Tracing the last 365 days of NFTs

Love them or hate them, there’s no denying 2021 was the year of the NFT.

Its ascent as a new form of artistic expression started 365 days ago, on 11^th March 2021, when an otherwise unassuming artist named Beeple sold his artwork ​“Everydays: the First 5000 Days” through Christie’s. The piece was a culmination of his varied, occasionally offensive artwork that he made daily for – you guessed it – 5,000 days. That’s 13-and-a-half years.

Unlike the auction house’s historic sales, this was trailblazing. ​“Everydays: the First 5000 Days” was an NFT: a non-fungible token. That’s essentially a multimedia file and a smart contract stored on the blockchain and exhibited on the internet. It sold for $69.3m. On an episode of the David Zwirner podcast, Dialogues, speaking with the gallerist’s son, host Lucas Zwirner alongside controversial artist Jordan Wolfson, Beeple (real name Mike Winkelmann) described how his life had changed after making this gargantuan amount of money. This included an around-the-clock armed security guard he’d hired in the wake of the sale as he waited to move out of his old neighbourhood, worried about thieves while the originals from ​“Everydays: the first 5000 Days” were still in his house.

But it wasn’t just Beeple whose life was overhauled. The ripple from the sale formed a tidal wave that surged globally, and no industry went untouched. By the end of 2021, ​“NFT” was Collins Dictionary’s Word of the Year (other dictionaries chose ​“double vaxxed” and ​“climate anxiety”).

Christie’s rival Sotheby’s announced its most significant sales year ever, attributing $100 million of its eye-watering $700 million profits to NFTs. Overnight, profile pictures and avatars morphed from smiling selfies into Cryptopunks, adopted as the unofficial badge of allegiance to all things blockchain. Influencer GMoney took this further by wearing one as a mask at Prada’s FW22 show in Milan.

These are phenomenal feats for an acronym that, just 366 days ago, meant diddly squat to most people. So, if you found yourself overwhelmed and falling behind on all things NFTs (we don’t blame you), read on for a crash course on the happenings of the past 365 days of this divisive new technological medium. For many, NFTs came from nowhere and critics were quick to condemn them as a trend and a cash grab – many neglecting that a community of artists and technologists had been building momentum in the space for several years.

These native NFT artists rallied and, unperturbed, strengthened community ties, invited friends into the space, and traded art and skills with each other – setting up pay-it-forward schemes and buying works as collectors rather than flippers. If you scratch beneath the surface, you’ll see a narrative being built away from the mainstream circus and news headlines.

For artist Jah Reynolds, who we spoke to last year, making NFTs has been life-changing. His work has been exhibited in New York, LA and at Miami’s prestigious Art Basel. He’s also formed a collective with his partner and housemates, Lytehaus, one of the highest-earning collectives making videos on the blockchain. To him, ​“NFTs are the seeds of a paradigm shift”, and if explored with good intentions – rather than seeking fast financial gain – the potential is endless. ​“I’ve seen artists use that technology to create expansive universes, thought-provoking art, access to information or immersive IRL experiences.”

Described by the Financial Times as a ​“breakout year” where digital collectables sales rivalled traditional art, the paper announced that NFTs had become a $40 billion market by the end of 2021. But many realised it wasn‘t the goldmine they’d bet on back in March.

Jason Bailey, founder of the online magazine Artnome, recently warned: ​“Don’t buy NFTs as a financial investment. They become less rare every day. Buy them because you love the art and you want to support the artists.”

Despite some epic sales seen on NFT marketplaces like Foundation, SuperRare and Zora by NFT native artists like Reynolds, Pak, IX Shells and Beeple, others struggled to replicate the same success. Amongst these was photographer Mario Testino, whose NFT editions of a photograph of Gisele Bündchen remain sitting on the digital shelf waiting to sell out almost a year later.

However, some blue-chip artists, including Damien Hirst, have made meaningful contributions. The still-hugely-collectable YBA artist’s first NFT project, The Currency, allowed buyers to purchase one of his hand-painted dot works on paper as an NFT for $2,000. The catch was that the buyer had one year to trade the NFT for the physical version if they wished, and if they didn’t, Hirst would burn it.

In August, Hirst’s gallery HENI attributed $25 million to The Currency in secondary market sales, with the lowest asking price still almost double its original asking fee. Hirst later rewarded The Currency holders by airdropping each of them one of the 10,000-edition collection inspired by the album art he made for Drake’s Certified Lover Boy, aptly titled Great Expectations – giving them the incentive to hold the NFT rather than trade it in case Hirst sends more freebies their way.

Fashion wasn’t far behind the art world. Gucci became a metaverse pioneer by selling its Virtual 25 sneakers in March 2021 for a modest $9 pop. Nike dropped its flag in the digital sand and acquired RTFKT, a digital design studio revered for its NFT sneakers that sell upwards of $100,000. Burberry launched its NFT drop on Blankos Block Party, a groundbreaking multiplayer party game.

Magazines experimented, too. Vogue Singapore tapped metaverse artist Chad Knight and digital fashion house The Fabricant, amongst others, to collaborate on digital covers released as NFTs on crypto marketplace OpenSea.

But it wasn’t all glory. Adidas stumbled on its first step and apologised to anyone ​“hurt by gas” after it paused its NFT release 20 minutes after launching, disrupting thousands of transactions and wasting gas fees and computing energy – all the while leaving buyers empty-handed. (Although it did eventually take USD 22m in sales.) Hermes, meanwhile, went to court with artist Mason Rothschild after he sold unauthorised NFT versions of its cult Birkin bags for up to six-figure sums.

The uncharted terrain of the metaverse needed a new roadmap, and brands realised that what works AFKB (away from keyboard) wasn’t necessarily going to fly here.

“You can’t and shouldn’t just release an NFT, as that gung-ho mechanism always flops,” advises Leanne Elliott Young and Cattytay, co-founders of the Institute of Digital Fashion, a 360 digital agency that creates web3 experiences. They notably dressed celebrities like Kristen McMenamy in AR garments sold as NFTs at the British Fashion Awards. ​“The best are collaborative, have utility, work with your audience – and importantly [with] your brand narratives.”

NFTs were also primed as revolutionary for music artist revenue streams and fan relationships. Those who saw the most benefits – as fashion and art experienced – were not afraid to experiment with the medium. Kings Of Leon were the first band to release an album as an NFT, which generated 820 ETH, or upwards of £2 million in sales.

Timbaland launched Ape-In Productions, which releases music and animation based on the viral characters from the NFT collection Bored Ape Yacht Club. Its first single came via virtual hip-hop group TheZoo. Whitney Houston’s estate sold a never-before-heard demo track that the late singer recorded at 17 as an edition of one. Even Snoop Dogg unmasked himself as a mega collector by the alias Cozomo de’ Medici. Young artists, like Latashá, were also turning to NFTs to sell their art, with the rapper telling Grow she was on track to be a millionaire.

But, naturally, things also got weird. An Armenian artist named Narine Arakelian auctioned a work titled Love, Hope, Live as an NFT and physical painting during Miami Art Basel in December 2021, with the bonus of one of her eggs, hoping that the buyer would conceive a child with it. The Fyre Festival cheese sandwich tweet that signalled the beginning of the end for the ill-fated event sold for an estimated $80,000 on Ja Rule’s platform, Flipkick, which the rapper himself reportedly gave the thumbs up.

Recently, the self-appointed #QueenOfTheMetaverse – that’s Paris Hilton – appeared on Jimmy Fallon​’s show to gush about the aforesaid Bored Ape Yacht Club, a set of simian avatars that also unlock access to its membership club. She then gifted everyone in the audience with her own NFT, a scrapbook-style image of photographs with her now-husband. Fallon also revealed he had a Bored Ape, joining the ranks of Post Malone, Steph Curry, Justin Bieber and a staggering amount of other celebs.

But there was one star whose stance on NFTs was made clear. Never one to mince his words, Ye posted a handwritten note on Instagram that stated his focus was on ​“building real things”, and pleaded: ​“Do not ask me to do a fucking NFT.” Although he did leave the door ajar by signing off: ​“Ask me later.”

Undoubtedly, NFTs’ first year in the spotlight has been far from plain sailing. Some have taken to it like ducks, while others have emerged with soggy socks.

But despite the ups and downs, the utopian promises of decentralisation, ownership and agency for those who come correct are still a major draw for people considering working with NFTs. Especially now they have proved not to be the pump-and-dump scheme sceptics thought. With Ethereum finally shifting from Proof-of-Work to Proof-of-Stake this summer, meaning less energy spent on each blockchain transaction, naysayers will have to find new issues to poke holes in.

The digital landscape another year from now is likely to be increasingly complex and exciting. Jah Reynolds is reluctant to predict where we might be in another 365 days’ time, but he’s enthusiastic. ​“It’s hard to say because this space moves so fast,” he ponders. ​“I didn’t think we’d be here in a year, so the sky is the ground. I’m just excited about what’s to come.”