Can an Art History Framework Help Expand the NFT Market?

When digital artwork began selling for millions of dollars last year, the shock of pixelated villains and computer graphics turned some traditional collectors into crypto skeptics.

The argument that NFTs, or non-fungible tokens, represent the future of the art market, has been unattractive to most of these buyers, leaving gallery and auction makers to focus their attention on a new class of millennials from the tech world.

That arrangement left auctions prioritizing Pak’s and Bored Apes – collectibles closest to the crypto-brand names – in sales further alienating skeptics.

But a year later, Sotheby’s began using a more subtle art-history language to lure traditional collectors toward blockchain-based collectibles for sale, Native Digital NFT. It runs from April 18-25 and is designed to unite early pioneers of computer art with their crypto counterparts.

Traditional collectors are often drawn to origin and lineage, so a sale that focuses on computer art’s lineage may help convince them that NFT artists have a stronger art-historical foundation beyond the voices of online forums.

The event features some of the earliest examples of generative art, the kind in which control of the creative process is determined by algorithms or a predetermined process of creating images. Examples include artists who worked in the 1960s and 1970s such as Vera Molnar, Chuck Csuri, and Roman Verostko along with modern performances from digital artists Dmitriy Cherniak, Tyler Hobbs and Anna Knights.

Sotheby’s press release says the “visual and groundbreaking work” of Molnar, Suri and Verostko “has provided the foundation for digital artists at the forefront of digital art and the NFT movement.”

“Generative art is a movement that has sparked interest,” said Michael Bohana, 30, a contemporary art specialist who organized the sale of Sotheby’s. Having more than half a century of history behind generative art helps calm skeptics, he said, adding, “Discussions with traditional collectors have been easier.”

NFTs of art and collectibles generated more than $23 billion in sales, according to some industry reports, a number that some experts said could indicate the bubble is preparing to burst.

Technical advisor Todd Levine, said vendors are producing more exhibits with historical information to expand market appeal and create a sustainable business model.

“These are the godfathers and godfathers of digital art you need to know,” Levine said of the older artists included in the auction. “You can’t continue to sell NFT products without this cultural context.”

In February, an anonymous collector who had sent 104 CryptoPunk NFTs for sale at Sotheby’s checked them out at the 11th. The auction house estimated that CryptoPunks, a popular business that is among the oldest minted on the Ethereum blockchain, could fetch up to $30 million — and some collectors have viewed the sale as a barometer of the NFT market. But early bids were lackluster and after the sender withdrew his digital holdings from sale, post a meme On Twitter he mocks the auction house for thinking he actually wants to sell NFTs with them.

Subsequently, he used the group as collateral for an $8.3 million loan that was registered on the blockchain by a company called NFTfi. Levine said the exchange showed that the CryptoPunks group still had a market, but perhaps not as predatory as the auction house had hoped.

“He can have his cake and eat it too,” said Levine. “He got $8 million to play with and didn’t have to sell CryptoPunks to raise money.”

There are indications that the new historical approach is working. Earlier this month, Sotheby’s sold a receipt to French artist Yves Klein for $1.2 million, nearly double its high estimate. The little piece of paper was part of the artist’s 1959 project called The Zone of Empty Space, a project described as the art’s first token, decades before the proliferation of NFTs. The technical process usually involved Klein giving buyers receipts in exchange for gold. In some cases—obviously not all of them—buyers burned their receipts while Klein dropped half of their payments into the Seine.

Although her name is not yet as recognized as Klein, Molnar’s star is on the rise as collectors search for the origin story of digital art from the analog era of the 1960s. The Hungarian artist, now 98, currently has solo exhibitions at the University of California, Irvine and the Venice Biennale. The digital movement has embraced, creating a new NFT for auction, a high estimate of $150,000 — nearly 10 times the top estimate of the early work, “1% de désordre,” which it’s auctioning.

“I used to not know myself, to work in my corner,” Molnar said in an email interview about the new recognition she’s receiving. “You feel good!”

(Molnar created her first computer graphics in 1968 using an IBM machine and punch cards.) “I hate everything that is natural and love the artificial,” she added, speaking of NFTs. “I am very happy to do this because it is the world today.”

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