NFTs as the future of digital entertainment
PRIOR to the pandemic, barely anyone knew of non-fungible tokens (NFTs). These digital assets — like bitcoin and ether — are traded using blockchain technology. But unlike cryptocurrencies, they are unique (hence non-fungible).
NFT art and gaming items use digital certificates to authenticate rare online assets and track their movements. This concept, a novelty for most people, has seen an influx of activity from artists and gamers who have learned to utilize the technology to their advantage.
NFTs gained mainstream awareness thanks to the Beeples of the world, whose digital artworks were auctioned off for millions of dollars. Local artists, too, have capitalized on this new venue for selling their work, albeit at more modest prices.
“Having a marketplace where digital art could be traded like physical art is a crazy idea, honestly. It’s awesome to have an exchange of value for your art,” said Peter Corazo, a Cebu-based artist known online as xlvrbk (pronounced Silverback), who sells his 3D and virtual reality (VR) pieces as NFTs on the blockchain.
With guaranteed ownership and authenticity, plus a purely digital nature, NFT art attracted people like xlvrbk, who then found communities in Twitter and Discord. These digital spaces, tight-knit and constantly up to date, gave artists options outside the traditional industry path, with art collectors directly contacting artists online.
GAMING SCHOLARS
On the gaming side, the Philippines became a hotspot for blockchain-based games due to people seeking out alternative income during the pandemic. In a play-to-earn game called Axie Infinity, players purchase NFTs in the form of pets called Axies, which they use to win battles and reap items that can then be traded or sold for Ethereum.
A rise in demand in early 2021 triggered a rise in prices, making it more expensive for new players to join. Enter Yield Guild Games (YGG), a decentralized autonomous organization that invests in blockchain games and NFT assets, and loans out Axies to “scholars” who want to learn to play and eventually earn.
NFT earnings from these scholars are split three ways — among the scholar (70%), Yield Guild (10%), and the community manager who recruited and trained them (20%).
As of mid-August, YGG reported that its scholarship program had 4,600 players, coming mainly from the Philippines, Indonesia,
India, Venezuela, Peru, and Brazil. Earnings rose to the equivalent of $3.26 million in July, the highest monthly earnings thus far.
INTERACTING LIKE ‘IRL’
NFT communities in the Philippines are being integrated into their “traditional” counterparts.
This May, Art Fair Philippines dedicated an entire section to NFTs, acknowledging the growth of the country’s crypto community. The online edition of the event gave crypto artists a platform to share their thoughts on the development of NFT art.
During the fair’s run, digital artist xlvrbk organized a Filipino crypto VR art show: “It’s easier to organize compared to real-life shows because the logistics are way easier. We had about a dozen artists and a really fun opening night where people showed up at the VR space and interacted with each other, sort of like an IRL (in real-life) gallery,” he said via e-mail.
Both events made up for the inability of artists and art enthusiasts to come together at physical fairs and real-life galleries due to quarantine restrictions. The digital space, with all its innovative possibilities, gave people the chance to browse rooms filled with installations, paintings, pictures, and videos.
A downside to this art scene, however, is burnout. At the fair, the conversation among crypto artists touched on the importance of self-marketing and socializing online in spaces like Narra Art Gallery, an NFT art hub co-owned by Colin Goltra and YGG’s Mr. Dizon, in order to sell their art.
“Putting yourself out there, sometimes that kind of pressure can get to you if you’re not used to things like that,” said Michelle “Shelly” Soneja, an art director for mobile and blockchain game studio Altitude Games, who got into NFT art in 2020. “There’s so much new technology every day, every hour.”
ALTERNATIVES AND OTHER APPLICATIONS
People who want to mint assets — or create NFTs — have several blockchains to choose from. Minting fees, known as gas fees, can cost P2,000, according to the crypto artists on the Art Fair panel.
While Bitcoin and Ethereum are well-known blockchain networks, alternatives like Tezos, Polygon, and Polkadot charge less for minting and have a smaller carbon footprint.
“Just by relative scale, (Tezos) consumes — some estimates put it at — two million times less energy than Ethereum to conduct the same kinds of transactions,” said Marissa Trew, marketing manager of TZ APAC, a Singapore-based blockchain consultancy firm, who explained why “Proof-ofStake” blockchains like Tezos are more energy efficient than their “Proof-of-Work” counterparts in a B-Side episode.
Though NFTs received widespread attention for art with million-dollar price tags, it’s everyday artists and gamers who are keeping the community alive by turning to the digital space to make a living. YGG went beyond play-to-earn gaming by opening its own market, allowing members to trade digital assets.
By encouraging financial literacy, many have become entrepreneurs themselves by learning to trade assets or find the right timing to invest, said Beryl C. Li, YGG co-founder, in a B-Side episode in July.
For Ms. Trew of TZ APAC, which has invested in the Tezos ecosystem in the region, the blockchain has potential for business-to-business transactions like licensing, supply chain management, and invoicing.
“NFTs have utility far beyond being a digital asset. There’s a large enterprise use case that’s being developed,” said Ms. Trew. “There’s a lot of actual B2B use cases that NFTs are able to provide well beyond the creator economy in the digital space, in terms of music, art, and collectibles.”