I was never an art collector. What drives the psychology of someone who goes from zero to “all in” over the span of five months?
Over the first half of this year, I devoted substantially all of my liquid net worth to become one of the most active collectors of Art Blocks, having recently passed the $1m mark in gross purchases. It got to the point of becoming uncomfortable. With every big buy, I wanted another, falling deeper into an endless abyss of desire and longing. The collection kept growing like a beast spawning a head at each new turn, and nobody, including myself, could stop it.
With Fidenza 553, the darkness came calling. I spent the cost of Tesla on a “jpg” and couldn’t even tell my family about it. How could they even begin to understand…?
There have been times when despite my convictions, I’ve felt lost in the depths, and questioned whether I needed to check into ABA (Art Blocks Anonymous). In the last few months, I’ve often felt the need to reset, reminding myself that one can be max long conviction without being max long positioning.
And so, despite its haunting beauty and my long term bullishness, I sold Fidenza 553 for 125 eth, and several other pieces I cherished deeply: the Fidenza I minted for 99 eth, several Ringers between 7 and 15 eth, and three Eternal Pumps at 13, 55 and 90 eth. In retrospect, 100% of these sales were for prices far too low, but what they did for me psychologically more than made up for the financial opportunity cost. I had reset nearly my entire cost basis and the associated psychological burden, and could let my collection ride with zero selling pressure … indefinitely.
I want to share my journey over the last five months because I think my perspective is a unique one. Many of the large NFT collectors today are crypto OGs whose numeraire is BTC or ETH with a cost basis dating back to 2011-16. What seem like indiscriminate sums in USD terms to “normal folk” represents a tiny fraction of early adopters’ crypto holdings today. While this has been great for the NFT space in general, it has reinforced a perception that NFTs are a playground for the “crypto rich” that will ultimately carry minimal flowthrough relevance to mainstream culture or adoption.
As several of these early whales have become “NFT influencers”, they’ve established their own proto culture that has glorified “ape szn”, taking a “ngmi” (not going to make it) mentality towards anyone that questions their increasingly self-righteous memelord culture.
I am a big believer in the cultural value of memes and the TAM unlock created by the ability to “own” them. Entire collectives like PleasrDAO have been organized around this thesis, and just like the art market, there’s much to be said for an investment in the Top 0.01% of Internet Culture. In general though, I am not a fan of the counter-culture ethos that is seeping through the NFT space. As I wrote previously:
Herd behavior flows with the counter-culture crypto ethos, but the glorification of ape mentality has got to go. In outsourcing diligence to the crowd, you lose agency and the capacity for self-reflectivity, and delegate personal well-being to a house of cards.
There is much talk in profile pic cults of community and lasting shared interests and values, but what I’m looking for is what “community” will remain once the floor for your $50k avatar falls back to earth. We saw it with defi season in summer 2020, and we’ll see it again for the vast majority of avatar communities—the Discords of once vibrant dreamers shattered into idleness, disarray and, well, discord.
Many groups have gotten so caught up in propagating their own Ponzi narrative, that they’ve forgotten what the whole movement should be about to begin with: the artists. And in so doing, they’re going to burn a generation of collectors that could have been accumulating long term stakes in the real TAM unlock: the introduction of scarcity as a primitive to natively digital art.
To me, it’s quite clear that generative art will become (has become?) a force as important as impressionism was back in its day. As Jason Bailey wrote in Why Love Generative Art:
Every generation claims art is dead, questioning why it has no Michelangelos, no Picassos, only to have their grandchildren point out generations later that the geniuses were among us the whole time. We have a unique opportunity to embrace some of the most important artists of our generation while most of them are still living (and working).
If you want to understand what creative inspiration looks like, watch Jared Tarbell’s presentation at Generative Spaces. Reflect on what happens when you enable algorithms with previously limitless outputs to embed digital scarcity. Then add a seed of maternal intervention in the minting process, mixing in the gacha potential of winning the generative lottery, and the experience is unlike anything collectors have ever seen.
I have been watching the NFT space grow since 2018 and though I dabbled here and there in early projects like Crypto Kitties, I remember sitting at NFT.NYC in early 2019 thinking you couldn’t pay me to own a Cryptopunk. And while I dabbled in crypto on and off since 2015, I never had the discipline to hold any meaningful amount, wasting away any gains in short term trading pursuits that reaped a dreadful toll over the years. That’s not a mistake I’m going to make again.
After my Metamask was hacked on Jan. 5, I lost the few valuable NFTs I had, including Cryptokitty #111 which was mercilessly liquidated for $25k. It took a while before I could emotionally reconcile myself with collecting NFTs again.
Chromie Squiggles were the turning point for me. As I wrote in Seneca, Art Blocks and Sustainable Communities, I first heard of Art Blocks in the course of doing research on On-Chain Artwork NFTs. On February 26, I purchased Chromie Squiggle #999 at 0.99 eth. I was not sitting on any ETH from which to fund this purchase, so it was a big commitment at $1500. But with its bright, curvaceous, inspiring message of hope, I decided that I had to pull the trigger.
A few days later, on Feb. 28, I minted my first Art Blocks set: Archetypes, by Kjetil Golid. I had been attuned to the potential for gas wars given increasingly supply-constrained drops: at 0.2 eth per mint and 400 gwei for gas (0.1325 eth), it wasn’t cheap. Yet I found the minting process deeply satisfying. The aesthetic nature of a random seed mixing with carefully constructed code as art to produce a series of non-deterministic outputs in a quantity that the artist deems appropriate for the algo … to be able to capture a snapshot of that essence is the magic that anyone who has minted a piece on Art Blocks has experienced. Once you jump in, it’s hard to escape the attractive force of the pull.
And so naturally, I hungered for more. A few hours later, I saw a message from VonMises in the Art Blocks Discord saying he was open to private offers. My better half thought I was nuts for wanting to pay $5k for a piece of digital art, but she was the one who ultimately green lighted my first significant AB purchase: Singularity #362. I had no idea what I was doing and offered 2 eth for it, until VonMises kindly reminded me that the floor (the cheapest of any of the mints in a set) was 2.65 eth. We settled on 2.85 eth. Into the singularity I jumped….
Less than a week later, I realized I needed a Ringer. Dmitri Cherniak’s creation was widely recognized as the set that launched Art Blocks into mainstream public consciousness, with its incredible diversity of outputs off of a simple theme:
At 5 eth floors (relative to a mint cost at fractions of eth), I had initially reconciled myself with the thought that I “missed” Ringers and tried to focus my collecting efforts elsewhere. Yet I kept coming back to the thought of being Ringer-less for the rest of my life, and couldn’t accept it. I harked back to the thoughts of an options trader I knew at Goldman, who told me: whenever there is a big move, you don’t want to be part of that initial frenzy, you want the flexibility to analyze with a calm and collected mind and get on the bandwagon once the move has staying power. If it’s real, the local peaks and troughs won’t matter in the end. And so, within a week of my Singularity purchase, I bit the bullet and bought my first Ringer from VonMises at a cost of over $10k:
There, I thought I was done. But over the next week, a thought kept ringing in my head: “The Eternal Pump. Don't fight it. Just respect it.” Dmitri’s live script was entrancing, and there was little I could do to escape the pull. So there it was, a whopping $35k spent on #14. Don’t ask me how I got this through the fam.
The Pumps were the first set that I felt, as a new collector, I had an edge in evaluating. Most notably, although it was a Playground rather than Curated drop, the supply of the Pumps was only 50 rather than 1,000 like Ringers. Aesthetically, they were beautiful and incorporated live motion in a way Ringers didn’t. Yet, the floor of the Pumps was around 10 eth compared to 5 for Ringers, which made no sense to me. With the initial drop botted, “smart money” Art Blocks whales reconciled themselves with having missed the drop entirely, with enough proxy exposure to Dmitri via Ringers. In that narrative, I saw opportunity — the fact that a bot had accumulated such a large portion of the supply would allow me to acquire them at relatively cheap prices. Over time, the collection would shift to diamond hands; in the meanwhile, I would accumulate. So I decided I would focus my top-tier AB collecting efforts on the Pumps, I just needed another $50k somewhere….
On the afternoon of March 12, I saw a Tweet about some crazy rescue of a rediscovered NFT project from 2018. It took some wizardry to mine these MoonCats that even pre-dated the ERC-721 standard, but just half an hour later, I had acquired 30 of them….
Everyone thought these cats were going to moon. Ultimately, I sold around 7 Mooncats near the highs (1.5 eth each) and liquidated all but three at mint cost (0.1 eth). The story would be a passing footnote of broken dreams if it weren’t for what I did with the proceeds: buy a Pump, Ringer and Squiggle.
Buying expensive NFTs with the proceeds of another NFT sale is like transferring chips between tables in a casino. You could drop $40k on NFTs like it’s nothing, so long as it stays in ETH terms … none of it seems real until converted to/from fiat. Then, as soon as you run out of ETH, the shock of fiat hits you and the 0.5eth mints start to feel horribly expensive at around $1-1.5k per “jpg”.
Those next few weeks would herald the Art Blocks bear market, as most new curated drops would begin to trade below their mint price around 0.1-0.2 eth. As the prospect of a guaranteed profit disappeared, the instant sellout gas wars transformed into a sea of projects left unminted for days, weeks and in some cases months. At times, the only bid in the market seemed to be the famed SilverSurfer, with 0.05 eth floor bids across curated sets that I am embarrassed to admit I hit more than once.
During the periods of calm, it’s instructive to zoom out and ask, what do I have to believe for this idea to get really big? And if it can’t, why spend time and attention on it at all? When I first bought 7,500 ETH at 97 cents, I told myself I’d hold onto it until $100. Just three weeks later, when I discovered ETH 3x’d to $2.25, I sold it all. Why? Because I anchored to traditional return heuristics and lost sight of why I made the investment in the first place. What if, for any NFT you bought, you told yourself you wouldn’t buy it unless it had 100x potential, and wouldn’t sell anything unless it 10x’d? You’d be in a much better position to surf, rather than worrying about every ruffle of the waves.
During that period, I participated in every curated drop and bought multiples more on secondary. No, not JDH level god-mode (here and here), but enough to accumulate a steady collection. With 20/20 hindsight, every sale I made in that period was a terrible decision — four Algobots at 0.2 eth (now worth 2.5 each), Inspirals for 0.07 eth (now worth 0.95 each), Ringers for 4.5 eth (now worth 35), and the list goes on.
But overall, I stuck to my core convictions that the Art Blocks user base had significant room to expand. The number of unique owners at the time was less than 3,000. With NBA Top Shot having nearly 500k wallets at the time, I reasoned that if even a small fraction of mainstream users (let alone traditional art collectors) converted to Art Blocks, the world would look a lot different from what it was. Today, that number sits at 11,536 users. I still think there’s a lot of space to expand.
Looking back on it now, I first started getting involved with Art Blocks at the local peak of the first bull cycle, right around the time of my first mint Archetype (project #23). The next 50 projects or so largely middled along for months. During this period of calm, my favorite project was Subscapes by Matt DesLauriers.
I actually managed to mint a Top 4 trait rarity waterfall, my luckiest mint ever. And so it was perhaps my fate to sell it for what in retrospect was a measly 4 eth. At least it went to a good friend and great collector (AC), who has the single most impressive collection of Subscapes of anyone. The piece is now listed at 200 eth, and this was my painful first lesson of Art Blocks: in an expanding market, never sell your grails!
The good news is that, I was so immediately despondent after selling Subscape 215 that I immediately bought 6 more with the proceeds. I now own 12 of them and it’s the one set from Curated that I’m most keen to keep accumulating. You need only read Matt’s own writings on the set to understand why.
Months later, the bear cycle abruptly ended with the release of Tyler Hobbs’s Fidenza. As Tyler Hobbs writes in The Rise of Long-Form Generative Art, it’s the ability for collectors to capture a fleeting essence of that fine artistic balancing act of controlled randomness, with no opportunity for “artistic intervention”, while ensuring a consistent standard of variation and quality, that gives long-form generative art such extraordinary potential. Careful though: once you start playing, you may never buy another profile pic NFT again.
I had chosen a terrible time to travel to New York. While I managed to mint Fidenza #817, a beautiful soft shapes, I wasn’t able to conduct my usual scouring of secondary markets after the drop, where dozens of Fidenzas were scooped at prices between 0.2 and 1 eth. Months later, I would accidentally sell this for 99 eth, a listing I had forgotten about because I assumed it would never be hit.
The pattern for every other curated drop had been a flurry of activity on the day of the drop, followed by a gradual decline in the floor as interest in the set waned. I didn’t even look at any Fidenza other than the one I minted for days as I was caught up in meetings, until by day 3 or 4 after the drop, I gave up my inhibitions and started buying Fidenzas at “crazy levels” between 1-3 eth. I even set the Fidenza record by buying Fidenza #841 at 7 eth. Weeks later, I would offload this piece at 15 eth because of some unfortunate circumstances I created for myself… little did I know that this is what the OpenSea listing would look like today….
Fidenzas would end up seriously messing with my psyche, and drive me into the darkest part of my Art Blocks collecting history. They were just so damn beautiful that they instilled an endless want for more, beyond my actual ability to feed the beast. And so I fell into a several week-long “dark ages” of my collecting history, when I started taking 50% LTV loans out on NFTfi against my Art Blocks collateral to create trading opportunities in hopes of buying more Art Blocks. I would inevitably repay these 30-90d loans within 3 days, as it always made me uncomfortable taking leverage out on my collection. But just as surely, I would jump back in as soon as I found a piece I “had” to have. Little did I realize that this would eventually turn into leveraged gambling that I had vanquished the memory of years earlier. I was forced to liquidate some of my best pieces (including three Eternal Pumps and several Ringers) to make up for poor trading decisions and repay NFTfi leverage. Yet somehow, I’m glad this all happened. Because it grounded me back in reality, and has set me at peace with my collection. Yes, it can always be bigger and better, but it will never be as great as the whale next door.
It’s exciting that we are now in a mini-bull cycle on the broader gen art supercycle, triggered by large purchases from defi whales (Vincent Van Dough), crypto funds (Three Arrows Capital), DAOs (Flamingo DAO) and NFT collectors broadly.
Most interesting of all has been the entry of traditional art collectors and curators into the gen art NFT ecosystem. A significant trad-art collector recently went big into the Art Blocks ecosystem, with a stunning curation of iconic Ringers and an Eternal Pump for ~$3.4m in aggregate, blowing out the previous Ringer record by a factor of ~4x, and printing not just one but two of the first $1m Art Blocks sales. One day soon, I am confident that this will be viewed as one of the greatest purchases in history.
The shock factor bled into the Squiggle market, with 2,649 eth of Squiggle sales on the same day, as folks realized how under-exposed they are to generative art as a theme.
As Tyler Hobbs writes, “There are so many reasons to be excited about generative art, but at the core of everything is this fundamental value: generative art is truly working with the essence of what shapes our new digital worlds.”
We have come a long way, but we have a long way to go. I expect in the coming days/weeks for the ATH Art Blocks sale (400 eth) to be doubled, and for us to see our first 1,000 eth sale to happen by the end of the year. It’s not even so much the crypto rich that excites me about the TAM — it’s the traditional art collectors and curators who someday soon will finally wake up to the realization that generative art NFTs are this generation’s social currency.
Michael Tant @MichaelTant3Full update on Three Arrows Capital NFT buying spree: Over the last couple days they've spent thousands of ETH on predominantly @artblocks_io pieces and Cryptopunks. The buying has happened from two walletss and the NFTs are being consolidated and kept in a 3rd wallet.
In the near term, I’m really looking forward to some of the crazy game theory around Dmitri’s upcoming drop Wraptures and seeing if us Pumps holders can coordinate. I’ll make one notable observation upfront: the interests of all Pump holders are NOT aligned, as some hold more than one (and therefore have relatively more to lose). I suspect we may see some Robin Hood style dynamics come to play here, as this is not a simple case of “good vs. evil” (cooperate vs. not), and the broader community would like for nothing more than for this group to not be able to hold it together….
For now, we can only ask, “what if…?”
I’m in the “steady state accumulation” part of my Art Blocks history, where I mint a piece from every Curated and Playground release (or buy secondary if I miss the drop), but largely stay away from accumulating more than 2 pieces per set. I consider myself incredibly fortunate to have walked away with my collection largely intact after my run-in with dark side of the moon. I wrote my last piece on Seneca and Art Blocks as a reminder to stay grounded, and to appreciate all the things I had to be grateful for by participating in this bright and sustainable community.
Strap in, it’s going to be a hell of a ride.