Quantifying NFT-driven networks in crypto art

Abstract

The evolution of the art ecosystem is driven by largely invisible networks, defined by undocumented interactions between artists, institutions, collectors and curators. The emergence of cryptoart, and the NFT-based digital marketplace around it, offers unprecedented opportunities to examine the mechanisms that shape the evolution of networks that define artistic practice. Here we mapped the Foundation platform, identifying over 48,000 artworks through the associated NFTs listed by over 15,000 artists, allowing us to characterize the patterns that govern the networks that shape artistic success. We find that NFT adoption by both artists and collectors has undergone major changes, starting with a rapid growth that peaked in March 2021 and the emergence of a new equilibrium in June. Despite significant changes in activity, the average price of the sold art remained largely unchanged, with the price of an artist’s work fluctuating in a range that determines his or her reputation. The artist invitation network offers evidence of rich and poor artist clusters, driven by homophily, indicating that the newly invited artists develop similar engagement and sales patterns as the artist who invited them. We find that successful artists receive disproportional, repeated investment from a small group of collectors, underscoring the importance of artist–collector ties in the digital marketplace. These reproducible patterns allow us to characterize the features, mechanisms, and the networks enabling the success of individual artists, a quantification necessary to better understand the emerging NFT ecosystem.

Heterogeneous rarity patterns drive price dynamics in NFT collections

“…Previous studies include an overview of the overall market, trade networks, and visual features of NFTs, and their impact on price prediction 9 , as well as of the underlying technologies, such as the blockchain and the smart contracts, with a risk assessment 26 . Other research has focused generally on specific marketplaces or collections, analysing such issues as the determinants of success of NFT artists 27 , the role of social media attention 28 , the creators-collectors network 29 , and the financial advantage of experienced users 30 . Along this line, research also suggests that NFTs have become a promising investment as a fintech asset 31 .…”

Non-Fungible Token (NFT) in the Academic and Open Access Publishing Environment: Considerations Towards Science-Friendly Scenarios

“…Ideally, the science-related and science-friendly publication infrastructures and service providers should not wait too long with NFT developments; Vasan, Janosov, and Barabási (2022) diagnose that "first movers" will have a clear advantage, such as in value growth. Moreover, otherwise commercial providers could take over the field and drive up the cost of NFT creation similar to other modern services, such as open access publishing.…”

How rarity shapes the NFT market

“…Previous studies include an overview of the overall market, trade networks, and visual features of NFTs, and their impact on price prediction [9], as well as of the underlying technologies, such as the blockchain and the smart contracts, with a risk assessment [25]. Other research has focused generally on specific marketplaces or collections, analysing such issues as the determinants of success of NFT artists [26], the role of social media attention [27], the creators-collectors network [28], and the financial advantage of experienced users [29]. Along this line, research also suggests that NFTs have become a promising investment as a fintech asset [30].…”