A day spent in the NFT world can often feel overwhelming. Things are constantly changing, and the technology is evolving at an unprecedented rate. But if you are interested in exploring the space and you’ve got to start somewhere, why not start at the top?

There are some crucial lessons we can learn from looking at the most expensive NFT artworks sold to date. Although filled with the ‘usual suspects’ (think Beeple, Cryptopunks, PAK, Christie’s and Sotheby’s…) these records can actually give us a pretty broad perspective on some of the key trends in the NFT space today.

#5 Larva Labs, Cryptopunk #5822.

Sold for USD 23,700,000 (8,000 ETH) on 12 February 2022.

Trend: PFPs and status signalling

Deepak.eth/Larva Labs

Okay if you have never heard of Cryptopunks, I completely understand why you may be staring at your screen with a look of horror on your face. But let me explain why that pixelated image was sold for 23.7m dollars. Cryptopunks are a collection of 10,000 pixelated avatars, considered to many as the first NFT project ever created. Created in June 2017, it was one of the first use cases of the newly launched Ethereum blockchain. What is crazy is that they were originally given away for free to whoever was interested in the innovation that NFTs presented. Given this first-comer status, the project has become one of the most valuable NFT collections that exist today.

Cryptopunks are an example of ‘Profile Pic NFTs’ also known as PFPs. PFPs are collections of avatars (ranging from punks, to apes, to kittens) that collectors use as their digital counterparts, thus using them as their profile pictures on social media. Following the success of Cryptopunks, countless of PFP collections have been launched and continue to be launched daily. It is very questionable whether these collections can be considered Art, but it does demonstrate an interesting trend in the NFT space.

What this historic price and the growth of PFPs shows us is the importance of status signalling in the NFT world. Having a Cryptopunk as your profile picture on social media demonstrates one of two things. Either you were involved in the space early (as early as 2017) and therefore presumably a seasoned expert in the crypto space more generally, or you are extremely wealthy and therefore able to afford a Cryptopunk at the prices that they are being sold for today. This alone has justified the incredible prices that collectors have spent for Cryptopunks.

#4 Beeple, HUMAN ONE.

Sold for USD 28,980,000 on 9 November 2021.

Trend: Christie’s, Sotheby’s and the importance of showcasing NFTs physically

It is safe to say Beeple is a phenomenon on his own, one of the highest-earning artists in the NFT space and also one of the few that are slowly forging a career in the ‘traditional’ contemporary art world. Back in November 2021, a hybrid physical/digital NFT artwork by Beeple sold at auction for an outstanding 28.9m dollars. HUMAN ONE, is a generative sculptural artwork of a digital astronaut that is wandering across shifting environments.

So, what lessons can we learn from this exorbitant artwork sale? To begin, this artwork reflects a desire to showcase digital NFT art physically, a problem without a real and convincing solution. By creating a digital artwork with a physical showcase, Beeple presented a solution for his own art.

Another lesson is the influence traditional art world auction houses, particularly Christie’s and Sotheby’s have had in record NFT sales. Selling through these established auction houses seems to give the NFT world a sort of ‘art world validity’. What is ironic is that the NFTs sold at Christie’s or Sotheby’s tend to be sold to crypto-native collectors. Strangely, marketplaces already exist for these types of NFT transactions, and both buyers and sellers could save a lot from avoiding the big auction houses’ fees. It seems as though auction houses are currently filling the position of NFT tastemakers through first-mover advantage, but I wonder how long that will last…

#3 PAK & Julian Assange, Clock.

Sold for USD 52,700,000 on 7 February 2022

Trend: DAOs and crowdfunding

Pak, Clock. Via Crypto News.

The auction of the unique NFT artwork titled Clock by PAK and Julian Assange sheds light on one of the most interesting phenomena of the crypto space: DAOs. In simple terms, A Decentralised Autonomous Organisation, or DAO, is essentially a group of people that come together to pool funds for a common cause. All decision-making is decentralised among all members and the ‘rules’ established for the DAO are published on the blockchain.

What has made DAOs an unavoidable force in the space is the ease with which people are now able to fundraise together for a common cause. When PAK & Assange announced the auction of the NFT Clock, a DAO called AssangeDAO raised 52.7m dollars in a matter of days to purchase the artwork. Their mission is to free Julian Assange and the proceeds from the sale were donated in full to Assange’s legal defence.

Needless to say, the ease with which money can be pooled for a common cause through blockchain technology could have a revolutionary effect on the art world and the future of art collecting.  

#2 Beeple, Everydays: The First 5000 Days.

Sold for USD 69,300,000 on 21 February 2021.

Trend: The artwork that got us here in the first place

Beeple, Everydays – The First 5000 Days NFT, 21,069 pixels x 21,069 pixels (316,939,910 bytes). Image courtesy the artist and Christie's.

It is pretty likely anyone reading this has heard of this sale, as it took the art world by storm. The sale of Beeple’s Everydays: The First 5000 Days came quick and hard, like an unexpected slap in the face. How was it possible that an artist, whose name had never been heard before, was suddenly the third most expensive living artist at auction? This sale is probably the reason why I am even writing this column. It brought NFTs to the spotlight, globally and in all news channels, both within the art world and beyond.

But what does this sale teach us about key trends in the industry? Mainly that anyone who is paying exorbitant prices for NFTs today is bound to have a vested interest in the success of NFTs. What better PR stunt than announcing the sale of an NFT at 69.3m dollars? The NFT was purchased by the owners of a crypto and NFT fund called Metapurse, who had been investing in NFTs for a while and could only benefit from a record-breaking price that would bring NFTs to global fame.  

#1 PAK, The Merge.

Sold for USD 91,800,000 on 2 December 2021.

Trend: Fractional Ownership

Digital artist Pak's work, The Merge, fetched US$91.8 million on Nifty Gateway.Courtesy of Nifty Gateway

In first place is PAK’s The Merge, an artwork that sold for USD 91.8m during Art Basel Miami Beach week. But here’s the catch: PAK fractionalised the ownership of the artwork and 28,983 collectors participated in the purchase of 312,686 units of the artwork as individual NFTs. It is debatable whether this artwork can be considered one artwork or 312,686 unique ones, particularly if you compare it to the auction record for a living artist, namely Jeff Koons’ 1986 Rabbit which sold for USD 91.1m in 2019. Theoretically, a single buyer could purchase all individual NFTs into the single piece The Merge, causing the work to be widely considered the most expensive NFT artwork sold to date. But are we ready to accept an NFT is the most expensive artwork by a living artist, ever?!

Leaving that debate aside, this sale sheds light on one of the most exciting trends in the NFT space. The concept of fractional ownership of an asset, and the subsequent astronomical sums of money that can be pooled together, is an innovation that is bound to revolutionise the art world. Of course, you may argue that crowdfunding or partial ownership existed well before the NFT hype, but it is the ease with which this can be done that could really make it mainstream soon. It is a fascinating prospect and one that I believe we are bound to see growing in appeal amongst today’s contemporary artists and commercial art galleries.

Blockchain, what? is a monthly column on the LVH ART JOURNAL by Carlota Dochao Naveira exploring how crypto, NFTs and Web3 may revolutionise the art world.