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Like most artists who have directly experienced the ups and downs of the nascent digital art market, Sara Ludy has spent the past several weeks exploring the crypto space’s potential for her art.
Even though she has yet to create an NFT-based artwork — which stands for non-fungible token, a unique, tokenized artwork that can be traded in cryptocurrency — the New Mexico-based artist wanted to set the terms for her art’s crypto futures.
While Ludy, whose work is predominantly concerned with digital materiality, has sold physical artworks, she has only sold one digital work in all of her eight years with her New York gallery bitforms. With crypto-sales just now breaking ground in the mainstream, she decided to set her own non-negotiable terms for future NFT artwork sales: 50% for herself, 15% to the crypto marketplace/platform she chooses to sell with, and then 35% to bitforms. That 35%, however, wouldn’t solely go to her gallerist, Steven Sacks: she wanted it equally divided between Sacks and gallery staff, at 7% each.
“I think it is a moment where artists can have agency for the sale of their work,” explains Ludy regarding her decision, which she made public via her Twitter last month. “We really need to find ways to redistribute funds to art workers and to the community. There’s no reason to have the same small group of digital artists who had success. It’s there for everyone.”
For those unfamiliar, blockchain is a form of financial technology that acts as a permanent ledger distributed across multiple computers rather than just one. It’s basically a distributed database — a living, breathing spreadsheet operating in real-time — that audits itself. Since every transaction is automatically notarized, the middleman is removed.
While the blockchain has been around since the great recession, there has been a resurgent interest during the COVID-19 pandemic. Amid lasting lockdowns, some people have more time, money, and inclination toward GameStop-like financial speculation, with tech players like Elon Musk now entering the fold. The renewed frenzy is also owed in part to the mania for NFTs. Several years ago, the art world was taken by blockchain’s authentication promise; art-tech start-ups like Monegraph and Ascribe primarily focused on digital rights management. But this fixation was limited to a small sphere of digital artists, gallerists, and technologists working in tech hubs like New York and Berlin who failed to effectively outreach beyond these closed art-tech circles. Further, the volatility of cryptocurrencies like Bitcoin and Ethereum didn’t — and still don’t — necessarily make it an asset class drawing those with more traditional investment portfolios.
Setting aside the pomp and circumstance surrounding Christie’s ongoing, first-ever sale of an NFT artwork, NFTs have managed to capture the collective imagination because they convincingly present an identifiable carrier of value for so-called digital assets. Furthermore, NFTs allow digital artists and creators to embed conditions of their work and practice into its expression, determining how it’s displayed and even editioned.
If the biggest appeal of NFTs is the ability to allow an artist like Sara Ludy to broker their own “smart contracts” — self-executing business automation programs running on the blockchain — pre-determined ownership conditions can be programmed into its very metadata. It’s a new model of interdependence for digital creators, in which the attention economics set by monopolizing big tech structures can be flipped into dynamic monetizable forms or enable fractional ownership.
For longtime blockchain researchers like Amy Whitaker, Ludy’s important intervention carries weight, spurring greater engagement with decentralized concepts and forms. In February, Whitaker and Roman Kräussl co-authored an art world proposition for blockchain’s equity ownership in the peer-reviewed journal Management Science.
Modeling a scenario where artists Jasper Johns and Robert Rauschenberg retained 10% equity on their art when first sold, Whitaker and Kräussl determined a supposed portfolio return based on the primary financial records of the abstract expressionists’ gallerist, Leo Castelli. The researchers then expanded into the financial records of two other galleries, Betty Parsons Gallery and the Green Gallery, for a larger, more representational sample. In positioning this data alongside secondary auction sales data, the authors came to a startling conclusion: if Johns and Rauschenberg retained their 10% equity at first sale, they would likely earn a 20-40% return on sales from the mid-1960s to mid-2000s, outperforming the market and earning up to 1,000 times over.
“What’s beautiful about equity is that you’re designating a fraction as opposed to a dollar amount. That fraction can move. So if you own 10% of an artwork, and you sold it for a hundred dollars or a million dollars, you’re going to own something proportionately. And that, to me, makes it such a powerful tool,” says Whitaker.
She believes Ludy’s public action signals a more equitable art world economic model made possible by the blockchain. Artists and creators can be compensated for early-stage creative work. And if you’re a bitforms gallery worker, in Whitaker’s view, this NFT artwork percentage stake enables your arts administrative labor to be recognized as a form of investment, giving “exposure to the value that your work helps to create by owning equity.”
“I think these are very big ideas around what it is to go from the centralized platform economy of Facebook and Google to a distributed, co-operative economy where we all have a sense of ownership of that work,” says Whitaker. “But that ownership is not a neoliberal limitation but a form of engagement. That once we own something, we can give it away. Once we own something, we can band together with other people and own things together.”
Of course, there are still challenges within the crypto space. Ludy, for instance, hasn’t yet determined whether she’ll actually produce an NFT artwork due to the massive carbon footprint associated with crypto mining. (A recently self-published GitHub paper, featuring contributions by artists Addie Wagenknecht and Mat Dryhurst, maps out eco-friendly crypto art solutions, advocating for “more ecologically friendly and transparent platforms.”)
Additionally, with marketplaces rapidly popping up within the past couple of years, it’s difficult for digital artists and creators to find the best platform. Worst, scaling issues have inflated the network transaction fees associated with “minting” — creating and registering on the blockchain — an NFT artwork. Moveover, while artists and musicians can grasp their crypto stake, it’s less tangible for creators like writers and curators to understand how they can benefit.
Indeed, curation, especially within the crypto space, is still somewhat nebulous. Despite curated digital art marketplaces like SuperRare and Nifty Gateway, artists and creators are still held responsible to “self-curate” their works. Some platforms promote themselves as creator-centric. Zora, which first gained traction amongst hype beasts and musicians utilizing NFTs to capture the resale value of limited-edition goods, has a protocol where they don’t take a transaction fee on each sale like other platforms. Foundation, one of the more art world-friendly platforms to launch last year, has been effective in organically scaling its invite-only community model.
Meanwhile, the Net Art platform and artist collective Felt Zine demonstrates a certain curatorial crypto art impulse centering community-building and knowledge sharing. The Black led-collective recently curated a series of NFT collections powered by Zora and also organized an open Clubhouse conversation on the subject.
Thanks to the explosion of knowledge-sharing happening on the invite-only audio app, it’s engaging a wider tech-savvy audience; specifically, historically marginalized communities drawn to its wealth redistribution possibilities. Lady PheOnix, founder and host of Crypto Basel, has been responsible for organizing some of the most accessible and engaging Clubhouse salons I’ve listened to on the subject. She amassed 14,100 followers by bringing together a wide range of guests like the artist Beeple (the artist behind Christie’s ongoing auction) and the funk legend Bootsy Collins. Last week, Lady PheOnix convened Crypto Fashion Week, attesting to the varied creative fields the blockchain intersects. Meanwhile, Black Bitcoin Billionaires, one of the largest Clubhouse Bitcoin groups, has 42,400 followers thanks to its weekly conversations focused on how “Bitcoin and Blockchain technologies can bring freedom and empower the people.”
Mark Sabb, Felt Zine’s founder and co-creative director, acknowledges the app’s invite-only status is still a barrier, but believes it’s been “useful” in closing the knowledge gap.
According to Dev Moore, co-creative director of Felt Zine, NFTs’ monetization of online attention economics challenges the art world’s scarcity model. “I feel like these traditional institutions and galleries are very focused on allowing only a certain group of people to view, access or have the rights to purchase these works,” he observes. Recently the author of a survey on Black crypto artists and influencers, he highlights how community-owned initiatives like the Mint Fund are helping underrepresented communities in minting their first NFTs. “At least with the type of art being released now, labeled as NFT, it’s the opposite. The more a piece is seen, the more value is presented towards itself.”
He believes, especially with the recent $600,000 NFT sale of the Nyan Cat meme, that past digital works and memes will eventually see a valuation and attract a new audience.
“It’s not just the traditional art collector or the tech-savvy art collector. Now anyone can be a collector, and on top of that, people are able to collect monuments and moments of digital culture. People are able to value things in a different way.”