6 months after the first NFT boom, Australia’s true believers are promising more than ever before. Can they deliver?

6 months after the first NFT boom, Australia’s true believers are promising more than ever before. Can they deliver?
Pavel Kharitonov / NFT Stars
  • The NFT (non-fungible token) market has fallen dramatically from its peak in early 2021, but Australia’s true believers are still promoting the technology.
  • Business Insider Australia spoke with two NFT advocates who believe they could revolutionise the arts scene and the local sports collectible industry.
  • But fading hype, volatile crypto-asset prices, and the lingering impact of COVID-19 pose significant challenges for would-be NFT innovators.
  • Visit Business Insider Australia’s homepage for more stories.

It’s a hell of a time for the Australian NFT scene.

Cryptocurrency prices have tumbled from their all-time highs, spooking the investors and big-time speculators who inflated the digital market through early 2021. New coronavirus lockdowns have swept the country, yanking attention away from digital assets. And the government financial support which funded a flurry of crypto investment has largely evaporated, leaving curious traders less likely to punt on blockchain commodities than they were six months ago.

But the nation’s NFT faithful have plans. Big ones. Plans to hold a groundbreaking in-person NFT exhibition. Sell the nation’s biggest sporting codes on blockchain collectibles. And, with a great deal of luck, auction a painting’s real and digital ownership for more than one million Australian dollars. 

Half a year after non-fungible tokens burst into the public consciousness, those might seem like lofty goals. The market has cooled, the local art industry is yet to adopt non-fungible tokens as the future of equitable creative practice, and the major leagues are once again concerned about getting fans in seats — let alone selling virtual jerseys.

Nevertheless, a new cadre of Australian NFT apostles are rising, chasing mainstream investment, and touting the technology’s virtues long after the initial hype has worn off.

When Business Insider Australia spoke to Australian artists and social media mavericks about NFTs in early 2021, graffiti artist Lushsux was boasting of six-figure profits on the digital market. The meme artist is still churning out NFTs, but his latest work has a new target: critics who say the bubble has burst.

via @lushsux / Instagram

The skeptics may have a point.

Data from NFT market database Nonfungible.com, which tracks movements on the Ethereum blockchain, shows primary art market sales peaked in early February.

Some US$5.57 million channelled towards creators on February 1, coinciding with the launch of the hit Hashmasks art series.

By July 25, primary sales across the entire Ethereum ecosystem had fallen to less than US$417,000.

via Nonfungible.com

The story was different on the secondary market, where the number of art sales reached all-time highs through July.

But even that spike can be read as a possible mass exit, with real-world market volatility and plummeting valuations for Bitcoin and Ethereum leading NFT investors to sell out. 

This is not to say the promise of NFTs has evaporated. Major stakeholders are holding out for the NFT renaissance: this month, NFT marketplace OpenSea reached a valuation of US$1.5B after a US$100 million funding round, including investments from NBA superstar Kevin Durant and actor Ashton Kutcher. 

Elsewhere, analytics firm Dappradar reports “Axie Infinity”, a new “play-to-earn” video game built on collectible NFT characters, is generating US$25 million in sales every day. 

Even if Beeple’s US$69 million art sale will never be replicated, digital assets maintain a certain appeal, luring virtual treasure hunters into the digital wilderness.

It is this hype which appears to animate Dan Khomenko, the founder of Australian-based marketplace NFT Stars, and the founder of what he hopes will be the nation’s second in-person NFT exhibition. 

SIDUS, a wide-reaching display of NFT-based visual art, music, and projections was slated to take place in Melbourne in August.

A lockdown in the state of Victoria led NFT Stars to postpone the event, which promised to bridge the divide between the technologists and the artists who hope to profit from the marketplace.

“There’s a bit of a dilemma happening with the COVID-19 restrictions and all that right now,” Khomenko told Business Insider Australia. “It creates a bit of a complexity for people to actually plan things.” 

Complexity is right. Although Melbourne’s strictest lockdown measures have ended, lingering venue restrictions have curtailed NFT Stars’ plans to host NFT art on 3D projectors, filling an inner-city gallery with a dizzying array of flashing GIFs and neon-tinted artworks. 

SIDUS will kick off “once our team can guarantee a COVID-safe journey for all involved,” the platform said.

Khomenko future plans also include an NFT radio station, where “you can upload your music which you have made yourself and it will be streamed towards different radio stations around the world.” 

He boasts of possible celebrity-tie ins, too, pending some major and as-yet unrealised forays into digital technology from the platform.

Khomenko spoke enthusiastically about augmented reality rooms where users can buy “decor and paintings and music directly from this particular artist or a celebrity,” like “let’s say, Beyoncé”.

Other big names figure prominently in NFT Stars’ plans. In what Khomenko billed as a major drawcard, NFT Stars will soon host the auction of a painting signed by Ethereum creator Vitalik Buterin, along with its digital rights.

Khomenko was not shy about his expectations.

“The starting bid will be around a million dollars, I guess,” he said. “But we’ll see how it goes.”

Many of those attractions will be built on NFT Stars’ existing marketplace platform, which Khomenko said launched in January. 

The site still shows its youth. Roughly 100 individual NFTs are currently listed on the marketplace, compared to the many thousands offered on major clearing houses overseas. 

This is to say nothing of the quality of the work that is on display. Even the most ardent NFT collector must ask how much shallow cyberpunk worship the scene can realistically support.

via NFT Stars

NFT Stars is a certainly flashy package, and the SIDUS exhibition Khomenko describes, packed with virtual bells and whistles, could be a moment for the local industry.

However, his outsized optimism may overshadow the project’s current feasibility, and how keen Australia’s art scene is to embrace the tech.

Seeking a point of comparison to overseas markets like OpenSeas, Business Insider Australia asked Khomenko about current trading volumes on NFT Stars.

“I mean, to give you these stats, it would not be very accurate data,” he said. “Because now, in the next month, there will be triple, maybe 10 times more transactions happening as was happening before, during the beta test.”

Khomenko is not the only NFT idealist hoping to make the technology stick in Australia. 

Jacob Osborne, founder of Sport Moments, envisions a world where NFT collectibles are an integral part of the fan experience.

Echoing the success of NBA Top Shot and the Sorare football game, both of which are built on blockchain platforms, Sport Moments hopes to usher top leagues and clubs into the NFT market.

“With all of the numbers that are being thrown around, I think every sporting code that we’ve spoken to are definitely aware of it and looking into how they can benefit from it and capitalise on the opportunity,” Osborne told Business Insider Australia.

That statement isn’t total fantasy. The National Basketball League is keenly aware of the NFT market, and cryptocurrency exchanges sponsoring Australian Football League teams have pushed blockchain technology to new audiences, potentially sweetening the deal for domestic sport-themed NFTs.

Unofficial sports-themed NFTs have already trickled onto the market. A short animated clip commemorating former footy star Eddie Bett’s 2016 Goal of the Year award, hosted on the Binance NFT ecosystem, sold on Monday for the equivalent of US$34.80.

Sport Moments has also partnered with Team Zone, creators of the licensed AFL trading card game, in an attempt to meld old-school collectibles with the new technology.

“Imagine buying your team’s jersey, your team’s merchandise, and then being able to scan a QR code, and then getting an NFT of that jersey, that you can use inside of games, such as “Fortnite” for example,” Osborne added. “I think that’s really exciting.”

via Sport Moments

Yet Osborne demurred when asked which codes are in conversations with Sport Moments, and how far those discussions have progressed.

“It’s up to the sporting codes in question to make an announcement,” he said.

“But I will say that most major sporting codes are very interested in the concept. And a number of them are moving into this space.”

Six months after the internet’s viral fixation, the Australian NFT scene remains just that: an interesting concept which is yet to fulfil its lofty promise.

Local investment is real enough for the Australian Taxation Office to remind NFT investors of their tax obligations, but not yet widespread enough for the average AFL fan to tally the capital gains of their digital trading cards. 

And NFT Stars needs to secure a real-world room before it can sell Melbourne’s cognoscenti on virtual galleries. 

“NFTs are a highly hyped topic right now, it’s a bit of a FOMO,” Khomenko said.

For Australia’s NFT market to truly flourish, the true believers must turn that hype into something with legs.