Recently Christie’s auction house held their fifth annual Art & Tech Summit focused on Web 3.0. From the auction house that brought you Beeple’s groundbreaking sale, the summit brought together thought leaders from the technology, cryptocurrency, NFT, art, and e-commerce industries. Audrey Ou, Co-Founder of TRLab, summed up the conference with a John Lasseter, the former Chief Creative Officer at Pixar and Disney, quote, “Art challenges technology, and technology inspires art.” Pixar is famous for using their storytelling prowess to push the boundaries of computer graphics and has established its own research facility.
Most of the attendees at the conference are bullish on crypto, NFTs, and digital art. “Quality rises to the top,” as Adam Lindemann, Principal of Venus Over Manhattan, reflected at the conference in regards to the longevity of NFTs and digital art. These technologies help to anchor Web 3.0. While Web 3.0 is still loosely defined, there are many elements that artists and creators want to address, most of which are from the visual art world.
Visual artists are one of the few art forms where the creator does not get a residual payment. Musicians work through ASCAP, BMI, SESAC, actors are paid through SAG/AFTRA, authors and writers are paid royalties via WGA, yet there is no governing body for visual artists royalties. Thus many artists detest flippers and other sellers that have bought their work for a low price only to see it being flipped at auction or privately with them receiving nothing for the value created.
NFTs can address this issue with their smart contract. Each transaction is recorded on the blockchain and the smart contract lets all parties know what the royalty rate is. All parties are incentivized in the same manner so in theory an artist should not necessarily care if the work is flipped (although this is a purely economic way to look at it; there are other reasons why artists don’t want their work flipped, but that’s beyond the scope of this post).
Web 3.0 creators in theory should be able to seamlessly receive payments for their work whether an article, a video, a photo, or an essay each time it is viewed or consumed. While micropayments for the end user, a viral article could net the creator significant sums.
As in the physical art world, collectors buy art for a multitude of reasons: investment, enjoyment, patronage, or a combination of these. In Web 3.0, NFTs can make ownership a reality for the same reasons. Only this time, you are able to buy significant milestones in one’s career, historic moments in history, or an article or work of art.
Creators should benefit from the possible increase in the value based on their royalties smart contract, so now incentives are all aligned for both the creator and the buyers and sellers. Also, this gives buyers a reason to speculate on younger non established creators while giving them the lifeline to continue to create.
Decentralized Autonomous Organization
DAO’s are organizations that come together with a goal in mind. Everyone is incentivized to make the DAO a success because each participant has a stake in the upside. To some, a DAO looks like a publicly traded company where each employee might be paid or incentivized by stock options. However, unlike a public company, the DAO is for a particular project. For example, if you worked at Apple on the iWatch product, you should get “shares” based on the performance of the iWatch, not of the entire company.
Thus, we know the big art factories starting from Andy Warhol to Takashi Murakami to Damien Hirst but unfortunately none of the artists actually doing the painting are being paid beyond cash. A DAO is a way to close the wealth inequities and help those benefit from ownership. In Web 3.0, all of the people that worked on a piece of content from researchers to make up artists can get a piece of the DAO and benefit.
What do you think of this framework? Are you a creator trying to figure out the metaverse or Web 3.0? Drop us a note and let us know what you are working on!