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January 30, 2022

Where Next for NFTs?

As Right Click Save celebrates its first birthday, Jason Bailey and Danielle King make their predictions for the year ahead
Credit: Yomi Dinero, The Toll Plaza, 2022. Courtesy of the artist
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Where Next for NFTs?
This conversation is also available as a podcast.

Alex Estorick: You’ve both been heavily involved with the NFT community over the past year, so I’d like to start with some reflections. If 2021 was the year of the NFT explosion, what was 2022 the year of? 

Danielle King: I feel like 2022 was the year of the de-hyping of NFTs. With the crypto winter and market retraction, I think a lot of the looky-loos who were attracted to NFTs as a speculative vehicle left. But what was left behind was a group of people who were really here for the art and for the community. Those people are still collecting and building. So I think a lot of the hype died down. And in some ways that was a good thing. Jason, what do you think?

Jason Bailey: I tend to agree. I do think we saw some growth in 2022 in the areas that I care about. I think all the speculators left, but there remains a residual distrust or anxiety from the traditional art world toward NFTs. At the same time, the number of people with backgrounds in art and art history grew in 2022, while the number of people collecting on platforms like fxhash went up. So yes we lost the speculators, but I think most of us thought the space had grown too fast in 2021 anyway. In 2022, the number of people in it for the long term increased.

Shaga O'Nhan, Boundless Realm of Possibilities #28, 2023. Courtesy of the artist

DK: Not to toot our own horn, but I do think that RCS and other similar publications, along with their writers, have raised the level of discourse in the past year, which helps to translate things for a lay audience. It has also brought different voices and perspectives into the mix, which has been a huge boost to the space.

JB: One of the things that I said in 2021, when things took off with the Beeple sale, was that a cash grab really wasn’t what a lot of the early altruistic founders of the crypto art movement were looking for. On the other hand, people would never have known about it otherwise. So while the explosive growth of 2021 — which played out on Saturday Night Live and Ellen — was painful, it also put NFTs out there for the world to see. In 2022, maybe the relevance of NFTs died down a little. 

As art people, it can feel comforting that all the speculators left. But part of me thinks, if we really are trying to build a new art world, it has to have massive growth and appeal beyond the art world. 

On one side, it’s cool that the number of people who grew up caring about art is going up, while these other people who are like degens, who were just there for the money, have gone away. But that is not a formula for growing a new art world that is relevant to more people — it still needs to find a way to not feel elite.

Shaga O'Nahn, Quantum cable management #44, 2022. Courtesy of the artist

DK: I do think that we have seen mainstream interest in NFTs with the likes of Starbucks and Manchester United entering Web3 in 2022. I think that a lot of people will collect their collectibles and in the process get more immersed in the digital art world. And I think that’s great. I don’t think we want this world to be as gated as the traditional art world, so having more accessible entry points is a good thing in the end.

JB: Yeah. I kind of operate on the basis that some of the old art world practices need to be revised. The real threat is that we are recreating the old system. We’re seeing an increasing number of contracts and exclusivity agreements between artists and the new version of gallerists that is starting to look a little bit like the old art world. 

AE: The Merge was a rare instance of a digital ecosystem under capitalism iterating in a more environmentally-friendly direction. That was the moment last year when I felt that Web3 might engineer different outcomes to Web2. What is your perspective? 

DK: I agree and the fact that the community demanded it and got behind it is huge. I didn’t have an ETH wallet prior to The Merge but I have one now, even if I still do minimal collecting over there for financial reasons. 

I think that a lot of artists who were releasing projects solely on Tezos have now dipped their toes into Ethereum.
Natasha Wong, FUSIO II, 2022. Courtesy of the artist

JB: The Merge was a miraculous technical accomplishment given the level of orchestration that was required to pull it off. It’s also a reminder that, despite the volatility of cryptocurrency, the community of engineers is able to come together to pull off something remarkable. They are fundamental to the future of decentralized digital currencies. 

In 2017-18, when I bought XCOPY’s first NFT for $1, I collected almost exclusively on Ethereum. I then started collecting almost entirely on Tezos for a year, which has changed the way I collect. On Tezos, I buy works maybe five or six times a week that are in the $5 to $15 range. That’s what makes me happy — buying more frequently and connecting with new artists, which is the enjoyable part. If I were Tezos, I would focus less on the environmental advantage now, which was really what they hung their hat on pre-Merge, and I would focus much more on a healthy form of collecting that’s affordable, repeatable, and connects collectors to lots of artists. I worry sometimes that their goals are to associate themselves more with museums and the traditional art world. 

I would like to see Tezos embrace this idea of an affordable ecosystem where anyone can collect, because the more collectors we have, the more artists we can support. I think they’re uniquely positioned to do that.
Ateliê 407, Neo Dots #6, 2022. Courtesy of the artist

AE: Danielle, you recently started working as an AI artist yourself in addition to your collecting. Can you speak about the new form of creative entrepreneur that has emerged in Web3 who is simultaneously artist, collector, and co-creator?

DK: Coming from the traditional art world, my mindset was always: “you are either an artist or a curator,” but in Web3 it’s super blurry, which I think is a great thing. I started out as a collector and as I was building relationships with artists and other collectors, I began thinking about how I hadn’t made art in a long time despite studying art and art history. 

Being in Web3 felt like it gave me permission to restart my creative practice because I saw other people doing it and said to myself: “well why can’t I?” 

AI is a very accessible technology which means you don’t need experience as a coder to be able to use it. I thought I’d give it a shot and I’ve really enjoyed the experience. I was coming up with work that I felt said something and that I was proud of, so I thought I’d mint it and see what happened. There are many other people who maybe didn’t feel that they could be an artist but now feel like they can try. Does it create a proliferation of images? Yes. But that’s where, as a collector or curator, you need to have the eye to pick out what you think stands above the rest — artists whom you feel have a vision or tell a story or make you feel something. I think AI has unlocked a huge amount of potential and creativity in the past year. I’m currently working with Emergent Properties on a generative AI project that I’m really excited about. 

Ertugrul Incel, Battal Ebru / Marbling Art DE #7, 2022. Courtesy of the artist

AE: Over the past year, it feels like the NFT has done for blockchain poetry what it had been doing for digital art for a while. Jason, are you still positive about the NFT’s ability to generate careers for people who previously couldn’t make money from their digital creativity? 

JB: I think a lot of people might be thinking: “I used to have to do poetry homework, and it’s all fancy words which I don’t really understand. But I collect NFTs, so maybe poetry can be a thing for me, too.” 

For a younger, tech-savvy audience, NFTs + x may be a more fun cultural experience. 

Being able to understand poetry on your own terms, through your screen, gives you enough distance to be able to understand things comfortably. The NFT socializes that experience while, of course, increasing the tradability of work that maybe once felt a little exclusive or out of reach. While I want to be sensitive to those of an older generation for whom poetry comes in books, I think the novelty of blockchain poetry has opened up a new audience and made poetry feel less intimidating and more inclusive. 

The key questions for me are: “will these new markets survive and flourish over time? And will they expand to include new photographers and new poets? Or will the early adopters be the only beneficiaries?” There remain areas of culture that are still to see that nice little NFT bounce.

Ertugrul Incel, Battal Ebrû / Marbling Art DE #2, 2022. Courtesy of the artist

AE: I know that each of us is trying to support a more inclusive, horizontal, and affordable art world. But are we more inclusive in 2023 than we were in 2022? 

DK: There is still much work to be done, particularly on the inclusive front. As a female collector, I still feel part of the minority in this space. That said, I haven’t had any bad experiences and I’ve encountered communities that have been very supportive. There is an incredible, founding core group of women in this crypto art space, and the fact that we can have friends all over the world, which is a thing that was hard to do in the traditional art world, is fantastic. We need to keep making sure that exhibitions, conversations, and panels are inclusive. I think our FEMGEN event in Miami, hosted with VerticalCrypto Art, was amazing because we had the opportunity to hear all those female artists conversing with each other while seeing their work exhibited so beautifully. More of that is needed. 

I think a lot about how we onboard more women into this space, especially more female collectors. There remains a huge disparity between what male artists can charge for their work and what female artists seem to be able to charge. Having more female collectors would help to even it out a bit. 

JB: I’m obviously a white male, so I need to be thoughtful before I share my thoughts on these things. From my experience, the last five years has been a pathway toward greater inclusivity and the range of my relationships has only grown over that time. This is not a monolithic space and there is an extraordinary array of communities to engage with around the world. But we can do better and projects like Unsigned (2022) by Operator and Anika Meier reinforce that imperative.

Gin, Chrono 彩雲-saiun- #06, 2022. Courtesy of the artist

AE: What does the NFT community need to do to survive and thrive in 2023? 

JB: Artists are telling me that, right now, they can be a little bit more thoughtful in their creative practice without the pressure to take advantage of a short window to make enough money to support themselves for the inevitable down periods. Art thrives in a calm, thoughtful space. 

Will there be less money for a while? I think so. I think we’re going to be in a down crypto cycle and a down NFT cycle for the next year or maybe two years. But I do think it’s a prime time to be thoughtful, build community bonds, and explore our own art-making capabilities. 

DK: I would second all of that. I’m trying to collect things while prices are lower, when people aren’t in this manic collecting and flipping phase. I see a lot more thoughtful conversation on Discord and in Twitter DM groups with artists and collectors. Because the pace has died down a bit, people are reflecting on their collections in a deeper way. I think that everyone who loves the art is going to keep collecting, which is one of the silver linings of a bear market.

Gin, Chrono 彩雲-saiun- #03, 2022. Courtesy of the artist

AE: I want to draw attention to a charity auction that took place recently at Bonhams called Cure³, where seven generative artists made well over $200,000 in one night for Cure Parkinson’s. What made it an interesting model of charitable giving was the combination of long-form generative art with resale royalties on both primary and secondary sales. This means that the charity can benefit from sales of the NFTs on an ongoing basis. At a time when royalties are under threat, this auction reinforced their long-term potential within the new creator economy. My worry is, the longer the current crypto winter goes on, the greater the threat to royalties as a core component of this ecosystem.

DK: Having spent so much time in the traditional art world, it always really bothered me that, as an artist’s star rose, their prior work would be resold at auction for huge amounts of money without the artist receiving anything. The fact that things are different in the crypto art world is really special. 

It gives me joy to know that, if I do sell a work that I’ve previously collected, the artist will benefit. 

Not only is the Web3 model of fundraising more transparent, it is also community-led in a way that benefits those in need, for instance in Ukraine and Iran, without relying on established non-profit organizations that typically move more slowly and have high overheads.

JB: I think generosity has been baked into the DNA of crypto art since day one. It was a movement born altruistically out of the idea of exploring ways for artists — not only as individuals but as collectives — to receive a larger share for what they create. People tend to regard the financialization of digital art as a negative thing, but as one member of a generation of artists who couldn’t make a living from their work, we need a more equitable and sustainable system. Let’s pay our artists and not be afraid to talk about that. 

Yomi Dinero, Practice Day, 2023. Courtesy of the artist

AE: What are your aspirations for 2023?

DK: I’ll start with a personal aspiration for the year ahead, which is to continue to develop my art practice. I’m currently participating in the VerticalCrypto Art Residency Program, which has been amazing so far because I’m a fan girl of many of my cohort. I also have a professional aspiration. As part of the ClubNFT team, I want to continue to build and refine our tools for collectors. This space can be really overwhelming and confusing, and there remain real concerns around NFT security and protection that we will continue to address on behalf of the community. Finally, I’d like to call for more support for women and non-binary artists this year. That might be financial support but it might also be new opportunities — events and exhibitions — that bring greater visibility. 

JB: When I started ClubNFT, my mission was to make sure that other collectors’ NFTs don’t break like mine did in 2018. 

This year, I hope NFT collectors ask more questions of the marketplaces: “what is my NFT made out of? Where do the files live at the marketplace? What would happen to my NFT if you went out of business?” 

Like many of us, I find myself spread so thinly across many things, jumping from one thing to the next, that I don’t really set aside enough time to enjoy the things that require more time. But the thing that has driven me my whole life has been spending time with art in real life, carving out enough mental space to sit and reflect. That is a great source of energy for me, but I’ve not given it enough time recently. This year, I also want to continue to meet new folks from around the world. I sometimes feel that there are only certain people with whom I can interact meaningfully. As a result, I tend to stick with those individuals who entered the NFT space with me. This year, I want to be more open to meeting people that came before and after me, to hear their experiences, and to build new relationships beyond those I already have. 

Yomi Dinero, The Keke Man, 2022. Courtesy of the artist

AE: And finally, what are your predictions for 2023?

DK: I do not have a crystal ball, but I think the explosion of AI is going to continue. I see these models getting more crazy every day and the things that people are doing with them are more creative. I’m also seeing more cross-media collaboration between artists. I love it when a poet and a generative artist, or an AI artist and a digital painter, collaborate on a work, because the result is often unexplored territory. My final prediction is that there are going to be more folks from the traditional art world coming into this space. Museums, auction houses, and some of the big galleries are really starting to ramp up their participation, which is only going to onboard new collectors. Coming from that world, these folks have a deep passion for art and they have deep pockets, which could be huge for artists in this space. Jason, what have you got?

JB: To offer an alternative prediction to Danielle, I’ve loved generative art and AI art for years. But I’m honestly getting a little bit tired simply because I see so much of it. It’s hard to make great generative art and great AI art. But it’s not hard to make something. And as a result, that something is getting in front of me at an ever increasing rate. 

Right now, I find myself gravitating toward work that has a heavy human fingerprint, that looks like it is drawn using MacPaint, because it’s the antithesis of that which can be generated in high volume. 

I’ve been paying attention to AI art and generative art for a long time, and I wonder if the rest of the world may not need an antidote in a year or two. Throughout history, we’ve often seen swings from one direction to another. I hate to say it, but I also think we’re going to go through a couple of years when NFTs could go all the way down to Beanie Baby levels of investment. But I also think the market will recover. 

We all know that in crypto there are these extreme cycles — just look at what Bitcoin has been doing for the last ten years. I happen to believe that NFTs trace the path of cryptocurrency and that a lot of the big buyers are people that carry a fair amount of crypto, so when crypto crashes, their ability to buy goes down. So we’re gonna see NFTs drop really far down, but that is also a chance to collect.

Protect your NFT collection and discover new artists with ClubNFT

Jason Bailey is the creator of the art and tech blog and founder of GreenNFTs and ClubNFT, where he serves as CEO.

Danielle King is the CFO/COO of ClubNFT, and the former manager of the Department of Painting and Sculpture at The Museum of Modern Art, New York.

Alex Estorick is Editor-in-Chief at Right Click Save.