NFTs are mainstream
Dear Bankless Nation,
We’re at an inflection point in Ethereum’s history.
Interestingly, I can’t say I saw this one coming. I thought that Ethereum’s first major inflection point would be related to DeFi, but turns out it’s actually NFTs.
NFTs have gone from a niche corner of the cryptoverse to mainstream faster than anything else in this industry.
Why has this happened? Why is the world so ready to accept the evolution of NFTs? Why is this an ‘inflection point’ for Ethereum?
I offer my perspective as to why this is such a unique time in Ethereum’s history, and it’s all thanks to NFTs.
⚠️ NFTs are scarce crypto collectibles. Here’s the bull case and a newsletter to keep updated.
1. Non-Crypto People Are Using Ethereum
Creators are hyped on NFTs. Full Stop.
NFTs are a significant technological innovation that empowers creators.
On brand with the ethos of Ethereum, NFTs put the power back into the hands of the value-creators. Crypto is an inherently disintermediating industry, and Ethereum is specifically a platform to host any sort of disintermediating software. And NFTs are doing just that.
The world of creators is inherently an intermediated industry, with gatekeepers and middlemen every step of the way.
But the internet took a detour. Centralized social platforms became the dominant way for creators and fans to connect. The platforms used this power to become the new intermediaries — inserting ads and algorithmic recommendations between creators and users while keeping most of the revenue for themselves.
- Chris Dixon, NFTs and a Thousand True Fans
I’ve been playing around in Clubhouse a lot recently, and you can’t go 30 minutes in there without a new NFT room spinning up, which are primarily lead by artists, not crypto people.
Right now, the NFT conversation is being lead by real world digital artists and creators. This is such an important inflection point as NFT’s—and Ethereum by proxy—are not being promoted by people who don’t care about crypto. This new primitive—the programmable digital collectible—solved a very real problem for them.
Ethereum earned itself an army of disenfranchised artists to help promote its merits.
“Why the f*** would I ever make a piece of physical artwork ever again?”
- @morewoke in Clubhouse
2. Over $100M in NFT sales in February
Okay, it’s one thing that artists like to produce NFTs…but just because they exist doesn’t mean that people will buy them.
So, are people buying NFTs?
Yes, yes they are.
- Beeple sells $6.6M worth of NFTs on Christies
- 3LAU sells $3.6M NFT in a Tokenized Album Sale
- NY Times: Why an Animated Flying Cat With a Pop-Tart Body Sold for $600,000
- NBA Top Shot leads NFT explosion with $230M in sales
- $90M of on-chain NFT sales in Feburary
- Grimes Auctioning Off 10 Pieces of NFT Digital Artwork
This is the incentive that’s going to bring in every artist with a following. Minting and selling an NFT is infinitely easier than working with an agency, with 1,000x more upside. Every artist is about to drop their agent and learn how to use Metamask.
I think Beeple’s $6.6M sale on Christies is particularly interesting, because of Christies’ audience. Christies is an auction house for ‘fine art’ (wealthy older people).
The fact that digital goods are being sold to older art speculators for $6.6M implies that we are skipping over the “does a digital scarce token have value?” conversation and going straight to “yes”.
3. Digital Art is Intuitive
While I’m personally surprised that older cohort of art collectors are hopping on the NFT train so easily digital art is an obvious fit for younger generations. For Zoomers…the NFT revolution is perfect. Zoomers aren’t gonna ask “why does this have value?” They’re gonna buy it just like all the other digital goods they buy.
Digital value is obvious for Zoomers.
The best evidence for this is Logan Paul—one of the world’s biggest YouTubers. He’s selling out his 15-second ‘moments’ of his Pokemon Card reveal videos.
Get this: People paid up to $20,000 for an NFT clip of a “moment” in which Logan Paul revealed what Pokemon cards were in the packs that he was breaking open.
No, he is not selling the card or anything else. He is selling ‘the moment’. And they’re selling out at a $20,000 price tag!!
Honestly, I don’t understand this at all, but hey, who am I to say what Zoomers want to pay for ¯\_(ツ)_/¯
4. All Types of Art, Every Kind of Artist
Right now, NFTs are primarily about visual art, but other mediums of creation aren’t far behind.
Here’s an audio track + visual art NFT minted by Gramatik, sold for $25,000. As mentioned above, 3LAU is getting creative with album and song NFTs:
Musical artist Grimes is also experimenting with music / video art hybrids on NiftyGaeway, and this hybrid model is some of the dopest stuff I’ve seen. Oh yeah, and some of these initial art pieces are selling for ~$100,000.
An Overnight Revolution
NFTs are an overnight revolution in how creators are able to create and monetize, and how their fans are able to express their fanship.
This changes everything.
While not everyone has realized it yet, I think the game is done. The old guard lost and Ethereum won. Now, we just have to build out more infrastructure and tooling around NFTs, and I expect to see massive amounts of funding throughout 2021 to do so.
I remember when Andrew Steinwold boldly predicted that the NFT universe would be 100x larger than the DeFi Universe on the Bankless Podcast. At the time, I thought this was kinda ridiculous, but now I can see how prescient that was.
Nice call Andrew.
Congratulations to all the current and future artists that NFTs will monetize. I’m happy to see Ethereum return value back into the hands of the people that made it in the first place.
The era of NFT-powered digital art is upon us! Ethereum the job creator!
- David