breaking the Code of Silence, an organization focused on raising awareness for the “troubled teen industry”

Your NFT Tax Questions, Answered

If you’ve created or bought and sold a non-fungible token (NFT) for a profit over the last 12 months, chances are you probably owe tax to Uncle Sam.

The U.S Internal Revenue Service recently announced it has extended the deadline for individuals filing and paying tax returns from April 15 to May 17, so you now have more time to prepare.

NFTs continue to be the dominant crypto trend of 2021, with 5.5 million sales to date and overall trade volumes totaling more than half a billion dollars. These popular, one-of-a-kind digital assets have drawn worldwide attention, including from major brands like the National Basketball Association (NBA) and the Ultimate Fighting Championship (UFC) as well as celebrities including William Shatner and Tony Hawk.
Taxable NFT activities

Despite their unique and indivisible nature, all digital assets, including non-fungible tokens, are regarded as “property” for tax purposes per IRS Notice 2014-21. This means that capital gains and losses need to be recorded for the following taxable activities:

* Purchasing an NFT using a fungible crypto asset such as binance coin, ether or flow.
* Selling an NFT for another NFT.
* Selling an NFT for a fungible crypto asset.

Gains and losses are calculated based on the difference between the price paid for the NFT and the price it was sold at. If you used a fungible crypto token to purchase an NFT, you will also need to record the difference between the purchase price of the tokens and the price at disposal.

Example: Jane sees a digital artwork NFT for sale on the Ethereum-based OpenSea platform for two ether (approximately $3,300 at press time) and decides to buy it. Five months later, the artist who created the NFT Jane bought is now trending on social media and there is suddenly huge demand for the artist’s work. Jane decides to capitalize on this and lists her NFT for sale for five ether – which is worth $10,000 at the time. Within minutes, someone buys it from her.

Here’s What Jane Now Needs To Calculate For Her Tax Returns:

The fiat price difference between what she originally purchased her two ether for and the price at which she exchanged the two ether to purchase the NFT. Let’s say Jane purchased her two ether for $450 each over a year ago.

The current price of Jane’s 2 ether = $3,300. The original price she purchased them both for = $900.

$3,300-$900 = $2,400.

Secondly, Jane needs to calculate the fiat difference between the purchase and sale price of the NFT.

Jane initially bought the NFT for $3,300. Jane then sold it on for $10,000.

$10,000 – $3,300 = $6,700

Total gain = $9,100

Long- And Short-Term Capital Gains

Because Jane held the ether for over a year, the $2,400 gain would be treated as a long-term capital gain and would incur a lower tax rate of 0%, 15% or 20% depending on her annual or combined marital income. Check out our full U.S. crypto guide here for more information.

The profit Jane made from her NFT sale, however, would be treated as a short-term capital gain as she held the asset less than one year. This means the capital gain will be taxed at the same rate as her income tax bracket. An updated list of U.S. income tax brackets can be found here.

All capital gains and losses need to be recorded on Form 8949 and added to the Schedule D form.

Tip: When calculating capital gains, you can offset the amount of tax you owe by deducting any transaction or gas fees incurred from listing, selling, creating or purchasing the NFT.

It’s worth noting the IRS has a separate tax bracket for collectibles under Code 408(m) that could extend to certain NFTs. This carries a much higher 28% capital gain tax for collectibles held over one year so it is advisable to seek professional assistance from a tax advisor when filing NFT taxes.

Updated: 3-29-2021

NFTs Come To Saturday Night Live In Rap Sketch

“Everyone’s making so much money — can you please explain what’s an NFT?” asked Pete Davidson’s Eminem.


The craze behind non-fungible tokens, or NFTs, has seemingly reached peak parody after NBC’s famed Saturday Night Live sketch comedy featured it in a skit with United States Treasury Secretary “Janet Yellen.”

In last night’s show hosted by former cast member Maya Rudolph, Yellen — portrayed by comedian Kate McKinnon — is speaking at a university economics class when a student asks her to address exactly what are non-fungible tokens through the medium of rap.

“What the hell’s an NFT? Apparently cryptocurrency. Everyone’s making so much money — can you please explain what’s an NFT?”

The sketch features an absurd list of some real and invented NFTs in the crypto space, including images of U.S. Supreme Court Justice Chuck E. Cheese and Family Guy character Peter Griffin dunking a basketball.

The cast of characters mainly consists of Peter Davidson as the student portraying rapper Eminem dressed as Batman’s sidekick Robin, Chris Redd’s Morpheus from The Matrix franchise, and a hapless “man with a mop” — played by musical guest Jack Harlow — who provides the most succinct explanation of the tokens.

“Non-fungible means that it’s unique,” he rapped. “There can only be one like you and me. NFTs are insane, built on a blockchain. A digital ledger of transactions, it records information on what’s happening. Once it’s minted, you can sell it as art.”

Highlighting the sudden surge in the number of unusual artwork, animation, and other images in digital marketplaces, the comedy rap sketch may cause some in the crypto space to recall Elon Musk’s musical NFT offering this month.

The billionaire and Tesla CEO posted a video clip playing a song which featured a pair of diamond hands underneath the moon with Shiba Inu dogs circling. Musk later said he didn’t “feel quite right selling” it as an NFT.

In the final seconds of the Saturday Night Live sketch, the three characters as well as “Yellen” are cut out of the still frame and pasted into a background of the Abbey Road crossing from the Beatles’ album, revealing an NFT selling for 420 Ether (ETH) — roughly $718,000 at the time.

Updated: 4-4-2021

‘Silent Crash’ As Price Floors Collapse Across NFT Space

Prices are plummeting, and some holders might not even know it.

If prices plummet in an illiquid market, how soon before anyone notices?

While fungible tokens traded on centralized and decentralized exchanges have significant transparency regarding price movements, nonfungible tokens can be harder to track. Because of their illiquid nature, gauging the sentiment of the overall market market for a project can be difficult — a dynamic that has led one eGirl Capital member, Mewny, to dub NFT corrections ‘silent crashes.’

In a silent crash, speculators might not even be aware that one is underway — buyers simply evaporate and sellers fail to move their wares. However, metrics such as “floor price” — the lowest price at which a NFT can be bought for a particular project — as well as total volume can indicate that a bull is turning into a bear.

There could be bad news on the horizon for NFT collectors, too, as signs are pointing to a nasty crash underway.

CryptoPunks, among the earliest and most popular NFT projects for collectors, have seen a over 40% decrease in floor price to 14 ETH (roughly $28,000 at the time of publication). The price capitulation has led to some on-chain horror stories today, such as one speculator who sold a Punk for 16 ETH after purchasing it for 25.5, and another that sold for 27.99 after a 42 ETH purchase:

CryptoPunks aren’t the only high-profile project experiencing a marketwide correction, either. Data from evaluate.market shows that sales volume in multiple price categories for NBA Top Shot have declined precipitously since a Feb. 22 peak.

One semi-anon and self-described Top Shot enthusiast, Jordan, who charted the downturn points to two specific populations for the steep fall.

“The market has been trending downward since the Feb 22. It seems like there are two types of sellers. One, the investor who got in early and wants to cash out with exponential profit. Two, the investor who bought at or near the top and can’t stomach to watch their investment lose value by the day,” he said.

Watching price floors plummet is difficult regardless of the project. According to market-tracking website Nonfungible, the pullback is effecting the entire market: total number of sales, total value of sales, and active wallets are all down on a 7-day and 30-day basis.

Jordan ultimately thinks this a healthy, short-term pullback, however.

“I think it’s a healthy, relatively short-term correction. The rate at which prices rose from Jan 1 to Feb 22 was unsustainable. I think the next few months will continue to be bumpy, but I’m very bullish overall.”

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