David Cash: Hello, everybody. Welcome back to NFTS.WTF, my name’s David Cash, your editor-in-chief, and we’re here live at NFC Lisbon. It’s been a great week and now we’re wrapping up our time here. But before we ended, we had to chat with Colleen Cash, potentially a long-lost relative of mine, who knows? But definitely one of the people leading things at Artnet and doing some amazing things in the NFT space and the traditional art space, helping bridge that gap. Thanks so much for taking the time here. Do you want to give people just a little bit of an idea of your background and why you’re at this NFC conference right now?

Colleen Cash: Thank you, David. So I come from the traditional brick-and-mortar auction space. I used to work at Christie’s. I joined Artnet in 2018 specifically to enter the online game, having no real idea that we would be in this universe, metaverse, whatever. So we do about $30 million a year in traditional fine art across prints, multiples, photographs and contemporary art. And we launched our fully on-chain crypto native NFT marketplace in December 2021.

 

DC: Ah, Congrats!

 

CC: Thank you. One is sort of looking at super OG historical NFTs, one with a deep dive into rare Pepes. It’s been an amazing experience. We are really just trying. I mean, everyone says we’re a bridge, but we really are. And our debt is in a unique position to provide context, whether it’s data or news or even just the opportunity to transact for those that otherwise might not be engaging with space.

 

DC: 100% There are so many things I want to dive into, but I think one thing that’s worth mentioning is, you know, our audience, is very crypto savvy, a lot of collectors. And when you look at the recent history of art Artnet and sites such as Artnet were really the secondary market for a long time, at least the online secondary market pretty much entirely for the last couple of decades and now in NFT space. I think this is something that’s already quite native to Artnet and your team. But how is that transition been and what was the moment that you collectively made that jump into, “Okay, we should actually start tokenizing this digital art.”

 

CC: Absolutely. So our Artnet is a 33-year-old company founded in 1989 with the Artnet price database. That’s sort of the core Premier product and it was a tough goal back then to convince people that we wanted transparency in the market. We wanted to know what things were trading for. So in a lot of ways, the blockchain, the main net, and the transparency spoke very much to our DNA. And we said it makes a lot of sense that we would be engaging in this both from a context perspective and from a data perspective. So now we’re putting NFTs on the price database. Creators, I think, have really found that meaningful because all of a sudden their auction records are alongside Picassos and Warhols and all of the greatest traditional artists. So what we’ve done is we’re being bold in expanding sort of the canon of art history to include NFT artists and creators. And likewise, as someone who works in the secondary market, I usually work with dead artists. So all of a sudden to be able to work with creators and realize their process, their project, sort of the creator as a market maker. Now, where before you had external people controlling the spigot of their market.

 

DC: It’s no longer an AMM, it’s like a manual market maker. I don’t know.

 

CC: Exactly.

 

DC: Amazing. I’m really excited to see how you continue to progress in this space, especially through Artnet. And also I feel like there’s a two-prong kind of approach. And correct me if I’m wrong, but I’d love to hear your thoughts on this. There are onboarding artists into the NFT space. In your case, I’m sure many of them are already at least digitally conscious, if not digitally native. But then at the same time, what I’m really excited about, that you mentioned, is bringing the NFT crowd into the traditional art collector market and the fact that you’re championing Rare Pepes and OG NFT artists right off the bat. I think it’s super cool. So I’d love to hear how you pitched that to Artnet and what their first thoughts were when you were like, Rare Pepes, let’s go.

 

CC: It’s so funny. My first strategy with NFTs was to wait, right? January 2021. In spring 2021, everyone was getting involved–

 

DC: And really rushed.

 

CC: Rushed and not authentic. So I said until we can have an Onchain platform that’s in ETH that speaks to the community, I don’t want to do it because it wasn’t real.

 

DC: Thank you.

 

CC: Thank you for embracing us. Because we were honest and we went to the market to some real thought leaders and Mavericks, and we said, we know nothing in a very honest way. And we said, teach us, what should we do? What advice can you give? What would you like? What would be meaningful? Because we realize our position as a curated platform is in some ways understandably antithetical to DeFi, right? Why do we exist? We have fee structures. We’re gatekeepers. Yes. But we’re also context providers. And that’s what’s so interesting. So when we’re working with artists who are getting into the NFC space, or likewise people in the crypto world, coming into the traditional space, we have to remember this is a period of transformative wealth, unlike anything we’ve ever seen before. Crypto billionaires have homes, too. They have big walls to fill in. And sure, put up an NFT on one wall. But why not engage in another way?

 

DC: You might want to Damian Hearst or a Worhall or something.

 

CC: Yeah, right. So for our Rare Pepes sale, we did something interesting where we had a brand new fake rare made exclusively for the sale. And we actually sold the original canvas as well. So we’re putting the two together and say, look at the conversation they have one begets the other.

 

CC: You said gatekeeper. But honestly, I don’t think it’s quite there for Artnet, at least, because I think that Artnet was also one of those places where, as you said, the secondary market artists could upload their own work. Is it a featured collection? Is it one of your curated drops? Not necessarily, but the egalitarian aspect that people can enter on their own. I feel like it’s already very native and true to this space.

 

CC: Absolutely. And to art that, I mean, really, our founders’ vision was to democratize the art world. He saw the high barriers to entry at Christie’s and Sotheby’s.

 

DC: I mean, I mentioned it a lot, but the fact that we use Botalaire 1800s reference points in our commerce today.

 

CC: Exactly, we’ve been disrupting, and everyone’s a disruptor, especially in the crypto world. But truly, in a previous time, you can only buy a print or a multiple, two times a year at a big house. We have them 24/7. So we’ve always been engaged in this idea of creating access, creating liquidity, and creating opportunity for artists, creators, collectors, and the trade alike.

 

DC: Super exciting. So what’s next, from your perspective? Are you really trying to push artists forward? Are you trying to bring more people onto the platform? Are you developing a new collector base? What’s kind of your like, I don’t want to say KPI, because we’re not going to be so corporate here. But what’s your vision right now as far as your goal in the space?

 

CC: Absolutely. It’s a good question. I am being open to the space, right. I’m really trying to engage in an open conversation. So I don’t know what our next sale will be, but I can tell you that conversion is really important to us. We want to help people get into the water. The water is fine. You just have to get comfortable with these operational ideas. Things like fiat onramps help and custodial wallets help. But really, we want to leverage the power of Artnet and sort of the gulf stream of eyeballs and context we have to help people jump into the pool because the water is pretty fun.

 

DC: That’s beautiful. The last thing I want to leave with, we talk a lot about contextualization. We talk about adding value to artists in the process. But I feel like really the value is coming for the collector. If you can take a process that’s really antiquated and very difficult and simplify that for somebody, build it and they will come. And I feel like that’s really what’s happening. So I love the fact that you’re stepping back and listening as your first response to the space, but even more so, I really love that. Now once you’ve already had a couple of successful collections, you’re still open and you’re still looking and you’re still looking forward because a lot of people, especially now they’ve gotten into the NFT space and they’re kind of like, okay, we did NFTs and now we have NFTs exactly. But the spaces. I talk about hypermodernity and the fact that we’re evolving so rapidly and everything changes every day. So I’m really excited to hear that that’s your perspective and I can’t wait to see what you keep doing.

 

CC: Constant evolution. That’s the name of the game. Look at how far the industry has come in 16 months. Who knows what the next 16 months will bring but excited to be in it together with you, David.

 

DC: Amazing just for anybody who is new to you and all the work you do. Work and they find you and Artnet’s NFT drops.

 

CC: You can find me at Colleen Cash on Twitter or you can find me at Artnet.com/auctions.

 

DC: Beautiful. Thank you so much for taking the time. Such a pleasure. We’re here at NFC Lisbon. Thank you so much for watching. This is NFTS.WTF, my name is David cash. Thank you again.

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Imagine accidentally selling an NFT worth over $1 million for only $26. That is precisely what has happened to Timothy McKimmy, who owned Bored Ape #3475 from OpenSea’s Bored Ape Yacht Club NFT collection.

 

Because of this, he is now suing OpenSea—whose legal identity is Ozone Networks—claiming they knew of a glitch that made the sale possible. So what does this mean for NFT buyers and sellers? Let’s take a look.

 

About the OpenSea Lawsuit

 

The claim being made by McKimmy is that OpenSea knew of a bug that allows people to purchase NFTs when they’re unlisted on their platform. De-listing an NFT from OpenSea’s platform with their “transfer” feature doesn’t necessarily remove listings on the blockchain’s back end, making it possible for hackers to purchase tokens for far less than their floor price.

 

Previous Victims

Others have fallen victim to this glitch already, and OpenSea has since added a feature that allows users to see their current listings, including those they may have believed were cancelled. From there, users can fully de-list their NFTs by paying Ethereum gas fees. However, those who have already fallen victim to the bug aren’t at all helped by this.

 

The Damages

McKimmy is demanding that OpenSea either return his Bored Ape NFT—which was shortly after resold for 99 ETH (about a quarter of a million dollars)—or pay him damages of over $1 million. He claims the Ape was worth $1.3 million, comparing it to one of lower rarity bought by Justin Bieber for a similar price.

 

Negligence Charges

McKimmy claims that OpenSea was negligent in that they knew about the vulnerabilities in their code but did nothing to fix it. Instead, they continued sales on their platform rather than pausing to rectify the problem despite knowing this.

 

 

Does McKimmy Have a Case?

 

The claims made do seem to have some weight. It’s true that OpenSea had been in communication with other victims of their platform’s exploit and had even made some settlements (though for less than the tokens in question may have been worth at the time), so it seems reasonable to believe that they were aware of the exploit and had done little to repair it.

 

On the other hand, OpenSea did recently add their “Listings” feature, allowing users to see their current listings, including those that they might have previously believed to have been de-listed. This may prevent future incidents but does not satisfy the damages against McKimmy and others in similar circumstances.

 

There seems to be a good chance that McKimmy’s negligence charges could secure a reward from OpenSea, even if his lawsuit, as it currently stands, has some errors (such as naming OpenSea as defendant instead of Ozone Networks, listing the incorrect address, etc.).

 

 

Lessons and Preventive Measures for NFT Holders

In terms of lessons that can be learned from this case, here are a few preventive measures NFT holders can put into place:

 

1. Know the Platform

It’s generally best to deal with platforms that already have a solid reputation in place. OpenSea has been at the center of multiple controversies in addition to this lawsuit, and that should be a warning to buyers to proceed with caution.

 

2. Keep an Eye on Listings

Just because you use a platform’s tool to de-list something doesn’t mean it’s completely gone. Rarible provides a tool where you can check on all current and previous listings, as does OpenSea with its new “Listings” tab, so it’s easy to keep an eye on what’s actually on the market. You may have to pay a fee to completely de-list your token, but that’s a small price compared to the value of a highly appreciated NFT.

 

3. Get Your Legal Stuff Right

The errors in McKimmy’s lawsuit may not altogether avert his efforts to recover damages, but they can still be an obstacle. Make sure you know which company you’re dealing with (not just the first name that pops up on their platform) and the jurisdiction in which they operate. Having some legal help on your side isn’t a bad idea either.

 

 

Lessons and Preventive Measures for NFT Sellers

 

There are some lessons to be gleaned for sellers as well. Even if you don’t lose a lawsuit, it’s still expensive to resolve it, making the following preventive measures invaluable.

 

1. Know Your Customer

While many value blockchain technology for its potential to protect anonymity, it’s still a good idea to know your customers. Doing so can help you avoid dealing with hackers and keep you more secure against liabilities that might result from exploits or illicit activity.

 

2. Review Your Code

To further shield yourself and your users against exploits, it can be worthwhile to review your code and platform activity every so often. Doing so can reveal potential bugs that could open you up to liability. If you find anything, correct it quickly. It may mean taking your system down, but expensive lawsuits can be far more costly.

 

3. Give Users Visibility

One of the issues with OpenSea appears to be the fact that users didn’t have much visibility over their listings. They used the platform’s “transfer” feature, believing that it would completely de-list their tokens when it, in fact, did not. If they had had more visibility, these errors might not have occurred (or at least wouldn’t have been OpenSea’s responsibility). As such, it’s worthwhile to implement functionality that gives your users plenty of visibility over their assets.

 

The Takeaway

 

It will be interesting to see what happens over the course of this lawsuit. The nature of blockchain technology and the various forces at work, in this case, could present some unique challenges when it comes to presenting the case to a jury, and the courtroom proceedings that follow could well shape the case law for future NFT-related suits. But, for now, it’s advisable to play things on the safe side.

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Kevin McCoy’s “Quantum” Claimed the High Note for Crypto Artists

Sotheby’s concluded its Natively Digital NFT sale with a record-breaking price for a single CryptoPunk. Though the CryptoPunk’s $11.754 million final bid is already dominating the headlines, twenty-seven additional works were on offer with final bids ranging from a high of $1.472 million for Kevin McCoy’s “Quantum” to a still impressive low of $9,450 for LaJuné McMillian’s “Self-Portrait 2”. Responses on Twitter from the crypto art community ranged widely from celebrations of success to expressions of concern that women, transgender individuals, and artists of color ended up with much lower priced sales.

Sotheby’s Natively Digital: A Curated NFT Sale took place online between June 3rd and June 10th with final bids coming in at 10:45 pm EDT on Thursday evening. Sotheby’s used Samsung displays for physical showings in New York, London, and Hong Kong which made for a nice look. Sotheby’s also opened an outpost in Decentraland which was intended to support both the Natively Digital sale as well as future efforts in the space.

The physical displays of NFTs were well-received in contrast to the initial response by Gmoney, later retracted, to the CryptoPunks displayed physically at an earlier Christie’s auction. However, Santiago Iꜩcoatl did raise a legitimate concern:

 

The attention grabbing sale of CryptoPunk 7523, in addition to leading mainstream media coverage, is being taken up by the NFT and crypto art communities on Twitter as a counterpoint to recent media speculation that NFTs are dead. For more on the CryptoPunk sale, see “NFTs are Dead” here at NFTS WTF.

The overall successful auctions of 27 additional pieces, most by individual crypto artists,  did serve as vindication for many. For example, Brendan Dawes, whose work “The Pandora Variations” sold for $52,920, shouted out the naysayers as he thanked his supporters:

 

There was also a strong celebratory response to Sarah Zucker’s sale of “Self Transcending” for $22,680 – with many likes and congratulatory comments. Yet it must be noted that for an early piece by a well-known and historically significant crypto artist, the final sale price seems low by contrast to other such works.

As Carlos Marcial noted:

An even stronger and broader critique came from Black Dave:

He went on to share a thread that dug deeper into his concerns regarding the final sales prices of “Black women, female-identifying & non-binary artists.”

The fact that the community is discussing a broader range of identities than one typically encounters at a Sotheby’s auction is testament to the co-curation of Robert Alice and Sotheby’s associates. However, l’arc-en-ciel pointed out the lost opportunity to include an additional woman artist through the community recommendation process:

Given the historical importance of this auction for the NFT and crypto art communities, it would be well worth a researcher’s time to take a closer look at the artists based on identity, sales history, media coverage, and final prices. It would also be worth asking collectors why they chose to purchase specific pieces and what went into decisions about how much to spend. 

Hopefully such research could provide additional insights to support current and future efforts to create a more diverse and equitable crypto art ecosystem. For now, Sotheby’s Natively Digital sale marks an important moment for crypto art, while raising questions about how far the community has come to date.

 

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A new world record sale for a CryptoPunk recently took place at Sotheby’s Natively Digital auction that ran from June 3 -10th 2021.  

This ultra rare 1 of 9 alien CryptoPunk #7523 was won by Shalom Meckenzie, the largest shareholder of sports-betting outfit @DraftKings, and went for a whopping $11.75 Million dollars.

This CryptoPunk was first minted on June 23rd 2017 by Larva Labs and is 1 of only 10,000 original CryptoPunks in existence.  CryptoPunks became the genesis NFT collection, and thereby poster-child  of the Ethereum blockchain, and has inspired the ERC-721 token standard that is the underlying technology that powers today’s digital collectibles. 

While technically only 24 x 24 pixels in size with a very simple 8-bit style, there are no two punks that are the same, much like the owners of these rare and valuable NFTs. 

CryptoPunks have come to symbolize the very early days of the blockchain space and embody the energy and spirit of challenging the status quo; at the intersection of what is considered art, technology, and traditional methods of collecting and appreciating art.

 

NFTs enable a whole new model for ownership of art and collectibles, and this Sotheby’s auction proves this to the world yet again – on the heels of mainstream media sources claiming the NFTs were dead no less. 

You may have seen CryptoPunks used as avatars all over twitter and anywhere you can add a profile image. The incredibly passionate community that has formed around CryptoPunks has seen members identify with their CryptoPunk NFTs so much that they use them as  consistent digital representations of themselves. 

Collecting art has largely been reserved for private spaces like the home or some other type of gallery and is a way that collectors can show their appreciation of culture and how they fit within their world.  With the advent of digital collectibles like the CryptoPunks, collectors can now digitally flex who they are, and their place in the Crypto ecosystem. As owners of one of the pioneering technologies that, in my opinion, will lead to the mass adoption of blockchain technology – using what we now know as non-fungible tokens. 

This $11.75 Million dollar sale not only solidifies the value of the CryptoPunks project as a whole, it further legitimizes the innovation that NFTs bring to the world.  This historic moment is not limited to art alone, as many who look from the outside at this 24 x 24 pixel CryptoPunk still miss the bigger picture behind what this technology truly means. 

Digital ownership, transferability of assets, authentication and access. From this minimalistic piece of Crypto history, will spring a wealth of innovations that will touch nearly every sector of our lives. Most people will never have any knowledge or idea that non-fungible tokens have anything to do with the infrastructure behind the services, technologies, applications, and experiences they will be using in the not too distant future. CryptoPunks, in many ways, will be the genesis of a new digital paradigm, regardless of their value, measured by monetary means.

I had the chance to ask SillyTuna the owner of CryptoPunk #7523 that sold at the Sotheby’s auction, what was next for him? he responded with “Focus on my own projects (games, nft’s), do some donations later this year, and think about how to deal with the Mccoy artwork.” which just made me smile, as I personally love to see good humans, win in this space and  witness the awesome things they go on to do.

Congrats again to SillyTuna and the whole CryptoPunk community on this incredible sale, as we see more evidence that NFTs are not in fact mortal and can not be “dead” for very long.

 

SillyTuna

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Sotheby’s, is one of the world’s oldest and most trusted auction houses for art. Established in 1744, the Sotheby brand has a long standing reputation within the physical art world, and are now turning their attention to the rapidly growing digital art scene. For many in the crypto art world of non-fungible tokens, there is a mixed sense that these large legacy art establishments are at odds with the new NFT renaissance.  The technology that underpins non-fungible tokens, removes the need for trusted third parties, like auction houses to facilitate the sale of digital art.

With Christie’s recent Cryptopunk NFT auction going for over $16.9 million dollars and Beeple’s $69 million auction Sotheby’s is throwing their hat into the digital NFT ring, despite the criticisms that crypto twitter has lobbied at Christies and how they handled the latest NFT auction.

Sotheby’s is attempting to bridge the gap between the old world and the new one, in a way that is inclusive of the NFT community.

 

How NFT artists can participate

From now until May 20th 2021 at 12:00 pm ET they are accepting nominations from the community for inclusion into the Natively Digital Online Auction.  This curated NFT sale will take place from June 3-10 2021 as an online auction.

 

The official twitter post and rules can be seen here below.

The collection of artists already being showcased includes some of the earliest NFTs that predate even the Ethereum blockchain, alongside newer works that demonstrate the more advanced technical innovations enabled by NFTs.

Robert Alice, a London based artist and trailblazer in the crypto art and NFT space is co-curating this collection along with other partners spanning the art and technology ecosystem.

Sotheby's Natively Digital: To the Young Artists of Cyberspace by Robert Alice x Alethea AI
To the Young Artists of Cyberspace by Robert Alice x Alethea AI

 

Some notable partners in this collection include the non profit Sevens Foundation, which is dedicated to elevating artists. 

The Mint Foundation, which helps international creators mint their first digital art NFTs and has already had over 33 Ether donated to provide gas fees for artists. 

The Regen Network that is working to align economics with ecology, to reverse climate change.

 

Who are the artist? 

The lots will include Larva Labs Cryptopunk 7523, works from Kevin Mccoy, Rhea Myers, Art blocks, Pak, Robert Alice, Ryoji Ikeda, Simon Denny, Anna Ridler, Mario Kingemann, LaJune McMillan, Sarah Zucker, Lethabo Huma, Serwah Attafuah, FVCKRENDER, Oseanworld, Xcopy, Mad Dog Jones, Ikaro Cavalcante, Brendan Dawes, Casey Reas, Sara Ludy, Addie Wagenknecht, Terrao, Matt Kane, Don Diablo and several others to be announced soon. 

If you are reading this before May 20th 2021, then you too, could possibly be included.

Be sure to check out the official rules posted on Twitter that are embedded at the top of this article.

Looking to the Future

Needless to say there are some very well known names and prolific creators taking part in this Digital Native NFT Sotheby’s collection. It will be exciting to see who else from the community gets nominated to join, as there is already a flurry of  interesting names being mentioned all over Twitter.

Taking into account the current volatility of the crypto markets, time will tell how well Sotheby’s will execute this online auction in terms of total sales. The real aspect to watch is, how well the old art establishment can build this new digital bridge into the NFT and crypto art world. Soethebys will be sure to draw mainstream media attention and lend additional credibility to digital art and NFTs in general, for the physical art collector community. 

Sotheby’s CEO, Charles Stewart was asked about the future of the art market and non-fungible token technology stating “This potentially has implications for physical art as well as digital art.”  Many in the NFT and blockchain community have been saying this for years now, and it must feel like validation for the pioneers who have been blazing the non-fungible trail. 

Sotheby’s NFT auction, will inevitably lead to further mainstream adoption and growth for this rapidly evolving and promising technology. 

Sotheby's Natively Digital : Shift by Fvckrender
Shift by Fvckrender

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