Artistes, musicians and art collectors are minting millions with non-fungible token (NFT) art.
Nyan Cat, a cult GIF from YouTube that mixed a catchy pop song with an animated cat and became an internet sensation turned 10 last month. Creator Chris Torres therefore made a one-of-a-kind rendition of this animation and sold it for $590,000 in an online auction, 1 GIF animation, late last month.
If the west has been swooning over non-fungible token (NFT) art, Indian aesthetes too have begun trawling through marketplaces for digital collectibles—music, videos, animations and installations—using Ethereum blockchain, a cryptocurrency, like Bitcoin but with blockchain technology which stores information. And what’s more these buyers are finding there is also made-in-India digital art that they can snap up as well.
For instance, Siraj Hassan, a Chennai-based artist and illustrator’s first art series titled ‘Caged,’ is being lapped up by art collectors. Even while a 50-second video by Grimes, the girlfriend of Elon Musk just went for $390,000 and another video by Beeple found its way into Christie’s catalogue.
“They not only give the buyer bragging rights of owning new and rare digital art but also work as investments that increase in value over time, just like art in the real world,” said Ramani Ramachandran, CEO of Router Protocol, a fintech startup that is backing an Indian NFT music platform.
Simply put, a bitcoin is fungible—trade one for another and you’ll have exactly the same thing. But a one-of-a-kind trading card, however, is non-fungible, unique and therefore it is far more valuable to hold digital assets like an art piece in the form of a digital token.
“NFT art can be valued in and purchased in lieu of cryptocurrencies which can be converted into fiat money like USD,” Ramachandran said.
Just like sports collectibles, the market for NFTs is estimated to have grown to $100 million while opening up myriad possibilities for artists. This includes greater autonomy and a fair share of the value upside according to those aware of the dynamics of this buzzing marketplace.
For example, Grimes has already sold $6 million worth of digital art—videos of flying cherubs and swords and a cross, set to original music—in an auction on Monday. While a video clip of basketball player LeBron James went for over $200,000 on NBA Top Shot, a platform that allows users to collect and buy or sell officially licensed NBA video highlights.
Closer home, digital artists like Hassan are flooding marketplaces like OpenSea, Known Origin and MakersPlace with their creations that are fetching payments and value in Bitcoins and Ethereum. Hassan has sold 27 out of 31 of his ‘single edition’ pieces which depict miniatures of trees, surrealistic human figures, fountains and skulls inside bell cloches in neon backdrops.
Single edition NFT art is considered rarer and of higher value due to its scarcity value. “In the case of one of my artworks, it was resold by one buyer and I earned a royalty on that resale. Artists can assign what percentage of royalty they want to earn with every resale so in this way, we can actually earn from the secondary market too,” the Chennai-based artist said.
To earn royalties from resale in the traditional art mart is regarded as very rare. “With NFTs, there is no scope to cheat the artist out of his or her royalty because every buyer and seller is publicly viewable and trackable on the blockchain” Hassan said.
NFTs operate on a blockchain and are publicly accessible such that anyone can see the details of any NFT transaction. This means that the owner and reseller and every transaction related to the artwork is publicly accessible. Both the original artist and the original owner of the artwork are recorded on the system forever.
Pop musicians like Udyan Sagar, better known by his stage name ‘Nucleya’ is also considering publishing his own NFT music. Earlier this week, the musician tweeted “The #cryptoart space sounds intriguing. Thinking about doing a #NFT drop. Thoughts?”
Sources close to the musician said that he would be launching an NFT album by the end of this month.
Ramachandran of Router Protocol and Tushar Aggarwal, Founder of Persistence, another DeFi startup are helping build out Vinyasa, an NFT platform for music, specifically for popular Indian musicians and independent artists, which aims to monetise their work and build community.
Nischal Shetty, founder of WazirX is also looking to build an NFT project. “Lot of local artists in India can benefit immensely from NFTs. We are trying to understand the market need right now and are seeing many users showing interest in dealing with NFTs.”
While some purists worry about the would-be long-term benefits and worry if speculation is fanning asset prices and the resulting fad, others are embracing it wherever there is real value.
“It’s new media and it’s fascinating in many ways. Great art can come from any media. I always say if your mind and heart connect to something and if it leaves a noticeable impression on your soul, then that piece of art has connected with you or vice versa, whichever medium it may be. For me that defines great art,” said Reena Lath, director at Akar Prakar, a Kolkata-based art gallery for modern and contemporary art in India.