A single grey pixel sold for $1.36 million at a Sotheby’s auction this month. The sale was within what many would consider the realms of the absurd, but more broadly it spoke of the mainstream acceptance of non-fungible tokens (NFTs), both as an art form, and a unique digital asset.
Google NFT searches blew up in March, attributed to a combination of factors, not least of which was the number of high profile figures who announced they would be taking part in the non-fungible token boom. And with the likes of Grimes reaching 7 figures in her NFT sales, the cultural shift in music and technology has pushed the boundaries of what anyone could have expected.
While traditional auction houses may carry prestige in the traditional art world, there is a plethora of unique artworks and tokens to be found in blockchain marketplaces. These tend to be more frequented by everyday buyers, who likely already follow or support a particular artist off the marketplace.
New York based singer, Doja Cat, recently revealed in a press release that she had created her own NFT marketplace, Juicy Drops. With an array of existing marketplaces to choose from the singer maintains that she launched her NFT company to maintain greater control of her art:
“I want to be able to make all decisions related to my creative vision and help other artists do the same. My ownership also allows me to direct how we can give back to causes that I truly believe in.”
Doja Cat has created her own marketplace Juicy Drops, in a bid to create a space in which she feels truly represented and in control. But NFTs in themselves protect artists, don’t they?
Yes, to an extent.
If you are in the privileged position of having access to traditional art platforms, mediators and commission fees typically take a significant portion of the final sale price. NFTs sold on blockchain marketplaces remove the mediators and middlemen from the equation. However, a number of issues are emerging, including over-saturation of existing marketplace and increasingly, environmental concerns.
Given NFTs use the same blockchain technology as some popular cryptocurrencies, they also use a pretty significant amount of energy. Ethereum is the most popular public blockchain for NFTs, but is also one of the highest in terms of energy consumption. Opensea, SuperRare, and Rarible all use the Ethereum network for their marketplaces, and any sale made on their platform is also accompanied by gas fees and transaction fees.
New platforms are emerging to further drive forward the evolution of NFTs. As the non-fungible token community evolves, greater accountability is expected from platforms that host NFTs. A number of factors differentiate marketplaces, with issues such as energy consumption, low artist royalties, and transaction fees, heading the list of challenges that may put people off from purchasing or selling on these platforms.
The application of blockchain solutions to social networks will encourage greater connectivity between individuals, as well as provide novel ways for artists and their fans to interact. UTU.ONE is a new social network platform that plans to change the way social platforms and NFTs work. UTU operates on the EOISO Blockchain - the fastest platform for minting and mining NFTS, and a cleaner alternative to Ethereum. It also boasts no gas or transaction service fees and provides its creators with a ten percent royalty for each sale.
Based on the idea that social networks should never compromise on security, UTU enables verified users to search, find and join influencers, celebrities, and companies that are issuing NFTs through their own tokenized community. The social platform currently boasts a number of celebrities, including singer Zhavia Ward, producer Murda Beatz, and Mexican footballer Norma Palafox. UTU is currently in its beta test phase but plans to launch July of this year.
Advocates of NFTs may point to the fact that they have fueled a digital art boom, but some critics have compared the last few months of frenzied auctions to somewhat of a gold rush.
Ultimate sustainability requires platforms to foster a sense of community among their users, something that UTU hopes to achieve. The UTU model provides the community of fans with a proportion of the sales profit from each NFT, improving the interaction between content creators and their fans, and ultimately forming a long-lasting sustainable community.
Vytautas Zabulis, CEO of digital asset infrastructure firm H-Finance, recently commented on the expected evolution of the NFT market:
“Yes, the NFT bubble will eventually pop, but the broader impact it'll make will remain"Just like any new technology, which is changing the way we live right now or in the future-similarly what we've seen with other digital assets like Bitcoin-as the initial hype evaporates, the prices level out and wider adoption begins, though the process can be lengthy."
The number of blockchain marketplaces is expanding, but a few of them sit comfortably at the top, favoured by celebrities and ‘civilians’ alike. The previously mentioned marketplaces cater to artists, athletes, and even entire sports leagues. However, not all marketplaces are created equally. The principle that NFTs provide their creators with greater control over their work may be absolutely true, but some provide them with a little more bang for their buck.
Looking forward, NFTs will have to evolve if they are to continue to make the same impact that they have over the past few months. Platforms that support the sale of NFTs will need to find innovative ways to draw in community support that will sustain this new technology long term. In the meanwhile, the tide of NFT adoption continues to rise high.