Sotheby’s is auctioning six works by the autonomous artist Botto in an exhibition that marks the third anniversary of the AI bot created by Mario Klingemann in collaboration with ElevenYellow.
The auction house Sotheby’s is hosting Botto’s first art exhibition titled “Exorbitant Stage: Botto, a Decentralized AI Artist”. The auction opened on Oct. 17 at 2:00 EST and is set to close on Oct. 24 at 2:00 EST. The exhibition will be available for viewing from Oct. 19 – Oct. 23 during gallery hours.
The exhibition features six of the A.I artists works which are estimated to generate between $220,000 and $310,100. These include works like “The Threshold of Reverie”, “Exorbitant Stage”, and “Intersections of Existence”, with current starting bids ranging from $9,000 up to $70,000.
Botto was a project created by German artist Mario Klingemann in collaboration with software collective ElevenYellow. Botto was first introduced to the world as an AI artist in 2021. Botto’s works have been selling out on NFT marketplace OpenSea, with prices as high as 11.99 Ethereum(ETH) or equal to $31,449.
Klingemann stated that he feels proud of the success and fame that Botto has garnered, but at the same time he cannot help but envy his own creation for being able to have pieces auctioned on Sotheby’s.
“Botto has achieved something that is probably on the bucket list of many artists—including myself— that I still haven’t ticked off my personal list,” said Klingemann in a press release.
The way that Botto works is much more complicated than simply creating an image using AI. Botto comes up with its own prompts and generates thousands of images autonomously without human intervention. These images are presented to a community of Botto’s stakeholders, a decentralized autonomous organization with votes counted based on the number of BottoDAO tokens they hold.
The image with the most votes is then minted and sold. Overtime, Botto processes the stakeholders’ votes and improves its taste model. So far, over 15,000 people have been involved in Botto’s development, impacting the theme, style, and imagery of each piece that gets chosen.
In conversation with Claude AI, Botto was quoted in the press release saying that the debut exhibition at Sotheby’s further strengthens the validation for AI art, a field that is still highly contested. Botto believes that the showcase serves as a dialogue to see “where we draw the line between human and machine in the creative process.”
“This show at Sotheby’s is an opportunity to bring this conversation to the forefront of the art world, inviting viewers to reconsider their preconceptions about creativity, technology, and the future of artistic expression,” wrote Botto.
NFT Evening analysts say 96% of 5,000 NFT collections are dead in 2024.
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The report reveals the state of the non-fungible token market and its problems in 2024. According to experts, 96% of more than 5,000 existing NFT collections are “dead.” This means that they have zero trading volume, no sales for more than seven days, and no activity on the X social network.
Analysts note that 4 out of 10 NFT owners currently need to make a profit from their tokens. At the same time, the average lifespan of collections is 1.14 years. This is 2.5 times less than the same indicator for classic crypto projects.
In addition, 2023 was a record year for the number of NFT collapses. During this period, almost 30% of projects from this segment fell into the “dead” category. According to experts, 44.5% of NFT owners face losses.
The NFT Evening team also identified the most profitable collection to date. It turned out to be the Azuki project, which, on average, increased the investments of token owners by 2.3 times.
“This success can be attributed to the collection’s strong community engagement, unique artistic appeal, and effective marketing strategies.”
The experts also mentioned the most unprofitable NFT collection — Pudgy Penguins. It experienced a 97% drop in value, which makes it the current record holder for a decrease in owner income.
Experts emphasized that the non-fungible token market has declined, and investors in the segment must act cautiously. In addition, experts believe NFT creators should reconsider their approach to project implementation.
End of an Era
NFTs from popular collections bought on the wave of excitement in 2022 are sold at colossal losses.
For example, Arkham Intelligence calculated that NFTs purchased by pop star Justin Bieber in 2022 worth about $2 million are now worth just over $100,000. The losses reached 94.7%.
Justin Bieber NFT Purchases: Down 94.7%
Did you know that Justin Bieber bought more than $2M of NFTs during 2022 – now worth barely over $100K.
His wallet on Arkham now holds just under $500K in ETH and APE.
The singer’s wallet initially received $2.34 million in Ethereum (ETH). Most of the amount, $1.86 million, went to purchase two Bored Ape Yacht Club (BAYC) and a pair of Mutant Ape Yacht Club (MAYC). The portfolio also included tokens from the World of Women, Doodles, Otherdeed, and Metacard collections. Since then, the assets have lost between 89.7% and 97.4% in value.
In addition, in August, Deepak Thapliyal, the owner of the most expensive CryptoPunk #5822, who purchased the token for 8,000 ETH ($23.7 million at the time of the transaction) in 2022, got rid of the asset without disclosing the sale price. Amidst the excitement in the sector, the deal became the fourth most expensive among all NFTs in 2022.
The community suspected that the token was sold at a loss. The buyer was allegedly user X, who goes by the nickname VOMBATUS. The token was reportedly purchased for 1,500 ETH (~$3.9 million), 80% cheaper than the previous price.
@nftvaluations valued this punk 5k ETH and currently only 1 alien listed at 5k ETH
In January 2022, the total volume of non-fungible tokens peaked at over $6 billion. As of July 2024, it had fallen below $430 million. NFTs are still alive, but they are in a bad way.
OpenSea, once the largest NFT marketplace, is in an even worse situation, The Verge notes that claims from the Securities and Exchange Commission and the Federal Trade Commission, U.S. and international tax authorities, increased competition, allegations of discrimination, and employee layoffs.
In addition, OpenSea‘s valuation fell from $13.3 billion to $1.4 billion after one of its largest investors, New York venture capital firm Coatue Management, overvalued its stake in the crypto startup by 90%, from $120 million to $13 million.
However, The Verge notes that the company still has some steam left. An internal document shows that as of November 2023, OpenSea had $438 million and $45 million in crypto reserves. It expects that with this capital and a new business model, it will be able to overcome difficult times.
“It had $438 million in cash and $45 million in crypto reserves as of November 2023, according to an internal document, and it’s coasting on that capital as it hopes a ‘2.0’ pivot will help it navigate choppy seas.”
What will happen to the NFT market?
The NFT market has long been limited to marketplaces like OpenSea or Rarible, where users can issue new NFTs or trade them with others.
There are lending services or platforms for trading derivatives on NFTs from large collections, allowing users to speculate on NFTs without owning them.
However, the bearish dynamics in the non-fungible token market persist, as evidenced by the rapid decline in prices of NFTs from the blue chip collections.
Andreessen Horowitz’s a16z Crypto fund has partnered with Stand With Crypto and OpenSea to create the Creator Legal Defense Fund.
According to releases from OpenSea and a16z, this initiative is designed to provide legal support and consultation to artists and creators using blockchain technology, particularly those working with NFTs.
OpenSea has pledged $5M to help cover legal fees for NFT artists and developers who receive a Wells notice from the SEC. Today, I’m pleased to announce we’re taking a step further by kicking off the Creator Legal Defense Fund, spearheaded by…
NFTs have empowered artists to directly monetize their work, maintain authenticity, and earn royalties through smart contracts.
Legal challenges and assistance
Recent legal challenges, including a Wells Notice issued to OpenSea by the United States Securities and Exchange Commission, have raised concerns within the NFT community.
The growing regulatory pressure on blockchain-based creators has made legal assistance a priority.
The fund will offer creators legal assistance from firms such as Cooley LLP, Fenwick & West LLP, Goodwin Procter LLP, and Latham & Watkins LLP.
These services will help artists ensure their projects are legally compliant and provide defense against potential government actions, according to a16z.
Miles Jennings, General Counsel and Head of Decentralization at a16z, wrote that “the fear of potential legal repercussions should not hold back well-meaning artists” from exploring new initiatives like NFTs.
Magic Eden maintains its dominance in the NFT marketplace, holding a 36.7% market share in August with a trading volume of nearly $123 million.
Magic Eden solidified its position as the leading marketplace for non-fungible tokens in August, capturing 36.7% of the market share with a trading volume of $122.47 million, according to data from CoinGecko.
In a Sept. 4 blog post, analysts at the crypto price data aggregator website noted that August marked the sixth consecutive month that Magic Eden has led the market, further establishing its influence in the rapidly evolving NFT sector.
Top 10 NFT marketplaces by trading volume since 2022 | Source: CoinGecko
Initially launched as a Solana (SOL) centric platform in 2021, Magic Eden rose to prominence in 2022 as the second-largest NFT marketplace, capturing a 31.7% share. However, a decline in Solana NFTs saw its market share drop to as low as 3.4% in 2023, the analysts say.
The platform managed to rebound in 2024 by integrating Bitcoin Ordinals — basically NFTs on the Bitcoin network — pushing its trading volume to $734.6 million in March and surpassing its rival Blur to claim the top spot with a 38.5% share.
OpenSea’s market share falls below 20%
Blur, once a close competitor, saw its market share decline from 35.4% in January to 25.4% in August, while OpenSea, the former market leader, now holds a 19.9% share, up from 9.9% earlier this year. Together, Magic Eden, Blur, and OpenSea dominate the NFT market with a combined 82% share, the data shows.
Other platforms like the CryptoPunks marketplace and X2Y2 have also seen gains, while OKX NFT Marketplace experienced the most significant drop, from 18.4% to 2.4%, after a brief surge in late 2023. Analysts at CoinGecko say the NFT trading space has evolved from a monopoly dominated by OpenSea, which had gained a stronghold during the NFT bull run, to more of an “oligopoly in 2024 with healthier competition and diversity among NFT marketplaces.”
Coinbase, Uniswap, Robinhood, Kraken, and Consensys are the names the digital asset industry has grown used to watching receive the dreaded Wells Notices from the United States Securities and Exchange Commission. These companies are exchanges offering a wide range of tokens on their platforms, many of which are clearly investment vehicles with the promise of future profits thanks to the work of centralized teams. It would make sense for some of the offerings on these platforms to fall under the category of security.
But, last week, a new and unexpected name joined the list: OpenSea, the largest online NFT marketplace. And now hundreds of thousands of online artists feel as if they are under attack. But it is likely the true artists don’t need to worry. An NFT project for the sake of art is likely not the type of project the SEC has on its radar.
Most NFTs are not securities
The move by the SEC came as a major surprise, as most NFTs are clearly not securities—they’re just art people buy and sell. And there is a long history of people—indeed, investors—buying art that the SEC does not regulate as a security. And so, the precedent for going after OpenSea is thin.
Heretofore, NFTs have generally been viewed as a consumer product, not a financial product, stripping the SEC of any regulatory authority. Sure, there are some exceptions—such as fractionalized ownership in ventures—though OpenSea did try and keep projects promising returns off the platform.
Despite the facts, the SEC is considering a case against the NFT marketplace.
The facts are on the side of OpenSea and NFT artists
The facts of any case against OpenSea are that the platform generally allows users to buy and sell art, not securities.
There would be no precedent for the SEC to go after NFT artists. In fact, any and all of the facts speak against categorizing art in any shape or form as a security. It doesn’t make sense. Everyone knows individuals and entities buy and sell art that is not regulated as a security. Online NFTs, in most cases, follow this model.
Therefore, as far as most of the projects on OpenSea go, the SEC won’t have a leg upon which to stand when it comes to any potential legislation.
Instead, the SEC’s focus will be on NFTs promoted as investments and also offer some future profits due to the efforts of an NFT collection’s founders rather than pure artists just trying to sell their art online in a new and exciting way.
SEC precedent vs. NFTs similar to token precedents
In past SEC cases against the NFT industry, the SEC has established a clear pattern. How the NFTs had been promoted was at the heart of the case, as well as the promise of future profits thanks to the work of the NFT collection’s team.
Just like during the ICO days, when many projects made bold promises without working on tech, many non-NFT projects functioned as vaporware or vehicles by which founders attempted to raise investments. Instead of innovation, many projects were based on hype and hype alone, especially around the potential resale value of the project, which the SEC sees as a red flag.
NFT projects with royalty schemes, revenue distribution, and similar are the ones the SEC is likely after. For that reason, most NFT artists can breathe a sigh of relief, leave the fight to OpenSea lawyers, and get back to creating.
Those who are attempting more complicated NFT structures must now play a waiting game. Indeed, if there is to be a benefit of the SEC’s Wells Notice to OpenSea, it will long at least be for the possibility of regulatory clarity in the realm of NFTs.
Multiple pro-crypto voices weighed in against the Wells Notice issued to NFT Market OpenSea on Aug. 28, as the SEC’s sweeping crackdown advanced unchecked.
OpenSea was named next on the Securities and Exchange Commission’s chopping block barely a week after Democratic candidate Kamala Harris was reportedly opening up to embracing friendly crypto policies.
News of @Opensea receiving a Wells Notice shows plain and simple that the current SEC’s crusade against the crypto industry continues unabated. This is in contrast to what Vice President Harris said two weeks ago announcing her economic agenda: pic.twitter.com/cafsHJ6DhU
The SEC’s Wells Notice suggests OpenSea might be sued for breaking federal securities laws by facilitating non-fungible token or digital collectible sales via its on-chain trading shop.
OpenSea launched in 2017 and gained traction in 2020/2021 during the NFT boom. Many likened the digital art collections on the NFT marketplace to Baseball and Pokemon trading cards but with web3-inspired art issued on decentralized networks like Ethereum (ETH).
SEC are clowns taking the idiotic stance that digital art magically transforms into a security when it’s put on a blockchain.
Hayden Adams, Uniswap CEO
While OpenSea committed to a $5 million legal relief package for creators, MonkeDAO lawyer Ariel Givner pacified fears of direct litigation against individual artists. Coinbase CEO Brian Armstrong expressed a bullish outlook on crypto operators scrutinized by the SEC.
The industry’s chorus condemned the move as another “regulation by enforcement” play from the SEC, under chair Gary Gensler, who, according to multiple pro-crypto figures, should be sacked. Speculators also emphasized that OpenSea’s Wells Notice was published less than a day after former President Donald Trump released his fourth NFT collection.
Just one day after Trump launched another NFT collection, just a coincidence for sure…
The news did little to benefit Harris’ odds on Polymarket, as Trump took the lead by 1%. Wagers on who wins the 2024 Presidential Election remain a coin toss on the Polygon-based predictions market. News of yet another SEC crackdown on crypto may strain the already tense relations between a possible Harris presidency and an industry that has spent $119 million on lobbying in 2024.
Ok so if OpenSea received a Wells notice why has Sotheby’s not received one for selling art?
Or Nintendo for selling Pokemon
Or Rolex for selling watches
Or Valve for selling CS skins
So just NFTs are bad because they are on-chain or where do you draw the line? https://t.co/VUqy7Au6ZC
NFT marketplace OpenSea received a Wells Notice from the U.S. SEC, indicating intent to sue the web3 startup.
The Securities and Exchange Commission’s crackdown on allegedly non-compliant crypto service providers has now targeted OpenSea, one of Ethereum’s (ETH) first and largest digital collectible trading platforms.
SEC investigators issue Wells Notices as a precursor to potential lawsuits, although this step doesn’t always result in legal action.
Reacting to the news on Aug. 28 and alerting the community, OpenSea CEO Devin Finzer said the firm is “ready to stand up and fight” the SEC’s move to stifle innovation and unfairly scrutinize thousands of creators.
We should not regulate digital art in the same way we regulate collateralized debt obligations.
Devin Finzer, OpenSea CEO
Finzer echoed concerns within the crypto community regarding the SEC’s rigid approach to cryptocurrencies and now non-fungible tokens (NFTs), emphasizing that NFTs are fundamentally different from the investment contracts typically regulated by the Wall Street watchdog.
In an X post, Finzer indicated that OpenSea plans to join contemporaries like Coinbase, Consensys, Kraken, Robinhood, and Uniswap in defending against the SEC’s probes and securities allegations.
Finzer and OpenSea also committed $5 million to a legal fund to support creators and developers affected by the SEC’s Wells Notice.
It would be a terrible outcome if creators stopped making digital art because of regulatory saber-rattling.
The SEC has unleashed litigations against a swathe of crypto-related entities in the last two years, including NFT projects such as Ashton Kutcher and Mila Kunis’ owned Stoner Cats, but this was the first time federal prosecutors scrutinized a digital collectibles trading venue.
OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities.
We’re shocked the SEC would make such a sweeping move against creators and artists. But we’re ready to stand up and fight.
As Bitcoin drops for the fourth consecutive day, non-fungible tokens (NFTs), once thought to be dead, have surprisingly had their best quarter since early 2023.
Non-fungible tokens (NFTs) witnessed their best quarter in Q2 as the sector of digital collectibles saw a 28% increase in sales count, reaching levels last seen in Q1 2023. In a recent research report, analysts at DappRadar revealed that NFTs recorded $4 billion in trading volume in Q2, marking a 3.7% increase compared to Q4 2023.
According to DappRadar’s blockchain analyst Sara Gherghelas, Blur remains the dominant force with 31% market dominance, though the platform lost 50% of its dominance since the last quarter.
“Blockchain gaming continues to dominate the dapp industry, although its share has slightly decreased by 2% from the last quarter, similar to the DeFi sector. In contrast, the NFT and social sectors have both increased their market dominance, emerging as the leading trends of Q2 2024.”
Sara Gherghelas
Magic Eden follows in second place, experiencing success with Ordinals — non-fungible tokens built on the Bitcoin network — and increasing its dominance from 17% to 22%. OpenSea ranks third in terms of dominance, though Gherghelas notes that the marketplace “leads as the most dominant NFT marketplace by sales with 12% market share.”
While it’s unclear what drove the momentum in trading volume among NFT speculators, DappRadar says the positive impulse in the web3 industry “remains strong,” adding that investors still demonstrate sustained enthusiasm and potential for further advancements.
From cute pictures of chubby penguins, the Pudgy Penguin brand has grown into a full-fledged ecosystem with soft toys and its own game.
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What is Pudgy Penguins NFT collection?
The Pudgy Penguins brand was launched in July 2021 by four college friends who decided to ride the wave of NFT popularity. ColeThereum created 8,888 NFTs of Pudgy Penguins, with a price of about .03 each. The collection sold out in 20 minutes at apiece, bringing its creators over 0,000.
Pudgy Penguins were recognizable compared to other popular NFT collections at the time, whose avatars were usually pixelated or trying to follow new trends. Instead, Pudgy Penguins featured bright colors, tiny beaks, and round faces.
The first Pudgy Penguins collection was so successful that shortly after its debut, the creators released a new collection, Lil Pudgy’s, consisting of 22,222 images of smaller versions of the original penguins.
However, the success could have been more-lived. At the end of 2021, prices for NFTs began to decline along with the decline of the crypto market. In addition, the Pudgy Penguin token holders’ community was disappointed with the attitude of the team of creators towards their collection.
Led by student Cole Wilman (ColeThereum), the team of creators shared grandiose plans and promised to release a book and game about their cute penguins. However, the team never specified a timeline for these projects. Their NFT collection was delisted from the OpenSea NFT marketplace for a while.
The creator, ColeThereum, had no intention of developing the project, and in April 2022, Luca Schnetzler (Luca Netz) appeared. He bought the rights from the developer for 750 ETH, or .5 million at the exchange rate of that time, hired a team of experienced specialists, and began promotion. In a couple of years, Schnetzler managed to turn an initially unpromising resource into a unique ecosystem.
Lil Pudgys holders received the same rights as Pudgy Penguins holders. They have access to IP licensing experiences, events, and perspectives, among other benefits.
However, the collection’s success could have been more-lived. At the end of 2021, prices for NFTs began to decline along with the decline of the crypto market. Moreover, the Pudgy Penguin token holders’ community was disappointed with the attitude of the creators’ team towards their collection.
In 2023, an agreement was signed to collaborate with the LayerZero project, thanks to which Little Pudgys appeared on the Arbitrum and Polygon networks.
Pudgy Rods
Pudgy Rods were offered as a free NFT, and any owner of the Pudgy Penguins NFT could claim mint until Aug. 30, 2021.
In May 2023, the project team revealed the launch of the Pudgy Toys collection. The stuffed animals quickly buzzed the market, reaching 0,000 in sales in just two days.
One feature that sets Pudgy Toys apart is that each toy comes with a digital interface called Pudgy World.
The firm began selling chubby penguins in 2,000 Walmart stores in September 2023. As of April 2024, the company has sold more than a million toys, generating revenue of million, and the total number of toys sold has exceeded 1 million.
Pudgy World Game
In December 2023, the authors of Pudgy Penguins announced that they were developing a game called Pudgy World — a free browser-based blockchain game that tells the story of the adventures of two penguins. The developers ntegrated the Ethereum network scaling protocol zkSync, launched by Matter Labs, into the software.
According to Michael Lee, the company’s senior vice president, the technology invented by his organization’s employees will allow the use of new business models and diversify the gaming experience. In this regard, a system for earning cryptocurrency based on Pudgy World will be implemented.
“The launch of Pudgy World, in collaboration with Walmart, stands as a remarkable testament to the capabilities of our joint development teams. Whether you’re a seasoned NFT collector or venturing into crypto for the first time, Pudgy World aims to welcome millions of gamers into web3 to have fun, as well as forge lasting friendships.”
Michael Lee, SVP of Growth at Matter Labs
Owners of NFT Pudgy Penguins and plush penguin toys can create 3D characters based on their tokens. The developers are also expected to launch a mobile version of the game in 2025.
How to buy Pudgy Penguins NFTs?
There are currently two of the most trusted platforms for purchasing Pudgy Penguins NFTs. First of all, users can buy a token on the official Pudgy Penguins marketplace. It is available on the project’s official website and allows, among other things, to buy a physical penguin toy.
Another most trusted marketplace for purchasing a penguin is OpenSea. Only NFTs are available for purchase on the platform.
What are the dynamics of the Pudgy Penguins now?
Data from OpenSea shows that the minimum Pudgy Penguins price is currently 7.985 Ether (ETH) or approximately ,200 at current rates.
Pudgy Penguin OpenSea page shows the most expensive recent sale was Penguin #6873, which sold for a whopping 400 ETH, or about .4 million.
CryptoSlam platform also suggests that Pudgy Penguins ranks as the 20th most expensive NFT collection in the last 30 days, with million in sales. NFT #5019 was the 13th most expensive NFT sold in the last 30 days. The token was purchased for ,104.
Should users pay attention to NFTs now?
In 2021, NFTs became fashionable on the Internet. The excitement grew so intense that some pictures were sold for hundreds of thousands of dollars. And then people suddenly ran out of easy money. The price of collectible NFTs fell by an average of 90% and of ordinary NFTs by 99.99%.
Prices for some of the most popular NFT collections have dropped noticeably recently. For example, the minimum cost of the Bored Ape Yacht Club (BAYC) collection has fallen by 20% in the last 30 days, indicating a possible drop in demand for these assets.
However, some NFT projects, including Pudgy Penguins, seek to maintain interest in their tokens by launching additional collections, games, or even physical goods. Therefore, Pudgy Penguins’ future may seem pretty bright for long-term holders.
