With art institutions around the world gradually embracing Web3 over the past couple of years, whether that be by way of digital collectible drops, immersive exhibitions, or even their own NFT marketplaces, the big question is what 2023 will bring. Will institutions double down in the months ahead, avoiding — as much as possible — using words like “crypto” or “NFT,” and instead focusing on the real-world benefits of Web3 extensions for collectors, audiences, and investors?
In all likelihood, for Web3 initiatives to succeed in the cultural realm in 2023, the key will be the quality of their use cases and the distance that cultural institutions can create between themselves as the disintegrating “crypto bro” culture exemplified by the recent crash of FTX and cratering value of hyped cartoonish NFTs.
Quality Use Cases Are Key
With the exception of the already crypto-obsessed, most art lovers and collectors need to be wooed by cultural institutions if they are expected to invest in digital collectibles or other Web3 offerings — or drawn back into the fold following the 2022 “crypto winter.” Last year, a number of marketplaces and platforms rolled out efforts aimed at these ends, among them SuperRare, by way of its subscription service RarePass, which grants holders one NFT a month by a popular artist.
According to ArtNews, RarePass proved a hit, with the first 250 on offer selling out for a total of $4.5 million. The real use case here? Taking the guesswork out of what to buy, for less seasoned digital art collectors, and making them feel part of an arts community.
The community-building aspect of Web3 initiatives is a key use case for arts institutions and auction houses as well, with the added benefit of learning about the interests, habits, and long-term goals of buyers. One example of a platform that has this type of two-way benefit is Particle, which sells fractionalized shares of physical artworks as NFTs in a model that has been compared to “a kind of Web3ified version of Masterworks.” Aside from a bit of collectable ownership over well-known works of art, a key benefit for Particle users is a 25 percent discount on artworks sourced by Particle and sold at auction house Phillips.
This sort of “private club” access and all of the perks they entail will likely remain a popular draw for marketplaces as well as cultural institutions offering blockchain-based products in 2023. As Charlotte Eytan, the director of Particle Foundation, told ArtNews of the company’s goals with this sort of effort, “What we’re trying to do with our NFT community now is really focus on building and understanding our community,” adding, “We want to know who [our users] are and what they want us to provide. We wanted to see if our collectors, who are mostly into NFTs, want to become collectors of physical art, tangible pieces.”
Distance From the Crypto Bros
Another key factor that will determine the success of Web3 initiatives by cultural institutions in the next 12 months is how much space they can carve between these efforts and the broader, declining “crypto bro” culture exemplified by cartoon apes, widespread fraud, and overhyped NFT drops.
Real art-world cred can be a factor in ensuring this. Last year, MCH Group — the parent company of Art Basel — teamed up with the Zurich-based arts nonprofit LUMA Foundation to launch Arcual, a blockchain designed for the art world. Leveraging the name recognition of Art Basel, Arcual’s appeal hinged on trust, namely trust among buyers as well as sellers in blockchain-empowered art sales, authentication, provenance tracking, and royalties.
After a rollercoaster 2022, it is likely that the Web3 scene in 2023 will be a lot more muted, a lot more boring, but increasingly focused on building trust among consumers and regulators alike. This means we should see less splashy, hype-based Web3 initiatives, particularly among museums and cultural institutions, and more sophisticated efforts aimed at building a passionate base of collectors interested in the online as well as the offline.