The Highs and Lows of NFTs This April
Following the record-setting sale of Beeple’s NFT at Christie’s in March of 2021, an NFT fever swept the art world. Leading auction houses quickly followed in Christie’s footsteps to offer innovative digital artworks by Pak and Mad Dog Jones. Contemporary artists, celebrities, and brands propelled themselves into the world of cryptocurrency and non-fungible tokens. However, not every headline has been positive as the stability and risks of NFTs are better understood.
After an eventful month, Auction Daily surveys the highs and lows of NFTs this April.
April 2021 – Highs
Sotheby’s teamed up with anonymous artist Pak to launch its first-ever auction of NFTs. The sale brought in a total of USD 16.8 million. Held between April 12th and April 14th, the event included an unlimited number of minimalist cubes plus two limited-edition auction pieces. 3,080 buyers together spent $14 million on 24,000 “open edition” cube images. The limited-edition auction works pushed the sale total slightly higher. One auctioned piece, which allows the owner to change the artwork one time after purchase, sold for $1,444,444. The other available NFT, represented by a single pixel, sold for $1,355,555.
“I believe we have placed a huge milestone for digital creatives,” Pak said in an emailed statement after the auction. “This drop validates many things.”
Phillips also embraced NFTs this April. The auction house collaborated with digital artist Mad Dog Jones (also known as Michah Dowbak) to offer a self-replicating NFT. The sale closed on April 23rd. The NFT started at just $100 before 16 bidders pushed up the price in the final few minutes. The work sold for $4.14 million, making Dowbak the most expensive living Canadian artist.
NFTs graced headlines around the world in April 2021. An animated artwork by contemporary artist Mari Kim became the first NFT sold in South Korea. Pica Project, a technology and art investment company, launched its first NFT auction on DeFine Art. Kim’s work sold for KRW 600 million (USD 540,600) and set a new record for the artist. Elsewhere in Korea, a new blockchain-based auction platform welcomed NFTs for certification purposes. Auction OK plans to offer NFT certificates that verify the sale of real-life objects. The platform sponsored a charity auction using the new technology in early April, raising funds for the Korea Blood Cancer Association.
April 2021 – Lows
The rosy glow of NFT artworks started to wear off this April. Critics quickly pointed out the plummeting prices of NFT sales. Average daily prices now settle around $1,500 in the art category, down from $4,000 in mid-February. The total number of sales dropped as well. While speculative buying of NFTs may not be over, it seems that the market is moving to correct itself and develop a new price plateau.
NFTs bring other concerns. Artnet’s Tim Schneider recently sat down with Monsieur Personne, a white hat hacker who has revealed some vulnerabilities of NFTs. The value of NFTs entirely depends on their authenticity— which may not be bulletproof. Using a method called “sleepminting,” Personne successfully created a counterfeit version of Beeple’s EVERYDAYS: THE FIRST 5,000 DAYS collection. The forgery could be re-listed on auction platforms and appear perfectly legitimate. “The goal I want to achieve with this is to take the most expensive and historic NFT, and show that if it is not protected, how can we guarantee that any NFT is safe from intentional malice, fraud, forgeries, theft, etc.?” Personne asks.
Some creators took a deliberate step back from NFTs this April. In late March, Takashi Murakami announced his intent to drop a series of smiling flower NFTs. Excited bidding quickly passed $200,000. During the auction on April 10th, Murakami formally walked back his plans. The artist decided to postpone the sale, citing a need to better understand NFTs and their implications.
Certain NFT drops stirred controversy over the last few weeks. Daystrom sponsored the auction of a 1986 Jean-Michel Basquiat drawing-turned-NFT. Closer inspection of the terms revealed that the winning bidder could choose to have the original artwork destroyed upon purchase, leaving only the digital version. Basquiat’s estate swooped in during the ensuing uproar to claim the drawing’s copyright. The NFT has since been withdrawn from the sale.
April 2021 – Unexpected NFTs
Some of the available NFTs this April carried a self-conscious twinge of irony. Saturday Night Live produced a skit questioning what, exactly, NFTs were before listing part of the sketch as an NFT on OpenSea. Collector @Dr_Dumpling bought the “What the hell’s an NFT?” NFT for 171.99 WETH (approximately USD 468,060). Proceeds benefited the Stop AAPI Hate reporting center.
Thanks to American faucet and fixture brand Moen, it is now possible to metaphorically own a piece of the ocean. The brand minted five NFTs that depict various trash gyres located around the globe. The brand hopes that a sense of ownership will encourage better care for the planet and reduced plastic waste. Proceeds from the sale benefited 5 Gyres, an education and advocacy nonprofit. Moen claims to have taken steps to produce carbon-neutral NFTs. However, the sustainably-minded works stand in contrast to cryptocurrency’s negative environmental impact.
Every month, Auction Daily covers the latest news from the art and auction industries. Check out our April 2021 headlines from around the auction world.