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When NFT.NYC was established in 2018, it brought together a tight-knit community of Web3 nerds. But, by 2021, it had exploded into a monster convention, with 1,500 speakers and a stacked calendar of parties bringing together art, tech, and finance types, often for the first time. At this year’s post-crypto crash edition, which ended Friday, the energy was more muted and the Web3’s various factions kept to themselves. The more entrepreneurially-minded Web3 types headed to New York’s Jacob Javits Convention Center, while those invested in NFT art, headed for their own venues.
During the opening speech of the convention, NFT.NYC co-founder Jodee Rich acknowledged the new reality, saying simply, “The speculative burn has passed.”
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Indeed it has. The convention center’s halls were quiet, crowds were thin to non-existent, and a pall hung over everything. The recurring theme of the proceedings? A pivot to merchandising and attempts to hook NFTs to its tech hype bubble replacement, artificial intelligence.
But why? Bitcoin reached an all time high last month at $73,800 and Ethereum, the blockchain most NFTs are sold on, has traded between $3,000-$3,900 over the last month (Ether’s all-time high of $4,721 was achieved during the 2021 boom). One would think there would be more excitement in the air after over a year in the so-called crypto-winter. These bumps in the market, however, haven’t brought about the headlining NFT prices that stunned the art world and launched a thousand startups in 2021.
“I’m going to give you my positive spin but the data doesn’t look good,” David Pakman, managing director of the blockchain investment firm CoinFund, said during his keynote speech in front of a slide showing NFT trading volume.
Pakman went on to argue—somewhat unconvincingly—that, while he sees crypto and NFT prices as linked, there is typically a couple month lag between the two. Then he noted that the majority of NFT trading had shifted from OpenSea–the behemoth NFT trading platform that was once crowned with a $13.3 billion valuation—to Blur, a zero-fee marketplace with tools meant for “mercenary traders” in Pakman’s words.
Getting rid of royalties for creators, Pakman went on, was “incredibly short-sighted.” One of the most valuable functions NFTs provided was ensuring that creators were paid royalties each time their NFT was sold. In late 2022 some platforms stopped honoring royalties in order to incentivize trading activity, and once one platform did, it became, as Pakman termed it, “a race to the bottom.”
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There was some good news. In February, Yuga Labs, the parent company of Bored Ape Yacht Club, and crypto-wallet Magic Eden launched a new NFT platform to tackle the royalty issue. The platform, also named Magic Eden, established the Creator’s Alliance, which includes a number of top NFT projects and companies like Yuga Labs, RTFKT, Pudgy Penguins, and Azuki who will only support marketplaces that support royalties. Whether that actually resolves the issue remains to be seen.
The most exciting development, according to Pakman and others at the convention: merchandising. Last fall, NFT collection Pudgy Penguins began selling toys based on its NFTs in Walmart. As of last month, when Walmart expanded the partnership, the toys had generated over $10 million. Panels throughout the day focused on merchandising, Mattel, and sports fans.
Another area of growth, according to Pakman, is AI. “Who’s gotten their check in the mail from OpenAI?” Pakman asked the crowd rhetorically, referring to the copious amounts of user-generated content and art used to train such platforms. His solution: mint everything as an NFT, in order to create a mechanism by which people could receive dividends when their content is used in AI training data sets.
Though there weren’t any visible art world denizens at the convention center, many flew in to New York to reconnect at other events. Eric Calderon, the founder of Art Blocks, and generative artist Tyler Hobbes attended an Art Blocks-partnered event at the Museum of the Moving Image, while recently launched NFT Storage and tech platform IPFS held a night of talks at MoMA PS1 While the convention was a little demoralizing (although, when are they not?) the artists, institutional leaders, founders, and developers at the art-focused events seemed well-rested, even Zen, as they relished in the slower, more focused pace of this year’s gathering.
“This has been my favorite edition so far,” Josh Yakov, founder of the recently-launched digital art podcast ParcPod, told ARTnews at the PS1 event. “It’s more serious. People are here to talk about infrastructure, art, important things.”
The talks at MoMA PS1 tackled the serious issue of building technologies and practices that will preserve NFTs. It was striking to compare the gender division at NFT.NYC to the PS1 event. The leaders from the companies that had supported the talks, including NFT Storage, IPFS, FileCoin, and Protocol Labs, were all women. At the Javits Center, it was hard to ignore that typically men appeared to outnumber women by around 20-to-1.
Regardless of where you were this week, the future was on everyone’s mind. At the Javitz Center, panelists and attendees talked about ways to sell NFTs to new audiences. At the art-focused events, the conversation revolved around creating a sustainable ecosystem that would allow for the preservation of and flourishing of digital art.
But there are some who take a different approach. Artist Auriea Harvey, however, was simply focused on her own work. At the opening for her show, The Unanswered Question at Bitforms gallery on the Lower East Side, the pioneering net artist, who also has an excellent, not-to-be missed show at the Museum of the Moving Image, Harvey seemed unphased by the potential of a crypto upswing, which has in the past brought rare wealth to digital artists both high and low.
“[The 2021 bull market] gave everyone an excuse to pay attention. I’ve been here for 30 years,” Harvey told ARTnews. “This happens. Institutional support happens, it appears, it disappears. People talk about bull markets, bear markets, well, the same thing with attention, there are cycles. You can’t let it get to you. This too will be obsolete.”
