SuperRare co-founders explain how the merger will shape the future of NFTs
The Ethereum merger is still fresh. Not even a month has passed since the second largest blockchain switched from an energy-intensive proof-of-work validation mechanism to proof-of-stake, which lowered energy consumption by 99.5 percent.
But the context makes clear the extent of this change. In the summer before the merger, Ethereum consumed nearly 60 terawatt hours (TWh) per year, which was roughly on par with the country of Uzbekistan’s annual energy needs. It also meant that the blockchain had a carbon footprint comparable to that of Azerbaijan, emitting approximately 33 megatonnes (MT) of carbon a year.
Take a look at the graph below. See the part of the line that dips to the bottom? That is the effect of the September 15th Ethereum merger. Ethereum now uses approximately 0.01 TWh of energy per year, putting it below PayPal in terms of annual energy consumption. Given that one of the main concerns with blockchain technology (and, by proxy, NFTs) was directly related to its environmental impact, the conversation about the future of the NFT ecosystem in a post-merger landscape has become far more sustainable and thus productive. Likewise, the merger has opened up a crucial discussion about how society reacts to new and disruptive technologies.
The atmosphere of condemnation coalesces
Much remains unanswered. And while it’s still too early to say for sure how the merger will affect the Web3 landscape in the long term, some have begun to see hints of what its immediate effects might be.
“It’s a complex problem, and it’s easy to misunderstand how things work,” said Jonathan Perkins, product manager and co-founder of SuperRare Labs, in an interview with nft now. “I agree that most of the criticism was misguided and I believe most of the intentions [behind them] were good. I’m an environmentalist and I’m very happy that we could switch to proof of effort.”
Perkins, along with co-founder and SuperRare Labs CEO John Crain, are no strangers to controversy in the NFT space. After launching the SuperRare platform in 2018, the pair have seen the full range of criticism launched on the Web3 platforms and the artists who use them. Until the merger, these condemnations became increasingly cruel.
“We began to see […] artists being demonized and attacked in a very aggressive and kind of traumatizing way online.”
Jonathan Perkins
“We’re used to taking a lot of things on the chin, as a company in this space,” Perkins continued. “But what we started to see last year is artists being demonized and attacked in a very aggressive and kind of traumatizing way online. And that’s when we decided we had to take the gloves off and really come out and help clarify this . We basically said, ‘Say what you want about us, but leave the artists alone.’ I’m also a Bitcoin fan, but I think that from day one the Ethereum community has stood out, making this intention clear that we use proof of work in an interim phase to get this network up and running and prove the concept. But the goal [was] to become less energy-demanding. I’m pretty proud of the community for that.”
This is one of many examples of how the spread of misinformation online can have concrete effects on people’s lived experiences. Blockchain and NFTs have long been hailed as intrinsically pro-artist technology, which could help chip away at the demeaning “starving artist” trope that has haunted society for hundreds of years. The last thing creatives need is more unjustified stigma. Fortunately, the merger has done a lot to cut through these types of attacks.
Why merging optics is important for onboarding
The merger may be one reason why platforms such as SuperRare are seeing an increase in activity. Take away the biggest concern many people had about the Ethereum blockchain (justified or not), and you’ll find people who wanted to participate all along now finally feel like they can do so without a guilty conscience.
“It’s hard to know if it’s directly correlated with the merger, but we’ve seen an increase in transaction volume in recent months,” noted SuperRare Labs CEO John Crain while speaking to nft now. “I think the merger is part of it. There were people on the sidelines who read the headlines and wanted to wait until Ethereum was proof of stake before putting things on it.”
This increase in activity could be a bullish sign for the future of the Ethereum chain and the countless platforms and apps built on it. The SuperRare founders have also seen a general narrative shift in the NFT ecosystem, moving from a PFP and collectibles dominated ecosystem to a more inclusive environment that is more attractive to those in the art space.
“There is truly an artistic revolution underway. NFTs are a powerful foundational technology that is well positioned to be the foundation of digital art.”
John Crain
“In general, we’ve seen an uptick in activity,” Crain continued. “We’re starting to see real traction from the more traditional art community. And I wouldn’t necessarily attribute that to the merger. But we’re seeing world-class galleries and artists who don’t come from a Web3 background, but who see the power of the technology. It’s really a artistic revolution underway. It’s not just Bored Ape Yacht Club. NFTs are a powerful foundational technology that is very well positioned to be the foundation of digital art.”
Decentralization in a proof-of-stake system
Proof-of-stake validation is not without potential problems. For example, the possibility of censorship is still a problem, and it works like this: The fewer validators there are in a system, or the larger the stake pool a validator controls, the more centralized the network becomes. This situation has led some to fear the possibility of bad actors pushing validators to censor the Ethereum protocol.
Acknowledging the need to be on the lookout for such censorship, Crain and Perkins advocated for more people to join as validators, to ensure a robust ecosystem. They also spoke to the whispers of SuperRare itself becoming a validator among the members of the SuperRare DAO.
“There is a lot of interest from people in running a validator that a community is built on top of [Ethereum] platform,” Crain said of SuperRare DAO members’ desire to join the proof-of-work validation system. “As a councillor, I would certainly support such a move. It’s good for the whole ecosystem, it would be a good use of ETH sitting in the community treasury. It seems like a very logical next step that the DAO could run a validator, maybe even more than one validator.”
Decentralization has always been a moving target in the Web3 community. The conversation around when to build decentralization into tangible rules in Web3 platforms versus when to use it as a broader guiding principle is unlikely to stop anytime soon. The SuperRare marketplace itself has been a compelling case study over the years in trying to find and maintain this balance.
The platform has long had a reputation for curatorial exclusivity, but it has also done what it can to get out of the way and give control to users whenever possible. When the platform was launched in 2018, the founders decided that they would relinquish editorial control over what artists on the platform posted. Instead of letting artists contact the platform via email with pieces they wanted to stamp, Crain, Perkins and SuperRare’s third co-founder, Charles Crain, let artists create whatever they wanted without any approval process.
“There’s this kind of inherent polarity in crypto art,” Perkins observed of the decentralization dichotomy. “In the first few months of running the platform, we envisioned that within 12 months we would step out of the way as gatekeepers and there would be AI algorithm curators filtering the art. It was pretty obvious that we needed to grow to scale [first]. So we put in place the least bad method of curating, to have a phone call with artists who wanted to come on the platform and add a few per month to kind of scale up with the number of collectors that were.”
“We are trying to increasingly delegate important parts of the power structure to society.”
Jonathan Perkins
According to Perkins, this was a natural and necessary step to build up the platform so that it could later become more decentralized.
“As a startup, we’ve done things that don’t scale, and I think our approach to exclusivity is one of them,” Perkins elaborated on their approach to building the platform over the years. “And the reason is that we wanted to help create a healthy collecting market. We never had an explicit desire to be exclusive, it was more of a necessary stepping stone. And what we’ve proven is that collectors respond to curation and authenticity.”
The creation of Spaces was one way the company attempted to step out of its role as a centralized gatekeeper. Spaces are independent galleries in the marketplace that curate, promote and sell art, with each gallery voted into the network of SuperRare DAO members. The pair reiterated that not all aspects of centralization are bad, and emphasized the need for balance in view of the Web3 ethos.
“There have been projects that promise and try to complete decentralization on day one,” Perkins said of the importance of a slow approach to the matter. “And it often doesn’t work because of coordination issues. We were about three and a half years behind us when we officially became a DAO. We had customers, we had a lot of artists and collectors, and we had a kind of product-market fit as a startup. And increasingly we see ourselves as standard bearers in this area. We increasingly try to delegate important parts of the power structure to the community. I think it’s still important to be a strong voice rather than just go out and cause chaos arise.”
Optimism about the future of NFTs
Ultimately, the two are hopeful for the long-term health and impact that NFTs seem to have. Bear markets and crypto winters aside, Perkins and Crain have confidence in blockchain’s ability to become a widespread, everyday part of people’s lives.
“We’ve been building on Ethereum for five-plus years,” Perkins emphasized. “NFT volumes are down from a USD perspective, but we actually continue to see really strong collector activity on SuperRare. [The merge] gives me much more confidence and we all sleep better at night. There is a feather in the cap of this infrastructure. I met an artist this weekend, a self-proclaimed digital artist who has never stamped anything because he didn’t want to jump on the bandwagon too soon. I think there are many who are waiting to see if this technology will prove itself, whether for environmental reasons or otherwise. And the more concrete steps we can take towards scalability and sustainability, the more activity will fall into the gravity well.”
