From Michelangelo to the metaverse: the past, present and future of art markets
[Originally published on Mirror]
NFTs have given art markets a breath of fresh air.
As we explore CryptoArt’s next chapter, it’s important to understand what led us here.
We’ll start by exploring the history of art markets, their commission structures and the role galleries have historically played in their success.
From there, we hope to educate readers on where SuperRare fits into the conversation, and how this positioning sets the platform up for its next chapter.
We’re going to cover hundreds of years of history in five minutes, so buckle in!
The Origin of Art Markets
As early as the middle ages, art made for the sake of worship or didactic purposes was commissioned by religious and political leaders. Throughout the Italian Renaissance this form of patronage continued with artists such as Leonardo da Vinci creating murals like the “Last Supper” and Michelangelo painting the ceiling of the Sistine Chapel.
As time passed, art was no longer confined to the walls of churches or other interiors. A new type of trading activity began, which could be traced to Albrecht Dürer (1471–1528) who, operating as an agent for himself, produced and sold works of art directly to his clients; forming what is arguably one of the key starting points for the primary market today.
This notion of collecting physical artworks and their changing hands amongst aficionados continued into the Dutch Golden Age where artists like Rembrandt van Rijn (1606–1669) was commissioned to paint portraits for families and nobility. Next, Paris-based entrepreneur and art impresario Paul Durand-Ruel (1831–1922) took things to the next level, redefining the role of the dealer and the art market once more. Durand-Ruel began the careers of many of the most famous Impressionist artists like Monet, Manet, Degas and Renoir, organizing solo exhibitions, offering stipends to support their careers and even showing their works in international outposts in New York and London.
In the new world, Leo Castelli (1907–1999) furthered the work of Durand-Ruel in an American context, creating the notion of artist representation and building a roster of artists who operated under his guidance. Museums began purchasing newly made art and Castelli was involved in these transactions. Meanwhile, towards the end of his career, auction houses, whose clientele was previously a niche subset of art dealers, began catering to an ascendant collector class who purchased works by well known artists who got their start through Castelli. A key example: the 1973 Sotheby’s sale of the taxi fleet owner Robert Scull’s paintings. As part of this sale, artists like Jasper Johns, Robert Rauschenberg and Andy Warhol saw works previously sold by Castelli, resold at a premium.
Today auction houses have their own private sales units and, more and more, are becoming one-stop ecommerce shops and, less so, auction houses in the traditional sense. Many of Castelli’s artists, artist estates and collectors were passed down to Larry Gagosian, one of the most powerful art dealers in the world today.
Over the centuries, art has become commercialised, commodified and traded in many shapes and forms. What happens next is anyone’s guess.
The Evolution of Galleries
Before the internet, galleries controlled the marketing and financial rails for art.
Traditional galleries market and disperse artworks, and arrange exhibitions that, until very recently, were confined to the physical domain. These brick-and-mortar institutions often bear the increasing costs of rent and marketing. This, in turn, inhibits what they can offer to collectors given certain works need to be sold at certain prices to maintain rent and overheads and these works often need to cater to certain geographic specificities and size constraints.
That’s because in the physical art world, there’s a finite amount of gallery space for display; artists are reliant on galleries to establish a market for them. The premier and most financially endowed galleries have the most leverage and artists are often subjected to the standard gallery-artist commission structure, typically a 50–50 split between artist and gallery.
With CryptoArt, galleries can play a different role. In the metaverse there is infinite space for digital works to be displayed, so we don’t need physical galleries to play the role of gatekeeper.
Limitations of Traditional Art Markets: Salvador Mundi
Salvador Mundi is a painting by Leonardo da Vinci with a fraught and fiercely contested history, underscoring some of the more intriguing machinations of the art market. Its precise date of execution is disputed, alongside its provenance. Indeed, it was first sold for 2005 for $1,175 supposedly not as a real da Vinci, and then resold in 2017 as the real deal for $450,312,500 — the current record price for any work sold at auction.
This being said, the work’s authenticity has been questioned by numerous art historians including Frank Zöllner, the author of the catalogue raisonné on Da Vinci. Also, between 1666–1900 the work’s whereabouts were unknown. Not to mention, several other versions of the painting exist. It remains inconclusive whether the work was painted by the master and sadly its whereabouts today are also a mystery. Salvator Mundi exemplifies the opacity of the art world and the way in which works are sold. Clearly it’s time for a change.
Lessons from History: Foreshadowing the Boom of NFTs
The traditional art system, sooner or later, ends up subsuming the artistic movements that wish to escape it. For example, the early Impressionists were received with disdain from the press and yet redefined the state of Western art. In the 1960s, Andy Warhol openly proclaimed his affinity for commercial success and making money, looking to promote his art and brand to the widest audience possible. While the “making money is the best art” maxim was ridiculed at the time, this self-commercialisation of his work became an integral part of art history and pop art as a movement.
Today the old guard regularly speaks pejoratively of crypto art, but, if history is any measure, this is a sure-fire signal that crypto artists are on the right path.
Built as a digital-first, 24/7 primary and secondary art market, SuperRare presents a new path forward.
Thanks to the advent of NFTs and standards like ERC-721, provenance and authenticity can be proven from now through the rest of history. Through systematic transparency, commissions, sales figures and lineage are inscribed forever on an immutable digital ledger. Further, through smart contracts, NFTs allow for programmable royalties on secondary sales. This is something SuperRare pioneered for artists since day 1 and more recently for collectors.
The digital nature of NFTs places less reliance on galleries due to a lack of need for physical displays — leading to an influx of global activity and bidding competition from collectors spread across different regions of the world.
For those unfamiliar, SuperRare charges the buyer 3% on top of the purchase price of any work. This comes in addition to a 15% primary sale commission, netting to 18% on the first sale of any artwork on the platform. In aggregate, this commission totals to less than half of what a traditional gallery charges, all of which is captured on-chain in an entirely automated system.
These commissions are currently routed to a wallet controlled by the company that created SuperRare. However, the notion of community ownership is one that we are taking seriously in the months to come.
For artists, a 10% royalty is earned on every subsequent sale of the work in the marketplace–forever. Looking at our earlier example of Salvador Mundi being purchased for $1,171 and later being resold for $450M, that’s a difference of $45M that could be programmatically paid to the original artist (or their estate) as part of the sale transaction.
Taking that a step further, SuperRare’s newly launched Collector Royalties also present incentives to those who collect and resell work — an opportunity that has historically been gated to private dealers and art markets through black box deals.
Thanks to these new systems, SuperRare is now home to more than 1,400 artists. In total, nearly $79M in works have been sold on the platform — both a staggering figure and an inspirational motivation when we look at the trillion-dollar legacy art market today.
We are on the verge of creating the next generation of art markets.
These models create channels for artists to receive sufficient promotion, either independently or by working with partners of their choosing.
These creators are now responsible for promoting drops, creating buzz, running auctions and garnering large and successful sales, creating media rich meta-gallery content and helping to ensure authenticity.
While it comes at the cost of more responsibility on the creator, it provides optionality. The galleries of the past will always exist in this world but, now, there is a choice.
The new model of digital artwork appreciation needs to have a system of reputable brands in place. But rather than containing works within the physical domain, these “galleries” can form digital networks that cross reference one another and function as part of a transparent ecosystem to bestow value and recognisability.
The blockchain serves as not only a methodology of improving transparency in transactions but also as an opportunity for artists to continually receive royalty payments from secondary sales.
Looking 100 years into the future, it’s easy to imagine a vibrant network of digital art markets routing billions of dollars in commissions to all affiliated parties in real-time. Best of all, the authenticity of these works can never be refuted and, as a result, neither will the novelty.
For SuperRare, we’re thankful to have played a small role in the creation of this next generation.
While we’re proud of where we’ve come, the next chapter will even more deeply involve the community of artists, collectors and curators who have gotten us to where we are today.
In the coming weeks, we’ll be sharing more about the future of curation on SuperRare — and how you can become one of the names being written about 500 years into the future.
Until then, stay Rare!
Cooper Turley, Crypto strategy at Audius, DAOs at Friends with Benefits, SuperRare community contributor at 🔥 _ 🔥
Justin Wasser, tech & crypto strategist, and advisor to SuperRare
Nico Epstein, Co-founder of Artvisor, and lecturer at Christie’s Education