The NFT market is no miracle survivor in the current bear market, seeing drops similar to those that crippled major cryptocurrencies, including Bitcoin. Blue-chip collectibles such as Bored Apes or CryptoPunks took a plunge, OpenSea let go a fifth of its workforce, and a new generation of free mints mock the utility-packed collectibles with ambitious business plans, which dominated the field before the bear market set in.
Mainstream companies seeking to capitalize on the 2020-2021 NFT hype are struggling to realize the gains they envisioned. Multiple partnerships crypto companies have struck with sports celebrities looking to boost fan engagement with NFT collections face an uncertain future.
But even as NFT collectors see their net worth diminished and trading volumes on NFT marketplaces look flat, some argue that the moment for cryptoart to gain traction is now. With casual investors flocking to other neighborhoods and JPGs which carry little artistic value withering on the vine, the NFT space could pull in another wave of artists and mainstream art collectors, hopefuls say.
If they are right, NFTs are set to undergo a major transformation, one that will stir the crowd. The question is, will the current NFT market architecture look appealing to the newcomers? A clue may lie in the performance of two cryptoart platforms with very different setups.
High-brow to some, unknown to many
In crypto, one year is a long time. One year ago, in the summer of 2021, LooksRare, currently the only NFT marketplace to pose a serious threat to OpenSea, was started. It’s also when some of the most high-profile collectors, including Cozomo de’ Medici and 6529, opened their current Twitter accounts. Snoop Dogg was new to NFTs back then.
That’s also when GEN.ART, which calls itself “an exclusive platform dedicated to generative art with 5,100 members,” was launched.
GEN.ART builds around the idea that cryptoart should be a club that’s hard to enter but worth belonging to. It operates a collection of membership NFTs, including 5,000 regulars and 100 golds. A member pass is necessary to mint the collections dropping on the platform, guaranteeing success as long as the collection has fewer items than there are members.
Besides minting access, the membership pass also allows holders to claim $GENART tokens, which carry voting power in the GEN.ART DAO. The tokens can actually be traded on Uniswap, so it’s possible to become a decision maker without touching a single NFT. Standard members can claim 4,000 $GENART, worth $145 at current prices.
Gold members can mint up to five items out of each drop, they get priority in new drops as well as gold-only drops, plus 1/1 artwork and IRL event invitations. They are also part of the steering committee in the DAO, contributing to the decision making process on strategic topics. Gold members grab 20,000 $GENART (worth approximately $725 on Uniswap at current prices).
The problem is, these membership passes are not very sought after. With average holding period at 100 days and median at just under a month, they’ve passed through the hands of around 2,300 people, less than a half what the community was meant to include. At the time of writing, 617 users held more than one pass, including four who hoarded over a 100, making it another trading token rather than a deed confirming a love for generative art.
As for the art itself, GEN.ART has its gems, but a boom in demand is yet to come. Their bestselling collection, Toha by Rich Poole, has amassed 610 ETH in trading volume since it minted in December 2021. To put that in perspective, Grifters by XCOPY, which went live around the same time, has over 5,200 ETH under the belt.
Multiple GEN.ART collections which have been around for months have yet to see all available items minted. More recent ones include much fewer than 5,500 NFTs, the standard size of an early GEN.ART collection.
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By betting on exclusivity and limited supply of the membership passes, the platform failed to garner a considerable following and make its mark on the NFT community as a whole. GEN.ART is a (still) living proof that utility-oriented token economy doesn’t mix well with cryptoart.
After all, the whole point of NFTs was to open up the elitist art market to wider audiences.
“Beauty is utility”
GEN.ART’s story stands in sharp contrast to Deca’s. A cryptoart metaverse with no gaming component, its membership is free. If Deca’s elitist, it’s by way of its rejection of any investment model. The initial passes, called Octagons, cost nothing but gas.
“Why? Because you don't create a 1,000,000,000-member community on 10,000 PFPs. Membership tokens should be for everyone,” Deca said when the Octagons began minting.
The token was stratified into six levels that unlocked additional perks, which holders could claim by engaging with the network. At first, it was an event at NFT NYC, which was attended by respected collectors like 6529 or DCinvestor, and well-known artists, including the creator of Fidenzas, Tyler Hobbs, and XCOPY.
Every Deca user can create their own NFT gallery, not necessarily made up of that user’s NFTs. As the platform’s terms and conditions read, “you are solely responsible for ensuring that you own or hold all required rights under any intellectual property or other rights in or to any Displayed Artwork,” while also noting that “a purchaser of an NFT does not necessarily obtain ownership of, or any rights under, any intellectual property or other rights.”
In fact, Deca’s whole bid is based on the creative problematization of the most famous issue skeptics bring up with regard to pricey NFTs – the tension between the non-fungibility of the token and fungibility of the associated art. “No one can stop you from creating the next Fidenza. Just like the laws of physics, there’s no whitelist or a review board. The real metaverse is as permissionless as physical reality,” Deca says.
As such, the space went beyond the mint, flip, repeat cycle by showing little to no interest in trading NFTs. “Just as we encounter physical reality with our senses, the Decaverse provides the infrastructure that brings them to life,” the manifesto goes on to say.
In other words, Deca tackles head-on the chief problem that stops mass audiences from entering the space. But at the same time, it seizes on its most fertile aspects. A few weeks after the first Octagons were minted, holders woke up to an airdrop of monochromatic pixels by XCOPY, one of the most sought after crypto artists, whose floor price currently sits at over 5 ETH.
The pixels could be “attested,” or pledged, to become part of a bigger picture, Right Click Save, which Deca called an “eternal symbol of permissionless art.” Each pixel would remain attested for a year, after which time the holder would need to rerun the process. That way, engagement of the founding community can be tracked not just on the day of the airdrop, but on a regular basis.
Deca claims to be aiming for hundreds of millions of members. Not only is that more than GEN.ART, but it also surpasses the reach of the entire crypto space. Deca wants people who aren’t into crypto at all, much like Facebook wants users uninterested in tech.
But it's impossible to say whether or not they'll succeed. If, like Cozomo appears to be suggesting, it depends on the demise of the hype behind collectible blue-chip NFTs, then the price could run high.