Death of the NFT Artist
— Are we doing enough to protect the NFT ecosystem ?
2021 has certainly been the year of NFTs! While the NFT boom started only earlier this year, the first NFT art piece can be traced back to 2014. NFTs gave artists, from veterans to hobbyists, the avenue to showcase their art to people across the globe. It also helped them open inlets of revenue for their work, without having to be approved by third-party entities, like galleries. Unfortunately, as the NFT ecosystem grew, so did the scams.
On August 27, 2021, the Wall Street Journal published a report on scammers and hackers on the NFT Marketplace. According to the Journal, 122 artworks of visual artist Milos Rajkovic had been listed as NFTs on OpenSea without his consent. Like Rajkovic, many artists have borne the brunt of artist impersonation and NFT theft. Many collectors have also been been victims of fake NFT scams, where they spend thousands of dollars to buy premium NFTs, only to find that they are duplicates without any value. Some online scams such as phishing and fake giveaways can be limited by educating people on how to avoid it. Unfortunately, scams which involve duplicate NFTs and artist impersonation is difficult to spot, due to the vast ocean of NFT marketplaces and ever-growing NFTs.
As these malpractices surge, artists become wary of minting their art as NFTs, and collectors reconsider buying NFTs from unknown artists. In order to protect art, restore trust in NFTs and promote artists, there must be a solution which penalises these miscreants and deter future offences. Despite the growth of the NFT ecosystem, into a multi-billion dollar market, no such guaranteed solution exists till date.
Conventionally, victims of scams resort to the legal system to seek justice. In a world which relies on commercial transactions, but where parties lack mutual trust, external institutions or mechanisms are indispensable. Often, the trust and confidence necessary to enter a commercial relationship comes from the assurance that, if a party defaults, the legal system would protect the victim. Malpractices or disputes in the NFT ecosystem can also be tackled with efficient external mechanisms.
Currently, parties have the option of resorting to courts or international arbitration to resolve disputes arising from NFT trades. However, considering the uncertainty of laws applicable to NFTs and the international nature of the transactions, both arbitration and court resolution are not ideal. Firstly, these mechanisms can be expensive, dilatory, and may require legal counsel, which most NFT users cannot afford. Secondly, most adjudicators and arbitrators may not be equipped to handle NFT disputes, because of its novelty and their lack of understanding. Consequently, lack of an accessible and affordable dispute resolution mechanism will leave victims without remedy.
Alternatively, victims could approach NFT marketplaces to resolve their complaints. For instance, where an NFT is alleged to have been minted by someone without the consent of the artist, the artist may request the NFT be taken down. However, this would require the marketplace to make unilateral decisions, which is antithetical to decentralisation, the ethos of blockchain. If this decision making power could be decentralised, and carried out in an affordable and timely manner, without compromising efficiency and quality of the adjudication process, the NFT ecosystem would be in safe hands.
Currently, there are decentralised dispute resolution platforms which strive to provide affordable and quick resolution services. While this is a great step towards protecting and promoting commerce, it is not an ideal solution for the billion dollar NFT industry, as the adjudicators of such platforms would not be equipped to handle NFT disputes. Considering the potential for growth, the NFT ecosystem deserves a niche, decentralised dispute resolution platform, lead by a community which can relate to the sentiments of victims of NFT scams, and promptly render justice.
Resolutio is a project which aims to protect and promote art and NFTs, by providing a reliable dispute resolution and NFT verification mechanism for the NFT Community. It is the ideal solution, which balances decentralised decision making and the spirit of the NFT Community, by empowering the NFT Community with the tools required to protect the ecosystem.
Learn more about resolutio in our next post. It discusses how a community centred NFT dispute resolution platform can help NFT artists and collectors, and restore trust in NFTs.