Can Art Save the Blockchain? | KBW 2023

thank you very much how are you I hope we can bring some color into the into the debate today so my name is mikovich I'm the CEO and founder of impact one and I'm also member of tag group's board tag group is a big well-being leader building City infrastructure for well-being but also investing a lot in art and now also on the blockchain and without further Ado I would like to introduce properly um my panel so first Nabil Sharna big round of applause Nabil is a Serial entrepreneur with multiple exits and has seated several successful companies as well as private investment funds with outstanding returns sit down my friend here this is your place perfect and then next is afrod Zuri independent cator and key advisor here to nft now please a big round of applause and then last but not least Mark spigler Mark that headed for 15 years Art Basel brought Art Basel to Miami and then to Hong Kong a big round of applause for Marx [Applause] sper so it's great to be here and to see how you guys created basically our whole new world uh through uh the cryp to nft blockchain and how this is also um you know influencing our world the traditional art and culture world and this panel in a way is basically a nice uh mix of this uh Both Worlds that we believe can come together in the utmost uh uh beneficial way for both sites we want to show you um a project that some projects that we created and commission from Rafi anadol and I will do a short introd introduction about this this project you can see right now outside in the temple area in the historical area of the Sheila Hotel it's a sense of feeling of Rafi anadol it's not only um a beautiful uh work uh of art but it's also a work with purpose it's called sense of healing because um this work is illustrating with Neuroscience data different states of the human mind and its healing so uh this work is a part of our mental health initiative mind uh that we have together with the Neuroscience leader mind ma um but it's not only this it's also an artwork that has a museum quality so rafik anadol right now uh is on the view in a record breaking Exhibition at the Museum of Modern Art in New York uh so this work is an Big Data scy scure comparable to other sculptures and artworks and then the third last but not least part is it is also an nft and it's an nft that broke several records the last record was 1.7 million at an auction and you can see here some of the different chapters of the work it's an addition of 20 each and what uh this work is illustrating is that if art if Museum Quality Art and blockchain comes to together we are creating value and I will talk a little bit about this um in my introduction the next uh work that you seeing here uh it's a very fresh commission we commissioned raik anadol to co-create with the indigenous um Community uh of the yawa Nawa from Brazil from the Amazonian rainforest and Acra um a work that they co-created basically and this work um uh is an addition of three big Works seven M high on the right side and then 1,000 nfts it's a drop that we have started only recently that uh was uh every single bat was sold out and you can see here on the open CA from today um uh we have a floor price of 1179 at uh but we started with 1.5 yes so it's probably the most successful art drop um of this year and the the reason why again because it came um with meaning with purpose and with a high art um uh approach but also utilizing in the in my opinion in our opinion most optimal way the functionality of the blockchain and then I want to show you the runaway nurse from uh from Richard Prince and you can see here this is a work that was acquired for the Pisces collection by Simon Dei uh in the year 2002 for 35 thou $ 35,000 us was the acquisition price and then it was sold at Saab auction in Hong Kong for 12 million Us in 2021 so you can see here how much traditional art can also contribute to a value appreciation and yeah last but not least uh you seeing the the sense of healing from rafik anadol uh with a photo that was taken today in the courtyard of um of the Sheila Hotel um so Nabil we co invested together with metaphor Capital what is your regulated crypto Fund in the sense of healing and also in other uh works that are basically matching this quality um of creation that we are aiming for um let me know what is your take from the perspective of a you know early crypto investor on this new marriage between the conventional traditional art world and crypto yeah thanks molai um I think for me this was um Awakening moment for me personally I've never was never in the art scene right it was always in the technology scene or uh the blockchain scene but for the first time you know I could see that this was something that was culture defining or like a moment in hisory his where there was a transition from something that only belonged to a few people who knew the art world to something that now became available to everybody uh because of the democratization process of the blockchain and what um you know Rafi was able to do to build it basically as a native uh cryptocurrency project so you know I think for me and uh in our thesis it was very very simple right like um like the same same way you would evaluate technology or you would evaluate the founders you would evaluate the market there was finally a very easy transition to say I can evaluate the artist I can evaluate the technology he's built on and I can see the what we call in the tech World The Tam or the total addressable Market here the Tam is global everybody deserves to see this piece right from rafik and so you know I think for me there for there was a moment where there was a very clear transition to say this is finally something that everybody should uh should see and and be a part of thank you na afit um you are coming from the traditional art world you traditionally educated you worked in the traditional art world and then you transitioned also early into uh the blockchain crypto sphere and now you're not only creating nft now but numerous other projects um that are bringing this Both Worlds together how you see the benefit that uh the blockchain can actually bring link to to our traditional art and culture world thank you actually I want to expand on something Nabil said and it is I was not really into art before the blockchain and the reason I find this to be a sentiment that is repeated of and often Again by digital art collectors by nft collectors is because the art world is opaque and it's opaque on purpose we don't want you to see behind the curtains I want to be able to make up an arbitrary price and charge you for that arbitrary price and if you tell me you can find a Richard Prince for a lower price I tell you to go buy that Richard Prince because this is my price and what's really really interesting about the blockchain and why people like niil and many other collectors because we're all collectors of something right whether it's art or watches or shoes or people what I found to be really interesting is because the blockchain is transparent you can go on the blockchain you can see what a price of art actually sold for you can see who owns it and all of a sudden the more you study these things the more that you realize like you too can be a collector of digital art you too can understand and what I found to be really beautiful is buying digital art is a slippery slope into buying traditional art and all of a sudden so many of these digital art collectors have invested and supported and become patrons of traditional art and what we're seeing is a breakdown of barriers and I really really love seeing that because I want to get to a place where we stop saying traditional art and digital art it's just art question after that to you uh how important do you think is this infrastructure that was created because you said like um it it sounds seemingless you know the transition from digital art to non-digital Art but for this we need also a certain technological environment right yes so it's important to note that one digital art is not new right it's been around for decades um I'm going to shill for a second so what's really cool is today or yesterday at midnight christe's announced a really incredible collection of Keith Herring digital Works neverbe seen he made them on some computer called the Miyagi right and they found them the Keith Herring foundation and they're selling them with Christies and so again we've been creating digital art for decades all the blockchain is doing is allowing us to have ownership transparency and also provenance which is very very important when it comes to art and if you aren't aware providance just means the history of a work who made it who bought it who held it I mean this was one of the biggest uh problems in the art world if you go back in art history to really establish is this an original work is this a work that was done by the workshop or by the artist himself so there are so many things that obviously the blockchain is solving but maybe the biggest problem that is solved now for digital art and uh everything what is what you can can reproduce that we have suddenly a certificate of ownership yeah it wasn't there before because before the ownership was just the possession and the ownership of a think you know that you could store somewhere and now we we created something that really allows to accumulate value and it allows also the artist to say like I want that this uh certificate changes from my ownership from that I generated it to the hand of a collector but there's another aspect to it it's uh basically on the other side uh it's the democratization it's the accessibility it's also like to uh widen um the canvas for the artists that can uh reach much more people a much wider audience and Mark as you obviously know we are also one of the main investors now the elite investor in superblue and super BL is a big experiential Art Center in Miami um uh how do you think this whole trend of art going into the broader um the broader audience is um supported by this new um generation of uh infrastructure and art I mean I think the traditional Art Market is is based around singular objects you know the majority of artworks that are traded at fairs like the one going on coex right now free Soul the majority of artworks that come to auction are paintings um and the market the Art Market is built up around creating SC scarcity sometimes manufactured sometimes real it's man it there is the the opacity about where pricing comes from um there's an enormous opacity because unlike stocks or real estate where every transaction is registered in you know in some sort of exchange or Ledger um half of the Art Market doesn't have any sort of public record because it doesn't take place at auction and even auction records quite frankly are tricky because not auction on all auction sales are what they appear to be um you know sometimes you have people that incence own part of the work bidding against other people you know because they're you have reserves sometimes you have what's called chandelier bidding which is the auction house bidding something up without necessarily people behind it um anyway so what you have is a market where what you have what's interesting right now is you have a culture clash between the next generation of collectors which is frankly people like the people in this room people coming out of digital um technology people coming out of fintech for whom Market building is done around transparency and scale and the traditional Art Market is the exact opposite of that it's built around opacity and exclusivity and so what's really interesting for me having spent 15 years being a central player within the traditional art Market is to think about how the next generation of patrons will engage and I think the notion of democratizing art is it's a little bit of a slippery phrase because obviously as long as it's expensive most people can't buy it you know yes trans it's out there but of course you know if you're talking about singular objects it's very difficult that's why I think the huge drops that you would have with nfts or the multiples that you know many artists have made are appealing not only to the collectors or would be collectors who can finally afford it but also to the artists because let's be honest I think most artists are uncomfortable with the fact that most of their friends and often they themselves despite being successful artists couldn't afford to own the work and so the notion of having an art world where art can be experienced in the setting of immersive large- scale installations or can be bought in this in the context of either physical or digital or hybrid additions allows the art world to be bigger I mean one of the really fascinating things about the Art Market is that in the last 15 years the number of billionaires has gone like this but the size of the Art Market has gone like that so there's clearly a Delta between the supply of collectors and the demand that that supply has failed to produce and that was a complicated phrase but basically the Art Market should be much bigger because there are much more there are many more people who could afford to buy art and it's not and I my theory which grows stronger and stronger the longer I'm away from my previous job is it it's because there's a disconnect between the next generation of collectors and the market and the way that the market appeals to them and it starts with the fact that you walk into a gallery and you come to a large marble desk and commonly you're not greeted and that's just not a way to appeal to people who operate in a different kind of culture so I mean I think I see the digital infrastructure is being created by a blockchain I see immersive art experiences as part of a broader rethinking and recasting that the art world needs to do and it will do so in some ways like digging in its heels and begrudgingly um but it needs to be recast in order to be embraced by the next generation of patrons I mean it's also a question of fluidity right so maybe I can open up the discussion between us a little bit as so you can also um ask yourself questions and myself a question but I I would put it in the room that uh today we we are much more symbiotic much more interconnected right so when when when we talk today about the artists that are really cutting edge they're not anymore you know defined to one medium yeah they want to do architecture and they want to do a small basically uh digital uh work that has 1 kilobyte right and this is like a very interesting uh perspective that goes actually back to the origins of art where artists were Renaissance people right that that were actually educated in all the different craftsmanships of their times yeah I mean the history of how artists were defined is very very broad I mean in the Greeks actually the best artists were not the most Innovative but the ones who were most able to copy previous artists so there's it's been defined in many many ways if you look at ort of art coming from Africa the art that we judge to be the most authentic is the stuff that was actually actually had a real purpose as opposed to the stuff that was made for aesthetic purposes to be sold um but certainly I agree with you and it's actually relatively I would say relatively recent because when I started getting involved with the art World 20 years ago artists refused to be qual defined by making one type of art like I'm not just a painter I'm also a sculptor and what's interesting now is that people don't just want to be artists they also want to be film director look at Steve McQueen like one of the great video artists and now an Oscar winning yeah person look at zaha Hadid who made art but who also made architecture um and so I think the notion of being defined not just by one medium is no longer valid but also not even just by one field I mean and N you're a good example because you basically evolved from The Collector of sneakers to The Collector of Rafi anadol well I think actually to to to capitalize on both you what both of you are saying I think the real Crux of it is culture yeah right our our entire culture is evolving and people you know put culture to the side because they focus on the business but I think what most people don't understand is culture actually drives business right so when you know we're here at a blockchain conference talking about art which three years ago four years ago would would never have happened even though digital art was around you know has been around for decades but the reason that's possible is you know we've had all these technological advancements right we we joke about this all the time but I say we're living in the most exciting period in human history and people say why there's all these wars and like the human brain has not had an upgrade in 50 million years right but what we've been able to do over the last 30 40 50 years and even before that is build all these technologies that are now getting us to this point here today so people think that hey the blockchain and digital art and like crypto just appeared no right we needed all of these basic things to occur we needed you know if you just be more modern you needed computing power to be faster you needed storage space to get cheaper right you needed you know you needed AI to kind of get to the point where it is where now we're actually saying generative AI art is what we're displaying right so it's all driven by basically people wanting to participate in in in the world and that's that's through culture right so the reason I think this is you know a different moment in time is like you said it's not just people being able to access it because it's easier it's the artists themselves are being redefined right the the um good friend Chris Dixon you know he has he has an essay about a thousand fans right so you know like before even 10 15 years ago if you wanted to be a successful artist or you know you either needed mass mass scale and I don't I don't mean just art but like music you know everything right now you don't need to have mass scale right you need a small group of people that are very driven or committed to what you're doing and all of a sudden you have super fans who are culturally motivated to actually make you successful right so I think we're in a we're we're living actually in a very unique period where artists are both consumers and creators and the the community actually drives value directly to the Creator right which is a very different model than the world has experienced for the last 100 years so I'm a little more romantic about this and I think what the blockchain has done is it's returned us to patronage and we have not had art patrons in a very long time and when I talk about art patrons at one point you know it was churches that could afford to commission art that spoke to their disciples because disciples are mostly illiterate right and then it became the Royal Court that commission art and the noble people you think about the Mona Lisa someone paid for that sitting whether it's real or not we're not sure and and now fast forward and these artists now have patrons because as a normal person who has access to the internet you get to be a patron you know if you collect fous or Diana Sinclair or drift whoever it is you collect guess what they have your address and they have access to you and that access empowers them it allows me to say I am an artist and the majority of my collectors live here I am an artist and more of my collectors collect this kind of Photography that I do this kind of digital renderings that I do and allows you to really lean in because this thousand fans is fantastic for musicians fantastic for sports players but unfortunately up until the blockchain and the Advent of nfts and digital art many artists were chosen by gallerists right by critics and now suddenly we've returned to patronage which is truly romantic in my opinion no I mean we see it with the drop Winds of yawa right so imagine we have like sold out most of this drop every single B was sold out there's some small left that that that is basically pre-sold and um uh so we we we at basically engage with 1,000 people everyone gave $2 and half th000 us equivalent and we collected all together with the three main Works around over3 million US dollar within a span of one month for a community in the Amazonian rainforest that had no money ever they never had 1 million 2 million or like three million on an account because they are a tribe of 2,000 indigenous people so every buyer became Patron basically of this community and in the same moment already has an factor of eight on the investment right so basically this kind of relationships are really incredible because they they they were patrons relationships and this patronage system uh is also something just to highlight shortly that if we look at you know like cities or states like Venice Venice was not you know like a museum like today Venice was the most powerful economic zone it was like New York right it was the most powerful state it had like the biggest Armada it was the biggest trading Merchant organizations they the biggest banks but all what is left today is what was produced as culture nothing else there's no Armada left there's no banks from Venice and there's also no Merchant organizations so culture at the end is where we are storing our value um afet pointed out previously a lot of the benefits that the blockchain has in terms of creating transparency around pricing transparency around provenance but one thing we haven't talked about and what you raised before is is important is um one thing that artists don't have right now is any kind of benefit from the resale of their work uh and there are laws in place which are hard to enforce um and I think one of the the really great things um would be for example if Richard Prince When you have a 33,000 per appreciation every time that work is sold would benefit from it because in essence he's the one that created the image and I think um one of the the holy Grails for the Art Market and actually one of the things which I hope will eventually convince Galleries and artists to think more more more progressively around the blockchain and its possibilities is the possibility for artists to really benefit because what we have is a kind of Creator economy where the creators benefit the least because basically they put things into play yeah and when the market goes up you know the the artists and the galleries put things into play and when the market goes up the artist often doesn't b or generally doesn't benefit and then other galleries come in and get involved so I think the possibility for creators to benefit more is really strong it's one of the for me is actually the most interesting way in which the blockchain could transform the Art Market could I expand upon that absolutely if you're unaware if you are an artist and you sell me your work for $5,000 and I turn around and I flip it for 20 you see you see Zero commission you see Zero royalties from that and so a lot of us ntional space jumped on board to web 3 because royalties were built in and now those royalties are at risk and it's a really scary place that we're in and now that these artists who deserve royalties in the UK it's the law to give artists royalties and yet many countries that is not enforced that is not upheld so there's another thing to this topic and it's purpose and ethics yeah I think the transparency um element of the blockchain also creates a completely different you know um visibility for not only the question of realities not only the question of pricing and Market but also what actually is the content of the artwork yeah because if we talk about art as the root of all culture and we look around us uh we see that our culture has provided very hostile environments our culture has provided almost a sick City we have like a mental health crisis we have like you know so in a way our culture is um in in a difficult situation and uh we need to highlight the ethical part of everything what we are doing is it really necessary is the resources that we using really necessary is the outcome better than if we wouldn't do what we are doing so in a way this kind of transparency this kind of visibility is also fantastic for me so I I would like to ask you where where do you see this going where you see it uh in 5 10 and maybe 20 years to be so we talk about accessibility right and yes to Mark's point the majority of artworks cannot be purchased by the majority of humans alive but what's interesting and beautiful about blockchain is you can still see it digitally right even if her's work wasn't out here in this Grand beautiful landscape you could just go online and you can see it and that's really special being able to create things to share with people to improve people's lives to challenge them you know we all love a pfp project we love these little characters they're great but how are they genuinely improving your life how are they challenging you to explore how are they provoking you to think differently about the world I mean I think what we're talking about here is narratives you know humans are driven by meaning and by narrative and I think The Narrative of speculation which frankly is what drove the nft hype which then collapsed not surprisingly um is not a durable narrative speculation is not a durable narrative I think uh what art does is it creates with people at a more at a deeper level um and great art has has real meaning and that was one of the things that made me suspicious of the nfts is not only did I find them aesthetically boring and derivative but also I just didn't see why they existed you know and I think the beauty of Art and this will be interesting as AI comes more and more into this um the beauty of art is that you somehow or rather access the artist's personality and their meaning and their narrative and I think no matter what happens narratives are what drives humans and I think the narratives that develop around the art will be essential you know whether it's art that's that's physical or digital whether it's on the blockchain or on a piece of canvas true I think I would just um to just provide a different uh perspective is um there's a saying in crypto like you're still early right and I I think what most people don't realize is even globally there's less than 100 million wallets right that that that are out there right so when you talk about culture and you talk about change and you talk about like this narrative you know I I feel like we're so um uh we're we're still at an infancy stage that I think the whole narrative shifts and if we were to have this conversation 12 or 18 or 36 months it would be dramatically different right so you know I think we have to be aware that it's being built out in the open right and I think people mistake privacy and anomy you know like uh on the on the blockchain and with the art and so I think we're going to run into a lot of different dilemmas but with every new technology there's always been challenges right so yes we needed the nft period to actually get to this point where now we're doing generative AI art and it's actually being showcased you know in museums right so I think that's the way I would frame it is that where but it's it's coming quickly right if you think about exponential technology if I asked you to take 30 steps around this room you would probably get from here to the door but if I said you know take 30 exponential steps where each step is doubling you would go around the earth 26 times and that's the scale at which everything is moving right now in this space so I think we're going to have a very different conversation very soon very different very soon and I also want to say that you know culture was always about purpose so this is why most of the culture was about religion we always believed that you know every of our action is somewhere recorded this is still a private belief but we can be sure that today with AI upcoming every of our action is recorded that's for sure thank you very much for this uh panel big round of applause for the panelist and our time is [Applause] up