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.