NFT Roundup #9: all about generative art.
Buy the rumor, sell the news
This is a curated newsletter, covering news stories about NFTs. The NFT market is moving rapidly, and this is an attempt to provide some means of keeping up with its developments. Your curator is Dave Friedman.
If you like this newsletter and want to see more of it, please consider liking it, commenting on it, and sharing it, as those actions train the algorithms to expose this newsletter to a broader audience.
Algorithm-generated NFTs are quickly rising in value. Can art blocks up the quality?
The tension between art and commerce has existed as long as there has been art for people to collect and sell. Andy Warhol commented on this with his infamous Campbellās soup cans:
More recently, Jeff Koonsā industrial production of bulbous metal sculptures optimized the production of art in much the same way that a factory optimizes the production of widgets. Now come algorithmically-generated NFTs:
A new generative art platform, Art Blocks, has set out to prove that art made with algorithms can be complex and genuinely aesthetically compelling. On Art Blocks, artists upload their algorithm and cap the number of iterations it can produce. Buyers select an algorithm with a style they like and then mint pieces, each of which is unique but randomly generated. It functions a bit like a āget-what-you-getā gumball machine, except some treat what comes out like a stock option.Ā
Art Blocks isnāt as worried about the long-term value of NFTs as they are about raising the standards of algorithmic art. āUntil today, a [generative] artist would create an algorithm, press the spacebar 100 times, pick five of the best ones and print them in high quality,ā Erick Calderon, the CEO and founder of Art Blocks, said, explaining how generative artists typically make their work. Then they would āframe them, and put them in a gallery. Maybe.āĀ
But Art Blocks has completely changed the status quo for generative art. āBecause Art Blocks forces the artist to accept every single output of the algorithm as their signed piece,ā Calderon said, āthe artist has to go back and tweak the algorithm until itās perfect. They canāt just cherry pick the good outputs. That elevates the level of algorithmic execution because the artist is creating something that they know theyāre proud of before they even know whatās going to come out on the other side.ā
There is a tension here between abundance and exclusivity. The conventional notion of art is that of a painter or sculptor laboring at her work for many hours, whereupon a collector or a museum acquires it, for humanity to enjoy.
But thatās not what happens with algorithmically-generated art. Rather, the artist sits in front of a computer and builds out an algorithm to generate art en masse. And, as with every other instance of software eating the world, each additional copy has a marginal cost of exactly $0. The artist can modify the code slightly, re-run the algorithm, and spit out a slightly different piece of an art. And the artist can do this ad infinitum. And the artist can automate this to a very great extent by introducing a pseudorandom number generator to manipulate numerical values in the code. If youāve ever played with code used to generate Mandelbrot sets, this ought to be familiar.
And this is a challenge for conventional notions of art!
Art Blocks appears to try to finesse these issues by creating a set of incentives for the artist such that the artist has to sign each iteration of her algorithm. The artist, in effect, has to ensure that the algorithm does what she wants to do, and confirm that she has done the work. Art Blocks, in other words, tries to introduce friction into the creation of algorithmically-generated art, in order to replicate more traditional notions of the production of art.
Whether this has any bearing on or influence on the broader NFT market remains to be seen. Much of the art world is overly theoretical and insular, and popular NFT platforms like OpenSea seem to care little about whether an NFT creator creates one or thousands of NFTs.
Fidenza: Tyler Hobbs wrote software that generates art worth millions
Continuing with the theme of algorithmically-generated art created en masse, letās consider Tyler Hobbs:
Fidenza is the brainchild of Tyler Hobbs, 34, who quit his computer engineering job to work as a full time artist. He struck ETH when he discovered Art Blocks, an art platform that creates NFTās based on generative art, and became a curated artist.Ā
The work is named after a town in northern Italy, which Hobbs stumbled upon via Google Maps. Inspired by abstract expressionist painter Francis Klein, Hobbs likes to use the names of places for his art because they carry little baggage or definitive meaning.
A total of 999 works were ādroppedā, selling out in 25 minutes for 0.17 ETH, or about $400. The approximate $400,000 in sales were split 90/10 between Hobbs and Art Blocks. On the secondary market, chiefly Opensea, his works come with a pre-programmed 10% commission, which is automatically shared 5.0%/2.5%/2.5% between himself, Art Blocks, and Opensea. With an estimated 85 million in secondary sales, Hobbs has already earned over $4 million in commissions.
Rarely do we see the tension between art and commerce so explicitly as we do here.
Hereās Fidenza #313:
Is this interesting? Is it something you want to buy and hang in your digital gallery? Well, as with all art, taste is subjective, and, as the clichĆ© goes, one manās trash is another manās treasure. Clearly someone likes this art, and is buying it. And to a very great extent, that is pretty much all that matters.
Insider trading on NFT marketplaces spikes concern over regulation
Given the amount of money people are minting by minting NFTs, itās inevitable that some will try to cheat the system. OpenSea had an employee trade in front of its customers because he knew which NFTs were going to be featured on its home page, and therefore be most in demand. Getting in front of demand is always a good way to profit. But if you do it because you know something that the public doesnāt, that looks like, if it is not actually, insider trading.
And OpenSea is not the only organization dealing with dishonest employees:
An employee at the generative art minting platform Art Blocks was also recently suspected of insider trading by members of the Art Blocks Discord messaging site, which is public and can be posted on by anyone.Ā
On September 8th, user Big S., an Art Blocks collector, posted on Discord that he had been looking into the upcoming release of an NFT series by artist Monica Rizzoli, slated to be featured in the curated projects section of the Art Blocks website. It was then that Big S. discovered that an Art Blocks employee had purchased one of the few works Rizzoli had minted on Foundation, an NFT platform, a week before the public announcement on the Rizzoli feature had been made.Ā
Regulators and lawyers move more slowly than does technology. But lawsuits against these platforms are inevitable, as is increased regulatory attention. One thing I will be paying attention to is how effective these platforms are at cleaning up their own markets, before regulators and/or lawyers ruin the party.
Art blocks: a new approach to NFTs with Generative Art
A closer look at Art Blocks, which I discussed above:
Generative art is a beautiful blend between human creativity and artificial intelligence. Besides enjoying the artistās vision, collectors also receive a piece they definitely know is unique. This surprise element makes transactions even more exciting ā but thereās a catch.
Every art piece on Art Blocks has a specific number of mints available. This means that you only get one shot at getting a generative piece you like. Once a collection runs out of mints, it will never be repeated.
Luckily, curated collectibles release quarterly, so collectors can prepare for minting ahead of time.
Charlie Munger is famous for saying āshow me the incentives and Iāll show you the outcome.ā What he means by this is that people respond to the incentives given to them. If someone behaves in a manner at odds with your expectations, consider the incentives the person is operating under. So Art Blocks is trying to create a set of incentives such that the art created via its platform is more authentic, for some definition of authenticity, than mere mass production.
How to approach the generative art boom
This edition of my newsletter has focused on generative art. Which leads to the obvious question: how can someone participate in the boom? This link provides a wealth of practical advice for those looking to explore generative art:
Generative art is algorithmic art, a form of computer-generated art whose pieces come via an algorithm that an artist has customized for making unique outputs.
In the context of Ethereum and NFTs, generative art typically involves an artist uploading a custom-tailored artistic algorithm into a smart contract. When a collector calls the mint function on said contract, the underlying algorithm is pinged in a unique way leading to a unique artwork output in the form of an NFT.Ā
Accordingly, automation and disintermediation are salient elements of Ethereumās generative art scene.
Thereās much more information at the link.