Zachary Small

@zacharyhsmall

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My hope is that we are entering a new era. Major artists in the scene have been quiet over the last 1.5 years — I hope that means they've been working on new projects that will blow us away. I think it has been a time of reflection and we will see artists like Beeple and Refik Anadol attempt to make a comeback into the public eye, which will require them to also speak about the market. But one major challenge is going to be amassing a collector base that sticks around through thick and thin — it's already hard in the trad art world! But that is what makes an art movement survive.

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Hello! I texted some investors this question for you. One said that it is a liquidity problem; NFTs are not being traded at high enough frequencies to justify them buying more. Another said it was a trauma problem; they were burned by NFT rug pulls last cycle and would prefer to invest in memecoins, where they have no illusions of greatness. There is no such thing as equilibrium in the art market, so I wouldn't expect to find one in digital art — but great artists find ways to defy expectations and gather interest. And I think crypto art should look for artists who reflect their values and engage with crypto in new/surprising ways.

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Great question! The first thing to know is that books take a long process and the production side of things after writing takes at least a year for major publishers. So there were probably ~24 people who read the book at different points in the process — all with varying levels of knowledge about the topic. And then the major subjects of the book had a fact-checking process toward the end where I got their feedback, as well. I actually love opinions — I don't feel like they are distracting. But what I'm pursuing in this book are facts. Those don't really change, but certainly the context around certain decisions and deals would evolve.

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Yup — the Amazon link is here: https://www.amazon.com/gp/product/0593536754?tag=randohouseinc7986-20

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I would say that blockchain data sites like Etherscan or Dune were great *initial* tools for my reporting. But I'm always skeptical of these tools, which can show more favorable or pessimistic outcomes depending on how the data is selected. That's why I spoke to experts at companies like Chainalysis and TRM Labs, but also direct sources in the market who were buying/selling. I certainly learned that skepticism from the traditional art world. You can look at an auction and it says "$1 billion in sales, 97% of lots sold" but then you realize half the lots had guarantees and the low estimate was actually $1.3 billion. Suddenly you see a different story!

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I think it's a matter of timing and audience. Open editions have not historically worked to create a long-term business model for artists. Ask photographers, it's been a nightmare. And I'm not sure that it's been successful with digital artists. PFPs definitely had some success here, but it's become exceedingly difficult to break through the noise with a new project there. So for an artist, I think 1:1 limited editions are a more viable strategy. Scarcity remains a huge appeal to trad collectors — to the point where gallerists sometimes beg their artists to STOP making work so it doesn't dilute the value of their markets.

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You could probably tell me, no?! I think the market is difficult right now — I would try to learn from the mistakes and successes of other projects. Who overpromised? Who overdelivered? A project like Bright Moments, which is detailed in the book, set a really clear path and timeline. And I think the members (who are reading this and can correct me) also thought long-term about their project. It wasn't just about what would happen next week or next month, but what might come from this community in a few years. The art world is ultimately very small and based on social relationships. I think the same goes for token-based projects. And of course it helps to have some killer art!

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Ha! I need to keep those in my sequel 😉

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Oh, I think the craziest example was undoubtedly what happened at Sotheby's with their failed CryptoPunks auction. It was perhaps the best chance that NFTs had to become part of the mainstream art world — there were a handful of influential, traditional collectors in the audience. But the collapse of the $30M sale with an anonymous seller claiming he did it on purpose, using the auction house's valuation as a base line for a a crypto loan, killed the possibility for the time being. You could actually read an excerpt about this, which ran in The New York Times: https://www.nytimes.com/2024/05/18/business/sothebys-crypto-nfts-auction.html

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If you asked 2 years ago, I might have said the government. That situation seems to have changed as more mainstream banking institutions get behind crypto and find ways of making on-chain services palatable to regulators. But will the diehard degens accept this kind of help from the gatekeeping institutions that they wanted to overturn? I think the larger DeFi industry has attempted a rebrand over the last year to regain the trust of average retail investors who got burned. So they will need to win that cultural battle *and* create more on-chain products and services that have clear use cases with easy adoption.

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Everyone has strong opinions on crypto/NFTs. But these debates are often so abstract and philosophical — I thought using my investigative reporting skills could provide some factual clarity in an industry that's changing the world. But I was also impressed by how many young people were involved. I was just entering my 30s when I started writing the book, and I could relate to crypto investors and their frustrations with the mainstream economy. And then I had this weird background in the art world that had made me something of an expert on economic speculation and volatility. The weird chips all lined up!

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Let’s get this going!

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So excited to dig into this book with everyone and share what I found!

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The team at Knopf have generously agreed to sponsor a giveaway of Token Supremacy by @zacharyhsmall I first spoke w Zachary in 2022 when the market was melting down after its exuberant highs. This book pulls together a narrative of the people & projects that are navigating this new frontier. Recommend.

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Very excited to dive into what I found in the onchain art world with @phil, and answer some questions about that sticky relationship between art, tech, and money.

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