Our friends at the FT Tech Tonic podcast have produced a fabulous sceptic’s guide to crypto series, and for the latest episode on non-fungible tokens they sent producer Josh Gabert-Doyon to the industry’s bizarrely untroubled New York jamboree this summer. We just couldn’t resist asking him to write up a dispatch from the bowels of NFT.NYC.
Despite a monumental crypto downturn, the mood was joyous at the world’s largest NFT conference in June. Smiling JPEG speculators, who had paid $849 (fiat dollars, please) for last-minute registration at NFT.NYC ambled through the tourist-filled streets of Midtown Manhattan and gazed upon the oversized crypto ads that flashed on Times Square billboards, all without a worry in the world.
The blithely enthusiastic NFT community kept the party rolling with a four-day fever dream of cocktails, cold croquettes and yachts. With a staggering 1,500 speakers, most sessions at NFT.NYC lasted just 5 or 10 minutes long, enough time to pump whatever you were selling from the top of a Marriott ballroom before scrambling offstage.
So what exactly makes a party so good that it can continue rocking even as stablecoins destabilise, Bitcoin crashes through key price benchmarks, crypto lenders freeze withdrawals, and the average price of NFTs plummets by more than 70 per cent?
A rousing performance by Ja Rule on the first night of the conference certainly helped lift the mood. The rapper, of Fyre Festival fame, took the stage for an after-party, presumably held to celebrate good long-term financial health and the shining prospects of the buoyant NFT market.
“Where all my degens at? Where my fucking degens at?” Ja Rule shouted at the crowd of frat boy lookalikes. Downstairs, catering staff cleared away steaming, stainless-steel troughs of sliders and onion rings. “You know when the markets down it’s time to buy,” he told the crowd before launching into his next song, which was performed in front of a screen advertising NFT thoroughbred horse race betting.
— Knights of Degen (@knightsofdegen) June 21, 2022
In some respects, gambling is the easiest for the NFT community to square the circle and to keep the party going. Why even bother to pretend that a market based around highly volatile speculation and bright-coloured pictures is anything but a casino? After all, passengers looking for entertainment aboard the Titanic were eligible to enter daily sweepstakes where they could gamble on the number of miles travelled.
At the conference the following day, a four-piece brass band toured the Marriott and periodically broke into New Orlean-style jazz, attendees were introduced to “Ape Poker”, NFT-designed playing cards, and a talk titled “Horse Racing NFTs: Bridging Traditional Sports with the Metaverse”, which was hosted by sports super-agent, racing horse owner, and wheeler-dealer Kia Joorabchian.
Conference-goers were happy to announce that you don’t lose until you sell. Instead, they were on the hunt for new revenue models, which has become a fixation of the NFT community. The reality is that beyond being a speculative digital “asset”, even the NFT market hasn’t really figured out what NFTs are good for.
Take, for example, some panel highlights:
“How to Thrive as a DAO after a Founder Rug Pull”
“Moms and NFTs: How to Engage these Powerhouse Creators for NFT and Product Growth”
“NFTs Are Now Collateral For Secured Loans: Are You Legally Protected?”
“Empowering Your Child to Thrive in the NFT Space and Fly Above Bullies”
“Understanding the Value of Tokenized Real Estate”
Jodee Rich, the co-founder of NFT.NYC, is best known as the founder of the company One. Tel, an Australian dotcom bubble disaster. One. Tel has enlisted big-ticket investments from Lachlan Murdoch and James Packer, both sons of newspaper moguls hoping to prove themselves with a smart tech investment. They were both members of the board at the time of One. Tel’s collapse and were subsequently involved in a decade-long court battle over the liquidation.
Unsurprisingly, Rich was pleased to have some eye-catching names at this year’s NFT. NYC. “I was delighted with the session I had yesterday with Kimbal Musk where he announced at our event an extraordinary application for NFTs — where the NFT contains code that controls a drone swarm that paints art in the sky,” said Rich, referring to the younger Musk’s Nova Sky Stories project launched last week. Why a drone swarm would need to be hosted on the blockchain is unclear and mildly alarming.
— 𝙺𝚒𝚖𝚋𝚊𝚕 𝙼𝚞𝚜𝚔 🤠 (@kimbal) June 22, 2022
On the third night of the conference, two separate yacht parties were held side-by-side at a Hudson River pier. Aboard one of the yachts an NFT collection called The Whitelist held an event to celebrate a new NFT launch and their recent purchase of a lower league basketball team.
Jordan Norwood, a Whitelist co-founder and ex-NFL player who wore a large, diamond-studded Super Bowl championship ring, told FT Alphaville that The Whitelist NFT holders are currently in the market to buy a large multi-unit rental property in Mexico, with the hopes of running it “almost like a timeshare”.
In other words, another good sign of the longevity and responsible financial dealings of the NFT market.
For all the partying at NFT.NYC, a deeper, nagging feeling lurked beneath the surface: NFTs might pull through, but even the most optimistic may lose their soul in the process. If the dream of NFTs was for a decentralised creator’s economy, free from the claws of Big Tech and digital privacy concerns, the direction of travel at NFT. NYC seems worrying.
Rather than being an escape from the platform gods, the Andreessen Horowitz-backed marketplace OpenSea has become the JPEG agora of choice and, notably, a large presence at the conference. The NFT crowd increasingly relies on OpenSea for revenue and copyright arbitration (as well as occasionally having their data hacked by phishing scammers).
MetaMask, run by the Microsoft-backed Consensys, have an onboarding chokepoint, while Coinbase and Polygon labs, both backed by Silicon Valley big dogs Andreesseen Horowitz, have managed to intermediate the crypto dream of disintermediation.
And then there are the so-called “blue-chip NFTs” who hold massive sway over the community, inspiring countless rip-offs. Namely Doodles, steered by a slick former Billboard CEO with the creative support of Pharrell, and Bored Ape Yacht Club (BAYC), who held its own ApeFest the same week as NFT. NYC, hosting Eminem, LCD Soundsystem, The Roots and a real-life Snoop Dogg (as opposed to the impersonator sent to NFT.NYC).
Doop Snogg https://t.co/tLy3vAhmqn
— Snoop Dogg (@SnoopDogg) June 22, 2022
The BAYC collection looks likely to survive the current downturn (its Otherside metaverse land sale earlier this year was the largest mint in NFT history) and concentrate market power with its own kind of streetwear cringe.
Kevin McCoy, an early internet artist and Bitcoin enthusiast, was inspired by the anarchic, anti-hierarchical possibilities of the technology and enjoys the unofficial title of “NFT inventor”. But his early optimism seems a long way off now, he admitted to us.
What was so surprising to me about the rise of NFTs was the fact that the platforms became so important so quickly. And it doesn’t take a particularly keen insight to see that platforms as a new form of gallery, the new gatekeepers.
Just as FTX has bailed out crypto lender BlockFi and rivals circle Celsius, the NFT market looks primed for market consolidation. Small flea market collections will die, and the big brands will take over. The parties are about to get a lot worse.
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