Cashing in on the NFT Boom

Amrit Pal Singh, a Delhi-based designer, has been creating 3D ‘toy libraries’ with interesting faces for a while. His work won him a grant from the Adobe Fund for Design, but Singh admits that he had no actual monetisation plans for the library – until he listed the faces on Foundation, a marketplace for Non-Fungible Tokens or NFTs.

On 22nd February 2021, he sold his first NFTs – toy faces of Van Gogh and Frida Kahlo for ETH 3.7 (US$ 5,400) and ETH 3.9 (US$ 5,678) respectively.

Three days later he sold two more toy faces for ETH 15, or roughly US$ 24,800. These 3D digital faces were based on Daft Punk, the electronic music duo that caused their fans much heartbreak by splitting up last month.

Quick NFT Reckoner: (Skip if Initiated)

The decibel level around NFTs has recently reached alarming proportions, so here’s a quick reckoner. Feel free to skip this section if you already know the basics.

What’s an NFT? (In English please)

NFT is a crypto token that is connected to a digital file, usually art or music and represents the unique ownership of that digital asset. 

This record of ownership or NFT is recorded on blockchain, which makes it a permanent public record and serves as a certificate of authenticity. (Blockchain makes it possible to see all past owners and transactions).

Currently, Ethereum is the most popular blockchain for NFTs.

You mean NFTs are digital collectibles? Like digital Pokemon cards for example?

That’s actually a good way to put it. And NFTs can easily be traded too.

But hold on, if something is digital, it can be copied easily

Yes, it can. There’s nothing to stop you from taking a screenshot of a piece of art or downloading a song that someone else owns.

Then why would anyone pay for an NFT?

That’s the argument skeptics like Andrew Wilkinson, Founder, Metalabs and Seth Godin are putting forth. Marc Andreeson, co-founder of venture capital firm, Andreeson Horowitz, holds the opposite view.

“Collecting has always been about the emotion, not the physical value. You can have a million copies of the Mona Lisa, but it wouldn’t make the original any less valuable.”

Marc Andreeson, co-founder, Andreeson Horowitz

The reason that collectors are mining NFTs are many, from bragging rights to forging a closer connection with the creator. The NFT rush may be fuelled by the fact that crypto currency prices are at an all-time high, creating enough liquidity in the system.

Very Fungible Prices

Even people who don’t understand NFTs are impressed with the prices that they are commanding.

Perhaps the best known NFT creator is Mike Winklemann who goes by the name Beeple. He has posted a new work of art online every single day for thirteen and a half years, starting in 2007. In December 2020, the first auction of his digital art grossed US$3.5 million in a single weekend. Beeple has created a collage of the art he posted for the first 5000 days, and it is up for auction by Christie’s, making it the first major auction house to offer a purely digital work with a unique NFT.

NFTs can apply to any digital memorabilia. Jack Dorsey, founder of Twitter, listed his 15 year-old tweet “Just setting up my twttr” for sale as an NFT on marketplace Valuables. The highest bid received at time of going to press was US$294,444.

In a signal to where NFTs and brands could go, the National Basketball Association of America (NBA) has partnered with Dapper Labs to create Top Shots, a blockchain-based trading card system that has generated over US$230 in sales already. (Dapper Labs earns a commission on peer-to-peer exchanges).

Indian Creators and NFTs

Several Indian creators like Singh are experimenting with NFTs.

Siraj Hassan, a Chennai-based artist, recently sold a piece of art called Betrayal on marketplace KnownOrigin for ETH 0.65 or US$880.

Chennai-based music producer/3d artist, EZZYLAND has found his NFT sweet spot through audio-visual work. He got into crypto through Audius, a blockchain-based music streaming platform. After he received a “fat payout,” he decided to educate himself so he could be part of the decentralisation movement.  That’s how he learnt about NFTs. The first one he minted sold within 24 hrs for ETH 0.5.  “It’s not even about the money, at this point,” he says, “it’s the excitement that stems from new opportunities and innovation.”

Rahul Chakraborty, a Bengaluru-based designer, says his interest was piqued when he heard creators in his Twitter network talking about NFTs. He spent some time researching crypto art before a friend invited him to Foundation. He sold his first NFT, titled ‘A minimalist smart device inspired by Japanese aesthetics,’ on 4th March, 2021 for ETH 0.12 or US$177.

This is Chakraborty’s advice for newbie NFT creators:

• To get started, you only need a cryptocurrency wallet, like Metamask and an NFT minting platform. Popular platforms include Foundation, Superrare, Mintable and Rarible. Some require invites and have curation processes. But before taking the plunge, equip yourself with an understanding of how blockchain works.
• Do your research and look at other listed artworks before you set a price for your NFT.
• Build a network of NFT artists on Twitter, Reddit or Discord to ensure your NFT reaches the right audience.
• Finally, don’t lose sleep if no one bids on your NFTs immediately – it takes time to find the right buyer.

Hot or Not?

Are NFTs here to stay or just another crypto hype-cycle, like the ill-fated ICOs? Musician 3LAU, who sold over US$11.6 million worth of NFTs in an auction to promote his new album, Ultraviolet, said in a Clubhouse chat that all the factors needed for the success of NFT’s are available today – digitally savvy creators and the global acceptance of blockchain and crypto currency. More importantly, the idea of disintermediation, which is at the heart of NFTs, has gathered momentum across sectors.

Many obstacles remain. Khyati Trehan is a Senior Communication Designer at IDEO Munich and an independent visual artist by night. While she was going through the curation process at marketplace Superrare, she chanced upon some pieces that looked like they had used her work as starting point. Trehan says that while Superrare was responsive, they also made it clear that they could not offer legal advice or take action on her behalf.

Still, she says, the unfortunate event started a dialogue about how this can be dealt with in the future. For example, remixers could explicitly mint an NFT that provided a reward to the original artist, given that collectors are buying into provenance and authenticity.

There is of course, the larger question of environmental impact that looms large over anything crypto.

For now, however, we expect more and more creators, both Indian and global to start minting NFTs. Singh says this has been the finest point in his creative journey, which has included trying several businesses and holding two full time positions. “Who knew,” he laughs, “that making toy-like illustrations and having fun, would trump it all.”