NFTs, PFPs and Art: Finding the Early Gems
NFTs are still in an early phase of their existence, and remain synonymous in many people’s minds with art and design.
Taking this broad art and design categorization, we can break it down into two approximate segments, PFPs and art. Both of these categories are saturated but contain gems that are or might become valuable assets.
That initialism, PFP, means profile picture, and it refers to NFTs that can be used in place of a personal photo for a profile image, on social media or online in general.
These images are usually generated upon minting (the process of buying a newly created NFT), and so there is a random element around what buyers will receive. A PFP collection typically consists of a set number of items (10,000 was common, but there are many differently sized collections now) with a central theme, and there may be very creative storylines and concepts wrapped into such projects.
Common tropes include apes and other animals, punks, undead creatures (skulls and skeletons feature a lot), childlike pastel colors, anime and manga aesthetics, pixel art retro stylings and deliberately amateurish sketchings, although when it comes down to it, anything goes.
Huge numbers of these projects have launched over the last year or so, often derivative or outright rip-offs, and frequently operating as little more than minimal-effort cash grabs.
However, there are some very high-quality products, along with well-regarded collections that have cultural clout and meme-boosted desirability. A few collections clearly exhibit Veblen goods behavior and are probably more than just faddish passing trends.
On the whole, PFPs did particularly well during the last bull market, when online wealth-flexing (through throwing pumped-up crypto at prohibitively expensive JPEGs) was a price driver, and even unremarkable projects sold out rapidly and could be flipped for profit.
Many collections have now, temporarily in some cases, lost their sheen as volume dries up, but there remain items that get snapped up by long-term holders when prices drop beyond certain thresholds, and which are likely to hold their value and pick up again in the future.
CryptoPunks and BAYC
CryptoPunks are the original high-status collectibles and were bought up quickly when floor prices recently dropped below 50 ETH. Bored Ape Yacht Club and its spin-off drop Mutant Ape Yacht Club are the collections whose images are the most widely known outside the crypto world, entering mainstream awareness through celebrity holders.
Both of these projects are part of the Yuga Labs company (CryptoPunks was originally the product of Larva Labs, but the rights to the collection were acquired by Yuga earlier this year), which is building out a metaverse/gaming product, meaning its NFTs are now perceived as having utility as part of a web3 network and as providing exposure to (or participation within) an active tech venture.
In the tier below those top collections, there are strong contenders, such as Azuki, Doodles and CloneX. Away from Ethereum (the primary blockchain for NFTs), there are, among many others, Degenerate Ape Academy and Okay Bears on Solana, and on Cardano you can find SpaceBudz and Clay Nation, a project that has teamed up with rapper and NFT aficionado Snoop Dogg.
There is more to NFTs than waves of FOMO over animal JPEGs, and at the same time, as PFPs were chaotically taking over the scene, a growing number of artists were noticing the potential that NFTs offered as a profit-generating easy-to-distribute digital format.
Through minting their work as NFTs, creators were suddenly offered a welcome new route by which to try and monetize their work, and a way to connect directly with fans and collectors.
There have been claims that NFTs kick-started an online artistic renaissance, and that might not be an exaggeration. There was an explosion of creative activity, defining themes emerged, artists fed off each others’ ideas and energy, and crypto liquidity flooded through the space, delivering some generous pay checks and ground-breaking moments.
In certain respects, NFTs feel like outsider art. The culture around them is eccentric but compelling, often veering into psychedelia and absurdism, but it’s inseparable, and this is what sets NFTs apart, from both tech and finance.
Some art collections have performed relatively well during the bear market. Being closer to traditional art than the entirely novel PFP phenomenon, there may be collector confidence that select pieces which are now a recognizable part of art history. As such, when ETH and other cryptocurrencies go down in price, it is possible to pick up significant works at a USD discount.
Generative art, meaning work that is created algorithmically according to set parameters, is a recurring method within NFTs. This format requires a programmer-artist, incorporates randomness by design, and the computer becomes integral to the creative process.
Art Blocks is the most famous NFT generative art platform, and is home to the Fidenza collection, by Tyler Hobbs, which has become highly visible and sought after. Other high-profile collections within the Art Blocks stable include Chromie Squiggle and Ringers.
Pre-dating Art Blocks, which launched in 2020, there is Autoglyphs, a sparse and simple 2019 experiment in on-chain generative art whose NFTs have become very collectible.
Digital artist Mike Winkelmann, known as Beeple, made headlines early in 2021 when a piece of his work titled Everydays: The First 5000 Days, sold at Christie’s for over $69 million. Suddenly, NFTs were in the spotlight, Winkelmann was famous as the creator of the third most expensive work by a living artist, and the wider art world was taking notice.
Over a year later, a great wealth of NFT-utilizing art has been produced. The Tezos blockchain has become particularly art-oriented, with its Fxhash platform functioning similarly to Art Blocks. Cardano is home to the Unsigned Algorithms generative art collection. Damien Hirst and Banksy are among the established, pre-crypto artists to have released NFTs, and many photographers have embraced the medium, with Justin Aversano's Twin Flames collection leading the way.
This barely scratches the surface, but a huge number of creators have experimented with NFT technology. Some are from the traditional art world, some are newcomers, a few are well-known names, and many are pseudonymous talented and now find themselves unexpectedly immersed in crypto.
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