How do traditional artists get rich through crypto art?

Author: Different NFT, Odaily Planet Daily

The rapid expansion of crypto art has attracted numerous artists and collectors. They possess unique insights and a professional pursuit of content, developing their own logic and judgment in the appreciation and selection of crypto artworks.

The veil over crypto art has yet to be truly lifted. What role does crypto art play in the transformation of traditional artists? And how do collectors view crypto art in this market?

In this issue, we invite the largest NFT collector in China, Cao Yin, and cross-media contemporary artist Cheng Zhuo, to discuss the practical issues of traditional artists transitioning to crypto art.

This episode audio

Traditional Artists VS Collectors

Part:1 How do traditional artists engage with crypto artworks?

Cheng Zhuo: I was one of the earliest creators of 3D animation in China, starting in 1991. Later, I began working in venture capital, and since 2014, I returned to cross-media art, which includes installation images and crypto artworks. So now I am a cross-media contemporary artist.

As an artist, I have always been quite attentive to international art and the dynamics of the international art scene, and I also pay attention to the intersection of art, technology, and philosophy.

In 2019, there wasn't much awareness in China, and for artists, this was a new way of creation, a new medium, and a new field.

I originally planned to hold a solo exhibition in 2020, and after discussions with them, I decided to use this form for a series of artistic creations.

There was also a chance in early 2020 when I met Song Ting, an artist who was among the first in China to create crypto artworks. We hit it off immediately. She mainly collaborates with AI to create crypto art, and I happened to have a similar idea, so I utilized her AI team to collaborate on my fourth exhibition series. Each piece represents humanity, while AI represents AI consciousness. However, AI is not our slave; it is our assistant. I believe that this series should not be replaced by AI.

Part2: How do traditional artists understand the collection of crypto artworks?

Cheng Zhuo: Many people have talked about non-fungible tokens (NFTs) now.

For example, if you have 10 yuan, it is just 10 yuan. There is no difference between the 10 yuan with serial number 1 and the one with serial number 2; they are all 10 yuan, and no one cares about the serial number when they give you change.

But if you spend 10 yuan to buy a crypto artwork, it actually has an identity code. The piece with serial number 001 and the one with serial number 002 are not the same; they are inherently different because they may have been generated on-chain and have variations. They possess participation, irreplaceability, and uniqueness.

To put it simply, using language that the public can understand, it comes down to understanding this nature.

For artists, it is like a new type of paint, a new canvas, a new creative medium.

Part3: Will the creative form change for crypto artworks?

Cheng Zhuo: Yes, it will. If I want to create simply, I can just take a photo of an oil painting and put it on-chain; that is the simplest form of crypto art.

However, that itself is not a new method; it is just a certification of the original work. It is not an exploration of a new art form.

I still want to emphasize that crypto art has its own logic and characteristics, so I choose to collaborate with AI, which must involve some core technological integration at the content level.

In my view, if we categorize current crypto artworks into several major types, the simplest or lowest level is directly putting works on-chain, whether it is a video or an oil painting, turning it into digital art and then putting it on-chain; this is the lowest level.

The second level is the creation of crypto art itself, which is inherently computerized or created using computers, so it is directly a form of crypto art, and then it is put on-chain; this is the second level.

The third category involves the dialogue between humans and artificial intelligence, which belongs to the exploration of AI technology.

The fourth category is code-based, purely using software code for artistic creation.

The fifth category involves crypto art and blockchain's underlying logic, where the public can also participate, generating works on-chain.

Part4: What are people's views on the classification of crypto artworks?

Cao Yin: There are various forms, such as performance art, which can be grouped with behavior and performance, as well as fashion, decorative art, architectural art… actually quite a lot. Various forms will emerge.

From the perspective of art categories, even if these arts involve the logic of whether to use encryption, it is still direct. For example, if you put a piece of music directly on-chain, it essentially achieves an IP effect.

Cheng Zhuo: Artists should be more sensitive to new things and possess a spirit of exploration or innovation, rather than just following trends.

When you follow trends, I estimate that the work will likely become something that trends toward popularity rather than truly being at the forefront. This is also why I admire Park's explorations.

Part5: Will crypto art be an opportunity for modern artists to gain fame?

Cheng Zhuo: I think for traditional artists, it really provides them with a great sales method. Because previously, it was indeed very difficult for them to sell.

Since the rise of people like Beeple, many have started to sell their works, or people have begun to accept an image, even though I can save it anytime, but once it is on-chain, it has its unique value, which is definitely a good thing.

As for my works, they require more investment than general creations, whether in terms of creative input or technical time investment, so we set the prices for these works relatively higher.

Two of my video works were selected for the Asian Crypto Art Exhibition curated by Qiu Zhijie and have been exhibited at the Times Art Museum. From the perspective of artistic creation, I feel recognized, so I am quite happy about that.

Part6: The Collector's Journey

Cao Yin: Because we are originally in the cryptocurrency circle, we actually followed the crowd into it early on.

In 2017, when crypto artworks first emerged, I personally was the type to try out any new thing, and during the process of trying and playing, I would decide whether this thing would become important in the future.

For example, like DeFi and Cosmos, we approached it this way.

We first created, bought, invested, and experimented before drawing conclusions, using practice to test the theory. So at that time, we just started playing along with everyone else.

Of course, after the two major bear markets in 2018 and 2019, many investors left the circle, but we had nowhere else to go, so we persisted in this circle and also began to pay attention to crypto art in 2019.

At that time, SuperRare had just emerged in 2018, and we started to focus on it in 2019, beginning to collect on SuperRare.

The early crypto art circle was very small, and no one paid attention to it, or everyone didn't take it seriously. We believed that this thing would definitely become important and popular in the future.

So we systematically collected a batch of early works from artists on SuperRare that we thought would be representative in the future.

At that time, we collected a batch of works created using CS tools, which looked very exquisite.

There were also some traditional artists who used methods similar to oil painting mapping, digitizing their oil paintings or physical artworks, and then re-creating them digitally.

I collected an artist, a young girl from the Philippines, who is an oil painter. She digitized her canvas oil paintings and then re-created them digitally on top of her oil paintings before destroying the physical ones.

We felt that just collecting wasn't enough participation, so we invested because I myself am an angel investor in crypto assets.

I talked to these platforms one by one, and if I felt the team was capable of growing, I would invest in them. When no one was using them, we used them; when no one was investing, we invested.

Later, beyond crypto art platforms, we began to delve deeper into areas such as curatorial platforms, galleries, creative tools, crypto art funds, and real estate in the metaverse, engaging in a series of equity investments related to crypto art.

Initially, SuperRare not only had few collectors but also had another issue: there were few researchers. Nowadays, we refer to those who write art critiques and curate as few. At that time, we voluntarily helped SuperRare and MakersPlace by writing critique articles and sharing our collection insights and views on crypto art, as well as categorizing specific artists.

Everyone was exploring their accustomed and proficient styles through creation, and the market was also exploring the styles and types of artists that it favored through collection.

But at that time, there was none of that, so we early on helped these artists and platforms with some taxonomic and typological work.

Jiu Gu: Do you collect physical artworks as well, Teacher Cao?

Cao Yin: No, we draw a clear line with the real world.

Part7: Is it for profit or a genuine love for collecting crypto artworks?

Cao Yin: Actually, it’s both. Asset allocation is certainly part of it because we have long approached crypto art collection from the perspective of asset allocation.

I told some friends back in 2020 that digital asset investors should allocate at least 5% to 10% of their assets to crypto art assets, and another 5% to 10% to Metaverse real estate. This is similar to how people allocate assets in the traditional world.

For instance, someone like Wang Jianlin invests heavily in contemporary art, and they are also approaching it from the perspective of asset allocation. I believe he probably doesn’t have the time to personally select or view these works; it’s also from the perspective of asset allocation. That’s one aspect.

The second aspect is that our Digital Renaissance Foundation is not a purely investment institution. We actually started from cooperation with the Estonian government, helping them promote the entire digital citizen ecosystem, which we call E-residency.

This is a truly online digital identity system that was established in 2017, and it has a strong value-oriented approach.

So, my work with the Digital Renaissance Foundation and crypto art has the same purpose: to help people in the digital world establish a new sense of identity that does not belong to their previous identities.

No matter what country you were from, what religious beliefs you had, what values you held, or what gender identity you had, in the digital world, you can.

We hope to help everyone establish a completely different identity that you want to become. So at that time, we focused on collecting crypto artworks, persisting when others had already left the field.

When others looked down on SuperRare and these crypto artworks, we were willing to play along, even though the prices were not high at that time, we were willing to spend time playing with them.

The reason we invested in them was that we felt crypto art, besides the role of being a new tool and medium shared by Teacher Cheng Zhuo from an artist's perspective, also has another important function from a collector's perspective: it represents a new value proposition and a new identity symbol.

We have a saying in the collector community:

You are what you have collected.

You redefine yourself by what you collect.

So, we collect these crypto artworks, share them, and help these crypto-native artists with thematic creations. This is also a starting point to help everyone establish their own crypto-native identity.

For me, on one hand, it is asset allocation; we believe it will definitely see a thousand, hundred, or ten-thousand-fold increase in value in the future. At the same time, we also see it as a value identity proposition.

By collecting crypto art, we become advocates, helping the crypto community reshape its independent identity, a crypto-native identity, because I only recognize my identity in my own crypto world.

Part8: What are the criteria for choosing crypto artworks?

Cao Yin: I actually categorize my purchases of crypto artworks into two types.

One is a specific type for my own collection, which has some themes, and the other is when I think an artist is cool and their works are beautiful, so I collect them.

This is a more casual, spontaneous, or impulsive type of collection; both types exist.

For example, as Teacher Cheng Zhuo mentioned, works that are called Digital Native are definitely an important type.

Then there are those created specifically with digital tools, which can only be created in digital space, such as 3D or smart contracts; these are certainly important types, including works trained by artificial intelligence, known as generative works.

Another type includes works with clear values and identity propositions. For instance, I consciously collect many works from artists in third-world countries, such as those from the Philippines, Nigeria, Uruguay, Brazil, Venezuela, Kenya, and also from Thailand and Indonesia.

These artists often have very strong regional characteristics, and in their own countries, they may be marginalized individuals.

For instance, I collected a Nigerian artist who is a member of a minority ethnic group, a Catholic, a male homosexual, and a poet.

You know, these four identities make him a marginalized person in his community, a marginalized person compounded by marginalization. He is particularly distressed. From the perspective of his works, he is an outstanding creator, but such individuals have no opportunity to be noticed by the media or public opinion in their communities.

They also face media scrutiny and have their own political correctness, so such individuals can only be noticed in the digital space, in the crypto world.

Crypto art can accommodate these individuals because we crypto people are originally a group of marginalized individuals. We are also marginalized in our own world; we are marginalized in China, just as they are marginalized in Africa. This is a kind of shared feeling among the marginalized.

Cryptographic technology originates from grassroots decentralization, or we inherently have a strong anti-centralization value. Therefore, we are willing to embrace those who are not accepted by the traditional world.

Or we collect and promote those crypto artists and their works to oppose the traditional world, so I intentionally support such individuals.

I also search for works with female themes, feminist themes, and LGBTQ community themes—these works come from their own native world and value systems. We will collect them, but the premise is that their works must be excellent and outstanding enough.

Another type I collect includes those that have formed typologies, which are essentially styles or genres that can form a type.

For example, I would collect works from the crypto pop movement, and in the crypto world, I would collect works similar to neo-expressionism.

Forming typologies is important because it can categorize them into a certain lineage in art history, meaning they have essentially become recognized as part of the canon or have been accepted as such.

I would also collect such works, but not just to collect for the sake of it; it is just that they have already become part of art history or will become part of it in the future.

Part9: How to judge the reasonableness of the price of crypto art collectibles?

Cao Yin: The valuation of artworks has always been a mystical subject. Just like you see now in the major auction houses in China and Hong Kong, many works that are auctioned off may not seem worth the price.

If there are a few pieces you particularly like before each auction, you might think they are excellent, but the final auction results may not meet your expectations; they might sell at the upper limit of the initial auction estimate without exceeding it.

However, there may be works you thought shouldn't sell for that much that end up selling for a sky-high price. This is the nature of art valuation, art trading, and art collecting.

The most interesting part is that it often surprises you.

There is indeed a gambling mentality involved here, but this process is also like when you spot an obscure artist that others overlook, and you quietly collect many of their circulating works. Then, in five years, or perhaps shorter in the crypto art world, maybe in two or three years, they suddenly become popular.

That feeling brings you immense satisfaction, so I think the price is subjective.

If you appreciate an artist and believe they deserve to be recognized by more people worldwide, then you should buy their work at any price.

So, it is difficult to determine a fair market price for a piece of art. Every artist is unique, and every piece is unique to the artist.

How can you compare a unique piece or a unique asset with other unique assets?

So, you can only say that there might be a price range within a larger typology, but for each specific piece, it ultimately depends on your expectations for that artist's future and your psychological expectations regarding the price of that work.

When both come together, the price emerges.

Jiu Gu: Earlier, you mentioned that you bought some works very cheaply. I want to know, have you sold any of them so far?

Cao Yin: I haven’t sold a single piece.

Jiu Gu: When will you sell?

Cao Yin: When will I sell? I think when an artist's creative career comes to an end, I might let go of some of their works. Actually, I collect works more because I genuinely appreciate the artist, so I collect their works.

Collecting works is important, but supporting the artist through the collection and establishing a relationship with the artist through the works is what I value more.