Until recently, the digital art market was very restricted. Either the artist had to be very well known, or he would earn income from freelance (and often copied) works. But with non-fungible tokens (NFTs), this perspective has changed. Today, the more an artistic work is copied and replicated, the more it becomes known, which increases the value of the original production and the other pieces by the same author.
“Today it is still possible for anyone to copy a .png file, but it will only be a copy. The more that file is copied and reproduced, the more valuable the original work becomes. For example, anyone can buy a print of the Mona Lisa, but it will never value the original work. And the more people get to know the original work, the greater its value will be”, said digital artist Fesq, who participated in ABFintechs, discussing the topic alongside specialist and blockchain developer Solange Gueiros.
NFTs are smart contracts that guarantee authenticity
According to Solange, to better understand this concept, you must understand the difference between fungible and non-fungible. “A fungible token can be exchanged for another token of the same value. For example, two US$ 100 bills have the same value, as do two bitcoins. The non-fungible token, on the other hand, cannot be replaced; it is something unique that cannot be exchanged for another identical item because there is no such equal”, he explained.
From there comes the designation of the NFT (non-fungible token). “An NFT is a smart contract with certain characteristics programmed in blockchain, which once published can no longer be changed. Thus it becomes unique”, he added.
This is why they have been used in various segments, whether to represent physical items or not (especially in the case of games and metaverse applications). In the art market, NFTs are a way to register authorial production. “This brought more value to our work”, said Fesq, who recently signed a partnership with Nissan to produce works in exclusive NFTs for each of the units sold of the new Nissan Kicks Xplay, a car model that will have a limited edition.
Smart contracts guarantee rules for each NFT
For Solange, one of the great advantages of using NFTs to sell artwork is the possibility of programming certain features of smart contracts in blockchain. “The artist can, for example, stipulate that he will be commissioned each time the artwork is resold”, she suggested. In practice, this means that if the work appreciates in value and in the future is sold again (for a higher value), the copyright is guaranteed.
“The possibilities are endless”, Solange said. “It is possible to stipulate that the work cannot be resold for a certain period, create remuneration for the artists in case of resale or exhibition, and even link the NFT to real products”, she said. According to the expert, crypto market events use NFTs to distribute giveaways, pay for meals and even tickets.
“At a recent event, attendees received NFTs to pay for meals at partner food trucks. This attested not only to the usability but also served for the organization to identify which vendors were most in-demand and to account for what was consumed, resulting in data that demonstrated the preferences of the target audience and allowed to pass it over to service providers in a single transaction”, he exemplified. Other uses cited were tickets for participation and exchange for physical giveaways.
“Besides such actions, NFTs provide other opportunities. For example, the event organizer can create post-event campaigns or even actions directed to token holders, further enhancing its brand and strategy”, recalled Fesq.
The participants cited some recent cases of NFTs, such as the NFT Replicator, developed by artist Mad Dog Jones, which duplicates itself every 21 days. “The buyer will practically have a passive income with the replication and resale of the NFTs”, said Fesq.
For Solange, the gaming market and metaverse applications will be the new catalysts for NFTs. “There is no metaverse without NFTs”, she said.
However, most of the tokens are developed in Ethereum. “When the network is congested, gas costs tend to be higher because people want fast transactions”, he pointed out, mentioning that for this reason, many artists are moving on to developing NFTs on other networks. “On Solana, collectibles had greater appeal, as did games, while art went more to Tezus”, Fesq said.