What do artists owe collectors?
If the NFT community were an extended family that met occasionally for holiday dinners and special events, utility would be the topical equivalent of politics and religion that people might try to avoid in order to keep things civil.
The word has sparked countless discussions in the space in recent months, and the outcome of those conversations will likely answer a crucial question facing the Web3 world: what does an artist who sells NFTs owe the people who buy their work?
The answer to what utility means is more simple and interesting than you might think. But to get to that answer, we need to understand the basics of what the NFT tool is, why people are so excited about it, and what the future holds.
So, what exactly is the NFT tool?
NFTs that come with utility (and not all do) give holders of these digital assets access to exclusive rights, benefits and privileges. Does that sound pretty broad? It’s probably because it is.
The beauty of NFTs is that this tool can vary as much as the human imagination. For example, when photographer Tim Flach partnered with Atlas Labs to release a set of NFT photographs of the Spix’s Macaw, a species declared extinct in the wild, the team offered collectors a chance to attend an event involving their release back into the Brazilian rainforest.
Other projects have taken the concept of utility to astronomical heights (literally) by using NFTs to send humans into space. But most NFT projects that offer aggregator utility exist closer to ground level.
When it comes to PFP NFT projects, buying an NFT in the collection often comes with some pretty appealing benefits (or tools). Collectors are often first in line for upcoming airdrops, they get access to exclusive IRL events, and NFTs even allow fans of TV shows and comics to have a say in the IP’s creative direction. Projects with a clear focus on utility often include clear roadmaps for where the development team intends to lead the community. These can also outline how and why the holders’ NFTs will retain and grow in value.
And why does the NFT tool matter?
Flach and the Atlas Labs team did not have to offer this utility to collectors. However, the unique utility the project offered—that is, allowing collectors to see birds released into the wild—helped raise awareness of NFT collecting and encouraged people to purchase the NFTs.
But why buy utility NFTs, instead of trading for artistic value, alone? Rather than simply lending financial support to a conservation project, NFTs gave owners a chance to be more intimately involved in what the team was doing. In short, an NFT’s tools can help individuals feel like they are contributing meaningfully to a project.
For other NFT collectors, utility is essential because it allows them to connect with other like-minded people. In this regard, NFT ownership for some members of the NFT community is not about literally owning a unique digital file. It is the sense of community and camaraderie that comes with it. For such individuals, digital meetings, live events and related aids are all important.
The NFT toolkit
But the concept of utility has split a deep rift in the NFT ecosystem. For some collectors, the simple fact that NFTs can be useful makes them expect it, almost without exception. Others believe that society should not pressure artists to deliver utility, and claim that art itself is the tool.
But this binary is false, and the range of opinions the community has expressed about the NFT tool is a pretty good reflection of the diversity of needs that NFT projects have regarding it. Utility is simply not a one-size-fits-all dynamic that a single camp can praise or condemn.
Some NFT projects guarantee utility
Bored Ape Yacht Club is one of the quintessential NFT projects out there. Owners of Bored Ape NFTs have received a number of benefits for buying into the collection, including access to exclusive merchandise, permission list access to the Bored Ape Kennel Club and Mutant Ape Yacht Club airdrops, both of which have become highly valuable collections in their own right due to the success of the NFT main project from which they originate.
Yuga Labs, the company behind BAYC, also reserved 45,000 packs of digital land from the BAYC metaverse Otherside for collectors. Getting free (or almost free) airdrops of NFTs from successful projects before they go on sale to the public is a bit like getting free money, and when the project in question is BAYC, it’s not a small amount of money either.
This is the nature of most PFP NFT projects – they are digital collectibles that tend to focus on building hype and a community base and then rewarding that base for buying into and holding onto their digital assets. And while no one is saying that the artwork behind PFP projects isn’t unique or doesn’t require talent to create, it’s unlikely that anyone will buy into these collections just because they like how they look. Without the tool, BAYC would not be as successful as it has become today, for example.
And that’s okay. It is also reasonable for a collector to expect benefit from such a project, especially if the project’s developers communicated that clearly from the start.
But projects and their followers don’t always have the best and clearest communication, and assumptions abound. Someone who bought into a high-utility PFP collection one day and then bought a 1-of-1 artwork from a digital illustrator might assume that the latter would give them as much utility as, say, the former. In an age of cryptocurrencies and non-fungible crypto-art, digital assets are investments above all else, right?
Well, not for everyone, least of all the artists who have taken to NFTs to build successful careers and receive proper remuneration for their work.
The case against mandatory NFT tools
“We are the tool, we made the art, we never quit, we put all the hours into building the art you love so much,” wrote well-respected NFT community member and photographer Isaac “Drift” Wright in an April tweet. “We are not here to make money, we are not pfp projects. We are long-term investments, not a quick flip.”
Drift is a well-known photographer in the NFT community who came out strongly against the demand-for-use attitude when the debate flared up online earlier this year. His words speak of the difference in utility dynamics between PFP projects and artists presenting their work in NFT format. Cath Simard, another photographer in the NFT space, echoed these thoughts when she responded to tool advocates by saying, “The roadmap is ME. The tool is my ART.”
Both artists present the age-old argument that art does not need to have any utility or function to be of value. After all, Jeff Koons’ giant metal sculpture Balloon dog (orange) sold for more than $58 million, and it’s doubtful that the owner of that piece is complaining that it can’t do tricks.
And yet there are voices in the NFT community who believe that this is not a valid argument and believe that utility is an inherent characteristic of the NFT format. If artists don’t want to be accountable to their “investors” in this way, they argue, they can simply sell their work elsewhere and in a more traditional format.
There are several problems with this idea. First, there is no rulebook that says any art presented as an NFT must include utility, and any claim to the contrary originates in a rather sinister and justified implication that is inappropriate for the NFT community.
NFTs have given artists a more direct and efficient way to find proper compensation for their work. Technology is beginning to change the static, hierarchical and often impenetrable dynamics of the traditional art world that have kept so many artists from gaining exposure or finding success. In fact, these are the exact reasons why so many have celebrated the advent of the blockchain. The creative economy finally had a new way to flourish.
But for collectors to applaud a technology that better enables artists to make a living through hard work one moment and then turn around and act like those artists owe the collectors a debt just for using that technology is obscene. Likewise, automatically labeling NFT collectors as “investors” is loaded and misleading rhetoric crafted in the commodity language that reinforces ugly Web2 paradigms.
Should artists (and projects in general) be clear about what (if any) benefit they plan to provide to people who buy their work as NFTs? Absolutely. Should collectors assume that all NFTs will come with utility and thus feel entitled to it? Absolutely not. The NFT ecosystem is a two-way street between artists and collectors, and both must be understanding, empathetic and direct.
Utility is not a switch you turn on and off. Many projects walk the line between giving collectors art for art’s sake and also giving them utility.
For example, Sir Anthony Hopkins’ first NFT project leans heavily into a high-concept theme represented in some outstanding digital renderings that incorporate his work as a bona fide painter. The artwork is visually stunning and took a team of artists at Web3 creative studio Orange Comet a significant amount of time to produce.
But Hopkins’ NFT project also benefits collectors, such as giving owners of the rarer items in the collection autographed merchandise and even a chance to have brunch with the actor himself. Hopkins is a cultural icon if there ever was one—he might as well have said, “the art is the utility,” and left it at that. But he and the Orange Comet team clearly felt that a hybrid model would work best for their project.
What worked for Hopkins may not work for another NFT project, even a similar one. Utility is a customizable utility, not very different from clothing. You wear what you like and what works for you. But complaining about people for what they wear (or don’t wear) is pointless, arrogant and borders on harassment.
The NFT community is still in its infancy, but it is notorious for infighting. And while members could certainly benefit from a reminder that so much of the internet (and especially Twitter) distills complex and nuanced topics into unhelpful catchphrases and soundbites, the discussions people have there are mostly healthy and necessary. Web3 is a new, dimly lit room whose edges have not yet been mapped. These discussions help people feel around the walls and get their bearings.
That space will take definite shape as time goes on, and the utility debate will subside. With any luck, people will look back on these discussions and wonder what all the fuss was about. One day it may be a given that NFTs can have any tool you want – without grasping the idea that they don’t necessarily need it.
