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Making millions selling JPEGs – NFTs and what’s behind the Crypto Art Hype with SuperRare co-founder Jonathan Perkins

Unforkable is the podcast that aims to make crypto more fun, engaging and accessible for everyone. Jonas (@unforkablepod) is interviewing the most exciting minds in the cryptosphere and brings their stories to life.

About Jonathan Perkins

Jonathan Perkins (@superrareperks) is the co-founder of SuperRare, a social, digital art platform for crypto art and non-fungible tokens (NFTs). Jonathan is a musician, programmer, entrepreneur, and digital art collector.

In this episode we deep dive into the world of digital art or crypto art. What are NFTs and how can something widely available online still be valuable?

How did the crypto art market seemingly blow up over night? Why should you care?

We talk about the beginnings of SuperRare and how difficult it was to convince people to take digital art seriously.

We deep dive into the NFT boom. From digital art to collectibles to things in between, like CryptoPunks. Finally, we also look behind the scenes trying to figure out who are the people buying all these tokens? 

Digital Artworks featured in the the show:

Find out more about SuperRare at SuperRare.co 

Beats by Yung Kartz

Sponsor

Cryptovalley.jobs is a job board where engineers, designers, analysts, traders, and community builders can find exciting crypto jobs. 

Visit cryptovalley.jobs and sign up to the email list to get informed when new jobs are posted on the platform.

Transcript

Please note that this is an automated transcription. Expect errors, typos and other weird stuff.

NFTs what's behind the hype with SuperRare cofounder Jonathan Perkins

Intro

Jonathan Perkins: This is an artwork called rainbow sunset, by artist trippyogi, and trippyogi is and artists who plays with, extremely vived colors, almost like psychedelic, very popping out of the screen. And yeah, so this is a video art and you can turn on the sound.  I would describe this as like a really pleasant, interesting to look at slightly psychedelic digital, spinning rainbow sun on top of a shimmering ocean. 

Jonas: Yeah, I think that describes it really well. And then there's the sound also which kind of like spherical wavy sound. I don't know.

Jonathan Perkins: Yeah,   

Jonas:  In this episode, we dive deep into the world of digital art or crypto art. What are NFTs and how can something that is widely available online, still be valuable?     

Jonathan Perkins:   In crypto art. Everybody sees it, but only one owns it.  That's kind of like a poetic summation of the paradigm shift.  

Jonas: How did the digital art market seemingly blow up overnight? And why should you care? 

 Jonathan Perkins:  Fast forward to 2020, we were starting to do about a hundred K a month in volume. So artists started selling, you know, $100,000 a month of art and then, It's 10 x since there.  So, the past three months or so we've broken over a million dollars in sales a month.

Jonathan Perkins - Co-founder of SuperRare

Jonas:   Hello, and welcome to Unforkable the podcast that brings you juicy stories straight from the blockchain. Today on the show we have a very special guest

Jonathan Perkins:  My name is Jonathan Perkins and I'm a co-founder and chief product officer at SuperRare.   SuperRare is a digital art market built on Ethereum. Um, so it's been around since about, uh, early 2018.

 Jonas:  We talk about the beginnings of SuperRare and how difficult it was to convince people to take digital art seriously.   

Jonathan Perkins: The number one most important thing in this space is to grow it and bring more collectors in. In 2018, when we launched people were like, we talked to investors and other people in the space, they'll be like, Did you say art? Like, like what, like what are you guys doing? Like, do you hate money?

Like what, like, why would you like. Clearly NFTs are for gaming.  There is the sense of like, what are you trying to sell me here? I can just download this JPEG. There's no market for this stuff. Like why would I pay money for this silly token?  

Jonas: We also discuss how these silly tokens turn into the NFT boom that is currently going on from digital art to collectibles, to things in between like crypto punks. And we also look behind the scenes to try figuring out who are the people who buy all these tokens. 

Jonathan Perkins: I mentioned my dad earlier, his just like in disbelief, uh, that like, you know, SuperRare is doing about a million dollars every month in uh, in volume. So artists are earning hundreds and hundreds of thousands of dollars a month. And that begs the question of who are these collectors doing this.

Sponsor: Cryptovalley.jobs

But before we start, let's quickly address our sponsor today cryptovalley.jobs is a job board where engineers, designers, analysts, traders, and community builders can find cool crypto jobs. 

Jonas: Full disclosure I run this job board as a side project of this podcast  and sponsors of the pod can advertise for free on the job board. 

In the beginning, the jobs  you will find there will most likely be based in Switzerland or remotely, but in the spirit of decentralization and since there's not one single crypto hub in the world, The job board will grow to locations all over the globe. So please go and visit cryptovalley.jobs and sign up on the email list and get informed once a week when new jobs are posted on the platform. That's cryptovalley.jobs and now let's start to show. 

 

Introduction Jonathan Perkins - Co-founder of SuperRare

 let's jump right into it. It's quite an ambitious program I have for you today. Could you give us a quick introduction about yourself? With the name and w what you're doing, what your position is   

Jonathan Perkins: yeah. So my name is Jonathan Perkins and I'm a co-founder and chief product officer at SuperRare. SuperRare is a digital art market built on Ethereum. You can kind of think about it, like Christie's meets Instagram. Um, so it's a purely online platform for digital art, where this global network of artists are constantly creating, selling, trading, digital artworks, and there's, uh, uh, you know, again on the other side of big network of collectors, um, who are collecting art and it's all backed up by non-fungible tokens on the Ethereum blockchain.

What are NFT's?

Jonas: Great. And I think that's a great, um, keyword. You just mentioned the non-fungible tokens, NFTs,  even like people who are seasoned in crypto   seem to have troubles to wrap their heads around.  The other day , um, stumbled upon a tweet from Peter Mc Cormack a famous Bitcoin podcaster and he tweeted: I screen grabbed your NFT, now I own it.

Jonathan Perkins: Yeah. Uh, that was, that was a great Tweet. He's a great Twitter personality.

Jonas: But can you, I mean, there's a lot to unpack there. I mean, what is a NFT and why doesn't that work? What we just said, if I  just screen grab your NFT, uh, that I own it?

Jonathan Perkins: Um, it's a great question. Uh to be fair It's not the easiest thing to wrap your head around.   It's, you know, part of my job to just like, have this conversation with people.   My dad's 84 years old and like, you know, I finally gotten him over the years to   understand what Ethereum is and what a non-fungible token is, but, um, yeah, there's a whole spectrum.   In a nutshell, as the name implies, um, unlike a US dollar or a Bitcoin or Ether, which are all interchangeable, it doesn't really matter which one you own. A non-fungible token is a bit more like a house or a car or a plane ticket. Like it really matters which one you have and you probably don't want to trade one for the other, without knowing more details.

  I think about them like digital objects, they're digital goods. Um, and the reason this is cool and important is that for the first time we have scarcity within these digital goods.  If I email you a photo,  you have the photo and I obviously still have the photo. It's not like gone from my computer. Um, In contrast, if I give you a hundred dollar bill, it's extremely important that I also don't still have a hundred dollars.   

Bitcoin really pioneered this in the digital space.   Unlike a photo, if I send you Bitcoin you have it now I don't have it anymore. Um, so that's the scarcity aspect.    And so these NFTs, use cases range from what we're doing with, artist authenticated digital art to video game items, to sports collectibles, to concert tickets. Like you name it. Like there's, there's a lot of teams working on really, really cool stuff in the space.  Um, But it all kind of comes down to this concept of like, it's a digital object with unique properties that is scarce.  You can own it and then if you sell it, like, you don't own it anymore. 

I downloaded a rare digital piece of art for free

Jonas:  If I go to the SuperRare website right now, um, I just did that this morning. I went to the most expensive listed artwork. It's 21 million Ether and I right clicked it and I downloaded it.

Did I just do the heist of the century? Did I just steal 21 million Ether?

Jonathan Perkins: Uh man of you did you, how did you think of that? Um, yeah, right. Uh, back to Peter's Tweet Um,  I actually like to kind of draw  the analogy in my mind, one of the first Instances of digital scarcity is actually the domain name. So if you think about like web domain names it's a shared registry. And so if we're talking about like www.facebook.com,  there's only one of those because the whole world agrees that there's this one registry of domains and whoever has that dotcom owns it, they control it. So you could screenshot a domain name, but you don't control it. You can't put a website on it and you can't sell it.   So that's kind of high level, like to bring it back to the artwork.  It becomes  conceptual, and it's like a totally fair question.

Art is freely  but only one can own it

It seems kind of crazy. Like people are used to media being free and infinitely copyable. I can download movies,  music. Like, we're all grew up in the digital generation. but the important thing to understand the SuperRare is, the files are not scarce. Like in no way, are we trying to pioneer new, like DRM,  digital rights management.

This is not about blocking access to the art for  anybody. and so it kind of turns art on its head in a way.    We get this question all the time, typically from people from the art world. Of like, Oh, well it's like cryptographic art, right? So it means it's like hidden for everyone who doesn't own it.

Um, you know, and you think the analogy from the art world is like, if I own a sculpture, I can put it in my basement and hide it. So when we first started out. People kept asking me like, Oh, well, how do I Hide it? And we were like, Oh, this is weird. Like this, you know, this one person thinks they're like, they're asking about hiding the art.

In Crypto Art, NFTs are the original signatures of the artist

Like, I'll never get that question again. But then like tons of people kept keeping to ask me that, um, And so it's, it's certainly not about hiding the art or restricting access to it. In fact, it's the complete opposite.  We embrace the fact that the file is not scarce,  because we do have, the scarce certificate of authenticity, this digital object that was created and signed directly by the  private keys of the artists themselves on SuperRare. You can't take a screenshot of it just like you can take a screenshot of, you know, a wallet with 10 Bitcoin in it. But, uh, you know, you can't transfer them, you can't sell them.

And the more people that download it, the better to be honest. If you're the owner of the certificate of an artwork that everyone in the world has seen and downloaded then that's probably the most valuable artwork in the world.

Summary NFT

Jonas: Is that, um, just to, to wrap this up with the NFT, um, what you're trading, what do you buy  on SuperRare.co is, basically like a certificate that says, this is the artwork you own, and you trade the certificate while the artwork, the pixels that you see, the ones and zeros, they're not scarce. Like each person who can consume the product, which is basically everybody.

You can not, you can still not control that, has exactly the same quality of the image or the video or whatever the digital artwork is, but only one person owns like a certificate that proofs it belongs to them.

Jonathan Perkins: Yeah, exactly. That's a great summation. There's an Italian artists duo called Hackatao um, that, uh, coined a phrase very early on in 2018 with a tweet that said: in crypto art, everybody sees it, but only one owns it. Uh, so that that's, that's kind of like a poetic summation  of the paradigm shift.

Um, but I think it really works well with the internet because, you know, there's the saying, information wants to be free and I think that's very true on the internet. And so the idea of restricting access, as a linchpin of your, of your model. I don't think works on the internet and the perfect example of this is Apple.

I mean, Apple, like the biggest and most successful tech company in the world literally tried to have their music system based on DRM and they moved away from it. It wasn't working. So I think embracing the fact that the nature of the internet and what people want to do is share and copy, lean into that and say, sure, the more famous this, artwork gets the better, um, you know, like everyone can see and download a picture of the Mona Lisa, but there's only one and it sits in the museum and so that's the analogy with, if you, own the NFT you own the real thing in the museum and everyone else can, can like Google it and see to see it but you have the artwork as intended and created by the artist.

What happens if an artist lists their work on two platforms?

Jonas: but the certificate, I mean, uh, SuperRare first of all, is a platform right? And, you guys do some human work there. You kind of make sure that this artwork is listed here for the first time. And you know, like what, what would happen if an artist goes to two platforms at the same time with the same artwork does have an influence or am I thinking about this in a wrong way?

Jonathan Perkins: No, not at all. That's a great question. Um, from the start we have done our best to build SuperRare as a social platform. Um, so  it's not anonymous, you can see, or it's, it's, it's kind of like Twitter, it's like pseudonymous everyone has a username. The reason we did that is because if you look at the traditional art world, reputation, uh, is really one really fundamental layer. Um, and not just the art world, like, you know, many, many different markets and systems. And so to answer your question, it really comes down to the reputation of the artist. So if you're a say, uh, fine art photographer and you you're selling limited prints of, you know, say 10 black and white photos that are signed and editioned. And you tell all these collect these 10 collectors that they have a one to 10 edition. There's nothing. in the technology is stopping you from going in and printing another 10 in your dark room Um, but what happens in that case is your reputation would take a, hit. Those collectors would probably like the value would go down.

This collectors would talk about it and you probably wouldn't be able to sell stuff again in the future. and so that's really the same thing in this case. Um, so we, we're not trying to like control what artists do. We're just trying to, like, blockchains are very good at creating transparency within systems.

Um, so it's quite easy to verify one that, like who minted this artwork, on a different platform and, you know, two if  an artists like you know, mints two things saying they're each one of one. , and to be honest,  it doesn't really happen. We're like three years into SuperRare and, um, that's, you know, there's many,  areas for improvement and problems that come up, but that's, you know, that's not really one of them.

Is SuperRare similar to a gallery in the traditional art market?

Jonas: Yeah, basically. Um, so, so what I heard from, uh, I mean, at the end of the artwork, the quality too is really always super hard, right? Like, is this like a superb artwork itself? But I personally believe that a lot of it is kind of the marketing behind and the story behind, uh, those artworks So the reputation as you mentioned is super important.

So nobody would kind of do that fraud in that sense, because. The story is important. Uh, the symbolic meaning  of the artwork  especially the ones which are very valuable. Um, there there's like a study by artefacts.net in the traditional art market that shows kind of like the, all of the financially successful artists.

Uh, they basically started with a handful of art galleries, like. The art galleries are kind of the kingmakers in the art world Um, do you see something like that happening also for digital art? Do you think SuperRare is that place for instance, where, where those kind of artists are born, um, compared to other platforms.

Jonathan Perkins: Um, yeah, that's a good question.  Well, what we're trying to do is foster a more peer to peer model where artists, are much more in control. Um, and you know, it's, it's kind of like, I think again, I think it's kind of a natural evolution of, what the internet has done.

If you know, like record labels are far less powerful than they were a while ago, you know, like a decade or two ago because they don't control, the distribution anymore. and you know, with the internet, and with, with crypto art we're really like putting the artists in control. And sure, each platform has its own, kind of stipulations, like on SuperRare everything is currently just single edition art.

But beyond that, artists can really, create, as they see fit. Whereas if you look at many traditional gallery contracts, it's very much a you know, there's a wide variety, but it's not uncommon to find the gallery kind of like dictating what the artists should put out or like how much or how it should be priced for.

And it's really not like creative freedom for the artist  And so our philosophy is really to provide the tools for this ecosystem to flourish and, kind of get out of the way and let people let the creators be creative and like what the market, uh, evolve an efficient way.

Describing digital artworks

Jonas: Hey, by the way, we are only recording the sound, but think that podcasts are a super visual medium as well. And I sent you some links to some artworks and maybe you can open them. Step-by-step. And I would be interested in you just, um, you know, activating your imagination and kind of like explain and describe what you see. Uh, but you can also give some context if you know, the artists for instance, or whatever you want to add, but just like to paint a picture, because what I try to do is like to show how, um, you know, like digital art, what is digital art actually, um  through audio,

Click to transmute by pak experienced through audio

Jonathan Perkins: Um, yeah, uh, this is awesome.  This is way more fun than many interviews Um, all right, cool. Yeah. So, uh, I've opened the artwork on SuperRare that you just linked me. Um, and this one is really interesting. This is an art artwork, titled click to transmute, um, by the artist pak.  Pak is a really interesting artists who came on the scene, I believe.

Yeah. In early 2020, and this is kind of like, um, taking the crypto art world by storm. Uh, very, very, very successful artists in the market, extremely active community member.  Responsible for breaking, um, many new passionate people into the space and his artworks, often are very minimalist and black and white, um, and geometric. They often are kind of like very enigmatic and give you the sense that there's something behind the scenes. There's like a hidden message or something you need to like dig deeper to understand. That's that's kind of generally like the, the sense I get from paks artworks.

Um, and this one you send is, is, is quite literally that actually. So what I'm looking at here, when I just, uh, load the artwork is a white orb on a white table or surface, um, with complex shadows around it. It kind of looks like a ping pong ball sitting on a white table. If you click on the image however it enlarges and completely changes, uh, into a translucent ball that looks kind of like a globe of ice sitting on a black, mirrored surface. Uh, so it's pretty shocking. It's like a completely complete visual change. Um, and this kind of blew my mind when it first got tokenized on SuperRare and like 

Jonas: And, um, that one is the first one I've seen, um, where something like that happens. What happened there? This change that you can click it. Uh, is that something you as SuperRare offer or is it some workaround that this artist has done to kind of.

Um, change to image or is that, what am I looking at? Just to understand did that happen? It's not a video. It's not a, it only happens when you click.

Jonathan Perkins: Yeah. Yeah, for sure. Um, yeah, it's, it's basically a consequence of the artist being extremely, extremely clever. And, uh, like I said, it was a surprise even to us who built the website. So we did, we did not work with them to do this. Um, and actually it's, it's a PNG. Um, so that many people know PNGs, um, like JPEGs have the possibility to be partially transparent.  And on many websites, like if you enlarge an image, it pops out and gets this black background. Um, and so pak identified this about the SuperRare website and crafted this PNG, such that, if it's on the white normal background, it looks kind of like, uh, like you would expect the artwork to look like the ball sitting on the table, but if you pop it.

Uh, partial transparency that, um, that kinda kicks in on the black background and makes it look like completely different. So it's like, it's kind of like visual trigger triggered, just pretty awesome.

Jonas: That's really awesome. And I just, um, figured this out, well, I didn't figure it out. Actually. It wasn't rather random that I found this one. I mean, I looked for, maybe we have to say that pak is I assume the most  successful in financial terms, uh, artist on your website, 

Jonathan Perkins: Yeah. Yeah, he is. Um, yeah, he was the first artist to cross the thousand Ether threshold earned a few weeks back. And, um, if you count it based on today's, ETH price, like not historical, like on SuperRare we track them based on like the time of the sale.

Like what was ETH worth at the time of the sale? Because all of the sales currently happened with ETH Um, but yeah, if you track it in that way, then pak has earned over a million dollars, um, in the crypto art scene in 2020, uh, which which isn't if you

What is the average earning an artist can make on SuperRare?

Jonas: That's amazing. Can we, uh, I want to continue with the, uh, with the artwork afterwards, but as we are on this theme with numbers and money earned, I assume that, I mean the million dollars that's really like an outlier and then the next one would be a significant drop. And then what would be a more realistic picture for, let's say an average artist.

So how can you kind of describe this curve when it comes to earning on SuperRare

Jonathan Perkins: um, yeah, that's a good question. If you've read the book, the long tail or similar things like that, that look at the distribution of, um, Whether, you know, it can be like popularity or social media followings, or YouTube channels with, uh, with the most followers or, you know, uh, with crypto.

Um, you know, there's this, there's this distribution phenomenon that I think is very human, um, in which there's a few outliers, that stand  taller than most  market participants and then a long tail. Um, and so that's certainly played out on SuperRare and pretty much every, you know, like the rest of the, kind of the NFT space as far as I can tell.

Um, and you know,  it's not like we were trying to design it that way. Um, but if you look under the hood, there's, it's actually quite incredible the diversity of artists and  the number of artists that are able to make a living from crypto art and then like  the number of artists that are able to like, you know, say help, pay their rent.

Um, I actually tweeted the stat last week that I, ,found just kind of digging through our stats. In the past 30 days more than 114 artists had sold an artwork for at least a thousand dollars.

And that's, you know, that's rent in many cities in the rich world. Um, and so I'm really proud of that. And then, you know, if you look at Twitter, I talk to people in the scene. I mean, there's literally people who've, you know, left the city they lived in to go to the coast and bought a new house. And these are artists who are, you know, some of them like have day jobs or been able to leave their day jobs, due to this kind of emerging power of the digital art market.

Um, so yeah, pretty incredible stuff happening.

What are the things only digital art can do?

 

Jonas: Cool. So cool. What are digital art  characteristics that are only possible because they are on a digital art, like for instance, that clicking, uh, I think is one of the examples, but where could that go?  What else is out there and possible? What current kind of creative ways have you seen, um, to use this kind of digital artworks?

Jonathan Perkins: Yeah. Um, that's a great question. I mean, I think even just simply, you know, motion. The humble animated Gif uh, is still one of my favorite forms of digital art. We launched SuperRare with still images and Gifs.  If you have a digital frame on your wall, just having an artwork that lives and moves and changes, and has motion is pretty revolutionary.

Um, we added video support in 2019, and then we added support for 3d objects. Like vectorized 3d sculptures that can be made and, you know, kind of infinite number of ways. So now we have with video art, we have longer form animated possibilities with full stereo sound. Um, we're getting into really, really cool possibilities of multimedia, kind of like the second one you shared Rainbow sunset 

Jonas: Okay, let's that one. Then

Jonathan Perkins: okay, cool. Um,

Tripy yogi rainbow sunset

This is an artwork called rainbow sunset, by artist trippyogi  I would describe this as like a really pleasant, interesting to look at slightly psychedelic digital, like spinning rainbow sun on top of a shimmering ocean. 

Jonas: Yeah, I think that describes it really well. And then there's the sound also which kind of like spherical wavy sound. I don't know.

Jonathan Perkins: Yeah, so like a music track with really like, uh, again, slightly trippy, uh, like stereo sweeping music. Um, yeah. And this is an artwork that, uh, has gotten a few offers, has not sold yet. Um, and is currently  listing for about five ETH

Jonas: Which is a lot of money, still

Jonathan Perkins: Yeah, I like I can't afford this. For example. 

Jonas: I couldn't either. When you see such a price. Is that, um, a regular price for a digital artwork? I mean, do you have some context now to apparently, you know, trip, trip, yoga, Yogi, I'm not sure if you know all of the artists on your platform. I guess it's going to be tough to know all of of them.

Onboarding artists to SuperRare in the early days

Jonathan Perkins:  I did in the early days, when we started out, like, we literally just like hopped on the phone with every single person and chatted with them on video and stuff. Now there's well over 500 artists and, we're starting to onboard at a higher rate. Um, so that's not possible anymore, but, it's a tight knit community and if you're as embedded as I am, you get to know the cast of characters pretty well.

Rebirth of Venus by Lil Miquela

Jonas: Okay. All right, then let's go to the next one. I think this one will blow people's mind because it has a lot of different, uh, characteristics to it. 

Jonathan Perkins: Yeah, Totally. So this one's really interesting. And, uh, it's kind of invites a whole other host of questions about the metaverse and where the digital universe leading us. Um, so yeah, this artwork is called  rebirth of Venus.  And it's a kind of virtual self portrait by the artists little Miquela and Little Miquela is actually a virtual, um, person

Jonas: Wow, that's crazy. I loved how you said that. It's a, it's a self portrait. You really? Um, yeah, you really said it right.

Jonathan Perkins: Yeah. So, um, yeah, this is, this is really interesting for those of you that don't know. There's this kind of emerging. I would still call it experimental but emerging trend of kind of virtual, uh, influencers like CGI created like people who have opinions and missions and, you know, create stuff and create music.

And in the case of a little Miquela um, I think she was dreamt up by a team in Southern California and is like an online kind of activist and voice and. Has a huge, huge following on Instagram and puts out music and that sort of stuff. Um, and yeah, this one was really interesting. So we ended up chatting with the Lil Miquela team and thought it would  be really cool to try out doing like a charity auction, like a kind of like a SuperRare drop for charity.

Um, And yeah, this dropped like a month ago or a few weeks ago.  I think my co-founder John said it best. He was like, this is a great metaverse  experiment Um, so it's like digital art being dropped by a digital person in a digital art market.

And yeah, so  she broke the record for highest artwork sale in USD terms. Um, so this sold for about $82,000 three weeks ago and all that money went to black girls code is a non-profit teaching girls to code.

Who are buyers of digital art?

Jonas: Oh, okay. That's amazing. And, um, we have talked about artists and now a lot about the artwork as well, but who are the people who buy this kind of artworks? Do you see like a common thread going through all these people who have so much money to spare on digital art?

Jonathan Perkins: Yeah, no, that's a great question. Um, and again, I mentioned my dad earlier, his just like in disbelief, ,that like, you know, SuperRare is doing about a million dollars every month in volume. So artists are earning hundreds and hundreds of thousands of dollars a month. And that begs the question of who are these collectors doing this.

Yeah, I mean, it is a range. We have a truly global community.   Some collectors are totally anonymous, so it's, it's hard to know who they are. Uh, some are, are not, they're very vocal and very communicative and present. As far as looking for common threads, I would say, you know, a younger generation that's looking for kind of like what's next in art?

Um, obviously into technology, probably into the idea of decentralization and peer to peer.  And in the early days where we still are you know, this is built on Ethereum, we still transact in in Ether Um, and so, you know, many of these people are people who probably have large crypto holdings that appreciated a lot in the past five, ten years.

Um, and you know, if you think about that it might be easy to say like, Oh, well that is just, it's like a fad that it's just being fueled by the rise in price of Bitcoin and ETH. But I wouldn't write it off that fast. If you look at the history of the art market, say in the United States in the early 20th century, mid 20th century, when the United States art market was, was kind of trying um finding its voice and there's a lot of collecting happening, you know, people were collecting from.

Uh, from overseas in Europe. And then I think in like the forties, fifties, it really started to do more  with U.S. Artists. That was fueled by wealth created and the industrial revolution. Um, so, you know, John D Rockefeller Jr. and his wife created the New York MoMA. You know, that's the son of the wealthiest man in the world, uh, from the John D Rockefeller from the oil boom you know, the Carnegie's.

And so there's this whole generation of people who went rags to riches completely unprecedented wealth. And we're kind of seeing a digital version happened with that, with the rise of crypto. Um, and I think we're going to see a kind of circle out. So it's not just crypto as far as, like, if you think of like younger people who are making money primarily in digital ways.

You know, there's like Instagram personalities and YouTube personalities and celebrities that are just making a living online. It's like very natural for them to be gaining wealth online. Um, there's the rise of like e-sports. So we now have like, you know, teenagers and, and, uh, people in their twenties, you know, earning multimillion dollar figures for e-sports tournaments.

So I do think there's like the next circle out might be this, this broader, circle of digital wealth. Um, and then again, it's, it's not just like super, super wealthy people. I mean, the average price, the average artwork price on SuperRare has gone up over time. Uh, it's certainly not as high as that. Um, Lil Miquela piece went for. The average price is about a thousand dollars.

I think there's this kind of middle segment again, there's like the long tail. Of collectors. And I think if you looked at like the average collector, it's probably looks like somebody like us, like probably has a day job, you know, makes okay money, but, has a little bit of extra money to, to invest in and play around and stuff.

Jonas: Well, you, you are the co-founder of the platform so it's not like you have a regular job, right? You  a fast growing startup, to manage and a potential of a big, huge upside, I assume.

Jonathan Perkins: I wish I had more time to, to appreciate it and collect art.

Jonas: yeah. Okay. So you, but you have some art as well. Uh, obviously you bought some art well Okay.

Jonathan Perkins: Yeah. I'm a collector.

How tied are you to the platform?

Jonas: Okay. And how does that actually work. How much is it tied to the platform of SuperRare If you buy an artwork there?

Jonathan Perkins:  Yeah, one really important thing about NFTs is that they're, um, they could really live anywhere, on the Internet or on Ethereum.  The artwork like the token is an onchain assets, um, just like a Bitcoin or an Ether and if SuperRare one day completely go down or servers crash and like the website was no longer there. If you bought an artwork, you still literally have the same token minted by the artist and you can go sell it on another marketplace. You could sell it peer to peer with somebody. And so it's not reliant  on SuperRare servers or anything like that. And I think that's a really important piece because if we were say, just authenticating.

Artworks and creating entries in our database. And as you know, selling the artists was selling them for $10,000. That like, that obviously creates huge counterparty risk and all the crypto people's alarms would go off. So. I think it's a really important piece to underscore, like we're providing a platform for artists to mint and we do our best to be the best place to do that and be the best place to collect and the best kind of market mechanics.

But these are totally open. Like once they're minted they're totally open kind of blockchain assets.

SuperRare royalties. How artists participate long after the sale

Jonas: um, one thing that I think is really interesting is, uh, you offer a resell commission to artists. If you buy an artwork and then resell it to someone else on SuperRare the artist can still benefit from the appreciation of price of the artwork. Does that work even off the platform? Would that also work? Is that kind of like a smart contract? Or, yeah, I really literally don't know how that works.

Jonathan Perkins: Yeah, for sure. That was one of the things that we included, in our original launch. We didn't have many features, but, the artists commission or it's colloquially called royalty, on secondary sale where the artists will get a 10% of that commission if sold on SuperRare. And we really thought that was  a truly revolutionary  concept, because you think about, you know, the kind of quintessential story or tragedy of the art market is. Oftentimes an artist and his family don't see much you know, the upside of the success of his artworks and then, you know, say  sold an artwork for a thousand dollars.

And then 25 years later, it sells a Christie's for, you know, a hundred million dollars or something like that. And the, the artists of the family get nothing. And so the, the really, really cool thing I think about Ethereum and about smart contracts is that you can have this kind of programmable transaction.

And again, this would happen even if SuperRare totally went away. That's coded into the smart contract. And as to your question of whether it's kind of industry standard, or across platform ,  it's currently not. So that those, secondary sale royalties happen. If the artwork trades on SuperRare but again, I don't think it's really possible to enforce like truly enforce. And it was actually funny, like when we were launching in 2018, there was kind of a swirl of hype around crypto art and NFTs. And many people were like, Oh, well, you know, it's not enforceable.

So like, why would you do it? And we were like, well, that's dumb Like we can do it. And like, people on the platform are getting royalty, isn't it, it really, really worked and we were the only ones to do, you know, like any platform in the space were the only ones to do it. And a lot of people were just kind of like saying Oh, it's not like Bulletproof.

You know attack proof kind of like Bitcoin ,  sort of mentality. But we were just like, well, it's something, it's a starting point. And then within the past year, it's kind of become standard amongst other crypto art platforms. Like everybody does it now.

Secondary market artists get a cut of the sales

Jonas: Oh, really. Okay. That's so cool. And the stats on the SuperRare website say like the secondary market value was around a million so far, so 10% of that would go  back to the artists. That's amazing.

Jonathan Perkins:  Yeah, there have been cases where the artwork appreciated so much by the secondary sale, that the royalty brought more money to the artist than the original sale.

Jonas: Okay. Yeah. Yeah, I can see that. 

Jonathan Perkins: Yeah. So that's, that's, that's pretty cool to see. And then you literally, like, if you're the artist in that case, you, you literally like wake up and you have a thousand dollars and you get an email about it. Like, that's a pretty sweet email to get.

Jonas: That's crazy, but, um, does that just like automatically pay out to you on your like Ether wallet or when you say you get an email first, is that there's something the person has to do to kind of collect the royalty? 

Jonathan Perkins: No, it's, it's, it's instantly paid out as part of the same exact trends. I have the exact transactions, exact block. Um, so the emails just says like, Hey, this happened.

Jonas: Can you a little bit elaborate on the economics of the SuperRare platform also from a business point of view, you are a startup.

How many people work there? Like, is it profitable? Is it, um, You know, like kind of those juicy numbers.

From $90,000 a year to millions a month

Jonathan Perkins: Yeah, the whole space, including SuperRare has seen,  really incredible growth in 2020.  From April 2018 to, you know, the one year mark the entire market volume was $90,000.

 And at the time we were kind of like, Hey, $90,000 of art sold on our experimental art market, like that's kinda, that's kind of amazing.

Jonas: In 2019,  almost a hundred thousand dollars in one year and then

Jonathan Perkins: yeah, and fast forward to 2020, we were starting to do about a hundred K a month in volume. So artists started selling, you know, $100,000 a month of art and then It's 10 x since there. So now the past three months or so we've broken over a million dollars in sales a month.

Um, and, these numbers are tiny compared to anything in  the traditional art market and the number of users is extremely tiny compared to numbers of other kind of social  web platforms. Um, but yeah, as far as our team, we've also grown quite a bit this year for a long time.

We were like extremely small and scrappy team. We've been able to hire some folks this year.  We're about 10 people now and we're hiring. So if you are interested hit us up go to our website and, uh, find our Twitter and say, hi.

Jonas: What kind of people are you looking for? Engineers?

Jonathan Perkins: Yeah,  we're looking for passionate, creative people.  We're very heavy in engineering, design products, um, community.

Jonathan Perkins Bio

Jonas: cool. And Jonathan, I think that's a good place also to ask you a little bit about your bio in a very quick way. Like, what is your background? How did you end up, um, in the digital art market? You mentioned before  you are a musician, you have a background also in art.

Um, can you give us a short snappy  bio?

Jonathan Perkins: Sherylls do um I think the common thread through my career has been creativity and technology. So I'm a musician and I've always played in bands. I'm a drummer. I went to college in San Francisco and studied digital media arts. Caught the entrepreneurship bug and taught myself to code after college. Did a couple of startup experiments in San Francisco and ended up moving to New York and was just working as a software engineer. Along the line fell down the Bitcoin rabbit hole, like around 2013. And got pretty into Ethereum when it came out in 2015. And my co-founders and I, who are incidentally, my cousins, um,  we're all living in Brooklyn around the time Ethereum came out. 

Short history of digital art on Ethereum

And we would get together on the weekends and spitball all and, and, uh, always talked about doing something and yeah in 2017 obviously there was like the big run-up in prices. But one thing that really stood out to us was the launch of Cryptopunks, for those not familiar, Cryptopunks is a pioneering, art on blockchain project. It's a series of 10,000 computer generated punks. So like little avatars, like really cool looking artworks each one is a token on Ethereum.  And so this predated the NFT standard that came later. We thought that was really cool. And like, we you know were talking about that and talking about a rare Pepes which is actually a predecessor and even earlier,  there has been this kind of like tinkering, uh, underground art movement happening on the blockchain.    Later in 2017 crypto kitties launched which is more of a game, but, you know, technology wise very similar. And you know, by the time crypto kitties had already launched, we had already been working on a early prototype of what would become SuperRare and yeah, we launched in April, 2018.

Why did you believe in digital art?

Jonas: But, I mean, that's quite, you have to really looking far into the future to believe at that point that digital art. I mean, I think everybody was talking at that time. Hey, what will be the first thing? Those NFTs, uh, in video games, right? Um, I dunno, collectibles like digitizing  baseball cards, but you guys were like, no, no, no.

Let's put something more abstract. I mean, art. Well, let's put that on the blockchain. How did that happen? What was the thinking behind that?

Jonathan Perkins: Yeah, you have, you have a good memory, you're exactly right. And in 2018, when we launched people were like, we talked to investors and other people in the space, they'll be like, Did you say art? Like, like what, like what are you guys doing? Like, do you hate money?

Like what, like, why would you like clearly? NFTs are for gaming.  Um, and we were just like, no, we think this art thing is cool.   Obviously games are enormous, enormous industry, but each game is, is still kind of niche and you have to really believe in the studio that made it. if you're into crypto kitties, you have to really be into the thing that this company is making themselves. And like, that's kind of like how games work obviously And if you look at platforms like Instagram, the power of Instagram is truly that it's a platform.  You don't really care about Instagram or Facebook or whatever. Like you could hate Mark Zuckerberg, but if you follow Beyoncé on Instagram, you're consuming stuff that Beyoncé made.

And it's cool because Beyoncé made it. And if we can bring even a percentage of what this dynamic is that, um, has brought like billions of people on to Instagram and  these media platforms. Then  this can be like the most mainstream blockchain application.

And that, that was kind of the inspiration for it.

 How does one become a financially successful digital artist?

Jonas: Hm,

that's interesting. And how does one become a financially successful digital artist? Let's give some tips for the artists listening out there.

Jonathan Perkins: I would say be authentic, embrace the new media.  You know, some people speculate that once the traditional art people figure this out, it's going to be all over for these early adopters. And I don't think that's true at all.

  you know, If you look at people who are really successful on YouTube. It's not people who are really successful on, on cable networks. It's a completely new medium. 

I think you have to promote yourself more. Like we had talked about before,  if you could get into a gallery and then you kind of had it made and people sold your stuff.

  It is  kind of akin to being a band or musician these days, where you have to be touring and putting stuff out all the time and starting conversations and putting your personality out there because it really like you said, it's about the art, but it's also hugely about the story and about the person behind the art.

So yeah, let the story shine through.

SuperRare as a gatekeeper

Jonas:  Ethereum um, crypto in general is very permissionless.

That's one of the core values. What I understand from SuperRare is as an artist, I cannot just sign up and I'll just put up my artworks there. You act in that sense as a gatekeeper at the moment. I feel like you want to get rid of that and make it possible for everyone.   Is that right? And if so, how do you get there?

Jonathan Perkins:  Yeah, you're exactly right. SuperRare started out very exclusive you know, like I said, in the early days we were  manually kind of interviewing  and onboarding people to be creators.    Now we're adding people at a higher volume, but there's still pretty big limitations  on how many people we can add over time.

Before talking about where I think it's going, I'll just explain like why that's the case. And so it's easy to say, Oh these jerks they're, you know, trying to exclude these poor artists that just want to make money.  There's a couple of things going on.

One is that the whole premise of SuperRare is that it's authentic art, like genuinely created by the creator. You see it listed there and whose wallet you can see, you know, like verify on Etherscan um, and and there have been a few experiments in the NFT space where the barrier to creating NFTs is completely removed and you can literally go create NFTs based on anything you want.

And. It turns out unsurprisingly that people see it as a money minting opportunity and they'll just  find other people's cool art and create an  NFT about it and trying to sell it. And there's this problem with fraud. 

    The number one most important thing in this space is to to grow it and bring more collectors in when we started out, there was almost no collector market.

You know, artists were kind of collecting from each other. And there is the sense of  what are you trying to sell me here? I can just download this JPEG. There's no market for this stuff. Like why would I pay money for this silly token?

  Our hypothesis from the early days is if we maintain a focus on authenticity that you're, yes, this is crazy. It's kind of like buying Bitcoin in 2011 or whatever. But if you like help them understand that this is really revolutionary, this is really genuine. Like you can talk to the artists, they literally mint they took Metamask themselves and like minted this artwork Then you can get a foothold of a real market.

And I think without that focus, we wouldn't have gotten a foothold and there wouldn't really be a real market here. 

  uh, We're working on doing a number of design changes to scale the platform make it more personalized, make it more curated. So once we make several changes to the platform later this year, then I think the ability to onboard artists at a much higher rate will be, will be possible.

SuperRare as a Gatekeeper follow-up

Jonas: Hmm. Um, but you still have  to decide, we let this person on yes or no, it's not like everybody can just become an artist, right? There will I guess always be this kind of gatekeeper functionality, just like a gallery does our museum has to do. I can not just walk into a museum and say, Hey, this is my artwork.

Jonathan Perkins: yeah. I mean but it doesn't always have to be us, you know? It is a tricky problem to solve, but if there are ways to do it , you know, say there's guests or there's areas that are like authenticated by this curator or you know, like it doesn't always have to be the team that's building the software.

Like  What we really think we're good at is giving tools to artists and collectors, helping connect people. We're not claiming that we think we're the best curators or anything like that.   we're we really trying to foster an ecosystem where, many, many different types of art and tastes can flourish.

And if you think about a platform like Spotify I can listen to heavy metal on Spotify. And then you know, you can listen to piano, jazz on Spotify, but Spotify is neither a place for heavy metal or piano jazz. Like it's, it's, it's a place to go find what you want and connect with the types of art you want to experience. 

Jonas: Okay. So, also with a recommender recommender function    I'll see the stuff  that I like and other people will see stuff they like, et cetera

Jonathan Perkins: yeah. Yeah, absolutely. So  there's a lot to build. But I certainly think this space is going to become truly enormous. And so there's going to be room for many, many different  types of art. That's gonna, I think, continue to surprise us. Yeah.

Talking about cool crypto art projects

Jonas: So let's jump into the new segment on this podcast. I asked Jonathan to make a little bit of room for, for ideas. What could be built, what could be cool. What have you seen that kind of like inspired you that we could talk about?

Jonathan Perkins: Yeah, for sure. I'm happy to be a Guinea pig on the new new segment and I love it. Yeah. So first you know, you mentioned kind of like what what other projects do I find fascinating in the space or like other, you know, people doing really cool stuff?

   In our immediate space there's a platform  called async art.

Which is really, really interesting.  Is kind of similar to SuperRare but all the art is programmable and interactive. And so each one has different layers. They call them like layers and a master.   Um, so there's actually several tokens per artwork, even though it's all one artwork.  The person who owns each layer can push a button on it and then the artwork for the whole audience visually changes. So there's kind of this like ownership participation.

  There's an async token made by Matt Kane that changes based on the volatility of the price of Bitcoin.   I think the URL is volatility.art and yeah, so the artwork like responds and changes in all these like really interesting visual ways based on that.

   We've talked a lot at SuperRare too about enabling art that's um, code-based where, you know, say you can have an artwork that changes in a random way every time it changes hands.

So you can collect it, but It's going to look different by the time it's in your wallet. And then it's a surprise, you know, just stuff like that.  

Jonas:  Okay. Wow. That's really 

cool. That's really cool. 

Virtual worlds

Jonathan Perkins: Yeah, and then other stuff I think what's happening in the virtual world space is super interesting. There's been this kind of Cambrian explosion of um, virtual worlds powered by NFTs you know, Decentraland and Cryptovoxels Somnium space there's, there's a bunch and you know, there's some overlap with gaming, some overlap with VR some overlap with crypto art.

Jonas: Is that What do you, you mentioned earlier you, you said that word,  meta state or meta, what was that Metaverse that has to do with that? Right. That's kind of connected.

Jonathan Perkins: Yeah. So I don't know if it originated from here, but there's a book in the early nineties called snow crash  it's kind of about the metaverse and  it's just this like virtual kind of like second life. So second life, if you're familiar with that it was a game uh, from the two thousands that you know, where people have an avatar and walk around and have this like second as the name implies. And, it got pretty popular, but didn't really take off and last and one thing that may be different now is that like I said, there's, there's scarcity and the ability to have value in these worlds. And so, you know, Decentraland and I think they're the first one I heard of anyway, like they did a huge ICO and additionally sold land.

And the idea is that like, If the world gets adoption, then the land is going to have a lot of value. So it's just like, if you could buy land in New York city back in the day, you're going to, if you hold a lot of it, you're going to be doing pretty well because everyone wants to be in New York city. 

  What's really been wild is seeing that kind of like symbiotic relationship between these virtual worlds and the crypto art market.  Um,  I think they're  mutually beneficial because these developers started making this virtual worlds and then all of a sudden you have these buildings with nothing on the walls.

And in the early days of SuperRare we have all this art, but like no walls to hang them on, so to speak and on the internet. And so this phenomenon started happening where artists and collectors were going to Cryptovoxels, Decentraland and Somnium Space and these places and building galleries and like tweeting about the galleries and stuff.

And, and for a while on our team were like, Oh, wow, there's something really going on here. Like there's real community. Building on it and kind of experimenting with, with galleries in the virtual space.

Jonas: So you walk in that virtual world and then you have a virtual wall, and on that virtual wall is virtual artwork.

Jonathan Perkins: Yeah. And like we do virtual exhibitions all the time. So we have a museum in Decentraland that's a seven story space that we do events and parties and virtual exhibitions   

Jonas: And do you own the like is SuperRare owning that space in Decentraland or how's that working? 

Jonathan Perkins: Yeah, , we know the team pretty well and they were keen on making kind of like an arts district. So they were super generous. I think it's like technically on loan. And yeah, that's how we made that happen.

Jonas: So what was first there in Decentraland, was it art or porn?

Jonathan Perkins: That's a good question.   Actually Cryptovoxels was the one that really took the crypto art world by storm. If you haven't seen it before, it's visually inspired, I think by Minecraft. So it's like, this is pixelated 8-bit kind of like 3d like visual space. And I think that it was like, just kind of like a under the radar project. This one developer named Ben Nolan like coded it up himself.

Jonas: no ICO, 

like that?That's crazy. Sometimes one person has like, kind of this great influence over all the other projects is

Jonathan Perkins: yeah. And then, you know, it can be a community can form around it and it's off to the races. It's pretty cool.

Jonas:  Okay. So you really think about this metaverse I haven't really dug really deep into that. I think that should be maybe the next stop

Where can people learn more about SuperRare?

Maybe you can give you know, like a little shout out or instructions for people who listen, what should they do to follow you? Where, where they could dabble , in digital art. Maybe if they're interested in that.

Jonathan Perkins:   For sure. Um, if anyone's interested in learning more about SuperRare. Our website is SuperRare.co and you can also follow us on Twitter at SuperRare  check out the artworks. You can easily sign up with an Ethereum account get started collecting and place some bids and dive in and it's a really vibrant community. Also on the website, you'll find the link to  our discord server. That's the best place  if you want to really learn more and chat with people in the community and chat with us uh, hop in our Discord and say, what's up. 

Jonas: Thank you so much. Jonathan, 

Jonathan Perkins: Oh, thanks so much for having me on as a good convo. Good chatting with you. This is super fun. All right. Can I just close this or does it need to upload or

Jonas: I'll just close. And then it will automatically upload Adam.    Oh, you're still here. That's cool. Do you want to play a game? Choose between one, two or three. Just imagined a number in your head. Okay. Did you pick your number? Okay, ready? If you have imagined one. Please go to Unforkable.cc and sign up for the mailing list. 

If you have chosen to number two. Go to Apple podcasts and leave a glowing review.  

And finally, if you have picked number three, Go to cryptovalley.jobs and check out the jobs that are currently available on the site. You can also sign up for job notification if you're interested. So thank you for listening to the end. I really do appreciate it. See you the next time.   


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