When Christie’s made headlines for selling a US$69.3 million NFT, Sotheby’s was quick to follow suit and now it’s come round to Phillips, a less well-known, but no less significant auction house.
And after some 67 bids last week, Phillips popped its NFT cherry, with a US$4.1 million sale of an NFT known as Replicator by Michah Dowbak, better known as Mad Dog Jones.
According to Phillips, the US$4.1 million sale by Dowbak has set a record for a living Canadian artist, besting the previous high of US$3.7 million, set by photographer Jeff Wall.
While Christie’s auctioned a single work, a mosaic of images created by the artist Beeple, and Sotheby’s organized a sale of thousands of NFTs by anonymous artist Pak, Phillips opted for something a little more in the middle.
Although Dowbak’s Replicator is a single artwork attached to an NFT, it was designed to create more versions of itself as time goes on.
In an interview before the auction concluded, Dowbak explained,
“The idea of Replicator is of a tree branch, creating multiple timelines that are self-replicating on an exponential scale.”
Replicator, which is the first image of a copy machine, will create a second generation of six more, slightly different images tied to their own NFTs, and those images will create yet another, and so on, until seven generations have been minted.
Phillips estimates that the final count for Replicator will be around 220 unique NFTs, with the ambiguity deliberately baked into the piece because each generation is designed to randomly “jam” multiple times in order to stem exponential growth of the non-fungible token.
There’s also an interesting descending “print limit” for each subsequent generation, with the second generation only able to produce five new NFTs, the third down to four until the seventh generation which is sterile.
NFTs made headlines after Beeple’s record US$69.3 million sale, but investors looking into the space must also note that NFTs are closely tied to the fortunes of cryptocurrencies which are used to pay for them.
For instance, Beeple’s US$69.3 million work was paid for using Ether, even though most media quote the sale in dollars.
And the rise and appreciation of NFTs depends very much on who, and how much, cryptocurrency investors are willing to part to buy into this new branch of tokens.
Unlike initial coin offerings, or ICOs, many of which were nothing other than scams, the value of NFTs are in the eyes of their beholder.
But NFTs do have application beyond art as well.
Being unique digital representations etched onto the blockchain and therefore immutable, NFTs can be applied to real estate, affording greater security of title and making it possible to understand the provenance behind any piece of real estate.
But what the Phillips auction does demonstrate is that there is still significant demand for NFTs.
Starting at a bid of just US$100, Replicator very quickly landed at US$2.4 million within the first 24 hours of the auction.
And art collectors bidding on NFTs aren’t just digital doyens, with Phillips noting that of the 15 active bidders for Replicator, at least three were previously known to the auction house and had bid on physical artworks in the past.