CRYPTO ART: the secondary market
by Eleonora Brizi, curator at MoCDA Museum of Contemporary Digital Art
On may 16th, 2020, the art piece by Hackatao I’ve Got the Power, tokenized on SuperRare, was acquired in the secondary market for Eth 45, an equivalent of $9,000. The market history of this art piece is fascinating. Sold one year ago directly by the artists duo to the collector Blockchainbrett at the price of Eth 1.5 ($450), the work got resold three months ago to a new collector, Ethsquiat, for the amount of Eth 5.25 ($1,135). Until a few days ago, when the collector Moderats conquered the trophy for Eth 45 ($9, 019). All of this happening in a system of smart contracts for which the artist is and will forever be remunerated with a 10% on each new sale.
Is I’ve Got the Power, the first animated GIF that Hackatao has ever made, making art history?
Other similar phenomena have been happening lately in the space: to artists directly, who saw their art pieces being acquired for the second time; to curators or collectors who bought a work of art a longer time before, now being able to resell it for an almost shocking higher price.
On January 18th, 2020, AI Generated Portrait Nude #1 by Robbie Barrat and owned by curator Jason Bailey — founder of Artnome — was bought by collector CuriousNFTs at the price of Eth 75, an equivalent of more than $12,000. Bailey originally purchased the art piece two years earlier, for the amount of Eth 0.46, at that time around $80, making a 16,212% profit on the trade. And the artist, of course, was remunerated with the 10%. On a side note, the proceeds were donated by Artnome to Kiva, a non-profit organization that allows people to lend money via the Internet to low-income entrepreneurs and students in 77 countries.
In a later statement Bailey said: “Even I am surprised by the quantity and quality of bids coming in lately for my SuperRare art collection. Not 100% this is the future of art collecting but it should be because it is awfully fun”.
Following this wave, he also organized an experiment using the secondary market, for which he donated one of the most iconic artworks from his SuperRare collection directly to the platform collection: Lockup by XCOPY. An art auction for the piece, named “Stimulus Package Auction” was hosted on Cryptovoxels and 100% of proceeds were shared amongst all the artists on SuperRare, to support them during difficult times due to Covid19.
The potential of the secondary market is infinite and it has always been a crucial point in the art market. If we only consider all the auction houses that are centering their whole business on this phenomenon, we instantly would understand how — for crazy market reasons — it is possible to earn more than from the primary market. Only, in the course of history, artists have always been completely cut off from these secondary sales, as if they were strangers to those works, as if they never created them; hence giving birth to one of the most volatile markets ever existed, where the authors are forgotten and speculation is the core. This way, artists who have been growing their quotation in time, see their art now selling for ten / one hundred times the original price from which they were remunerated.
The blockchain changes this, providing for art what already exists for other industries, similar to what in the music world we call: copyrights.
The way it does that is just writing this information in the smart contracts. Once the token is issued for a certain art piece, in the smart contract of the transaction it is written that each time that this token will be moved from an owner to another (secondary market), the artist will be remunerated with the 10%. Forever.
Different percentages were proposed by different peer to peer platforms, but lately it seems for all of them to have converged and aligned towards the same one: 10%.
Why and how does the secondary market exist in crypto art? Why, after a few years, some collectors would go back to buy older pieces, in a space so accelerated where art is consumed on the same day of its release? Few different reasons:
- In Time, the artists gained more value in the market, therefore it is an investment to acquire their older or even early pieces
- Collectors who got in contact with new pieces by their favorite artists choose to explore their work in depth
- The number of collectors approaching crypto art is expanding, therefore the demand is higher and it can’t satisfy everyone with unsold art by their favorite
- The artists that didn’t overproduce inflating their market are stimulating the circulation of already sold art pieces through new collectors willing to invest
- Curation. Some pieces were acquired by curators or passed through the hands of art curators; therefore, content around them was created over time, articles and pieces were written about them, they got popular and they gained value
On May 28th, Hackatao released their new art piece for the new platform Nifty Gateway, of which founders are the Cock Foster twins and that was bought by the Winklevoss twins through their Gemini cryptocurrency exchange . Their work is just inspired by the phenomenon of the secondary market in crypto art and following here is the text I have curated for the artwork.
A “play within a play”, Shakespeare would say.
An artwork about art, an art piece for sale speaking about the art market.
The new art piece signed by Hackatao is a meta-artwork that investigates the world of the secondary market in crypto art.
On may 16th, 2020, I’ve Got the Power by Hackatao, tokenized on SuperRare and originally sold at the price of Eth 1.5 ($450), was acquired in the secondary market for Eth 45 ($9,000).
Is the first animated GIF that the artists duo has ever made making art history?
Following this inspiration:
“Sibylla: Yes, No, Maybe”, 2020
a homage, a GIF narrating the story of a GIF.
“Will this GIF Make Art History?”
Surrounded by artworks that are pillars of the history of art, in the center is the Sibyl: the prophetess who will reveal the answer to our question.
“Yes, No, Maybe”: the market will judge.
Just like the sibyls’ prophecies used to manifest in a very ambivalent form, our crypto Sibylla can only give us hints of what it will be.
“Will this GIF Make Art History? — Yes, No, Maybe”.
Sybilla has spoken, the oracle is unveiled.
It is now our turn to pick a yes, a no or a maybe. To choose whether to play, whether or not to take part in this process of “art history in the making”.*
“art history in the making” are the words of one of the messages that Hackatao received from people in the crypto community after the secondary sale of their I’ve Got the Power. It is very likely for this kind of message to circulate amongst the crypto space when something like this happens.
CRYPTO ART: the secondary market
Eleonora Brizi, curator at the Museum of Contemporary Digital Art
