Foundation: A web3 Art Primer
Happy Sunday! I’m very excited to share Foundation and discuss Art in Web3 and the Metaverse.
The Profile Basics
Startup Name:
Foundation
Industry:
Web3 - Consumer (NFT Art)
Competitors:
Nifty Gateway, SuperRare, MarketPlace, Rarible
Break It Down for Me
The Problem:
Talented artists from around the world are not able to get the exposure they deserve or monetize their work. Many artists sell their work for minimal amounts only to have their work resell for larger amounts later – and the original artist does not get to participate in the economics of the future sales.
The Solution:
In Web3, artists that mint their work as NFTs are able to encode a take rate on all secondary sales of that artwork into perpetuity; even after the artist is no longer alive, their family will still be able to benefit from a small portion of each sale. Importantly, the blockchain is able to verify, authenticate, and provides transparency as to the provenance of each art NFT. In the metaverse, digital art is a matter of self-expression and NFTs allow for interoperability and easy implementation of digital artwork across a swath of Web3 platforms.
Core Users:
Early crypto adopters, Web3 gamers, digital art collectors and digital artists
Walk Me Through It:
Foundation
provides top digital artists around the world a large collector audience and monetization through “1 of 1” NFTs, which means that each NFT is completely unique instead of having multiple editions. NFTs on Foundation come primarily in the form of static images and dynamic images and to a lesser extent (at the moment) video, audio, and 3D/AR.
Essentially, creators on Foundation mint their digital art as NFTs and place their artwork for sale by setting a reserve price. Once their artwork is sold, creators get 85% of primary sales and then 10% of secondary sales into perpetuity. Users on the platform can collect top artwork and store them in their Metamask wallets. Then they can either sell them on OpenSea or display their art NFTs across various Web3 metaverse platforms such as
Decentraland
or Web3 art galleries for any of the following purposes: self-expression, social signal, or to place on display for rent/sale.
Show Me the Money
Currently:
Foundation makes money from each sale on its platform. Foundation takes 15% of proceeds from initial sales of NFTs and 5% of all secondary sales; since August, Foundation has produced an average of $17M in GMV per month ($68M total in four months).
Be Wary
Where to be wary for Foundation:
There is undoubtedly a certain level of speculation within NFT art platforms that results in significant volatility and sometimes a lack of liquidity. Though there is utility for art NFTs across the metaverse, an economic downturn could decrease demand and overall spending on the platform and potentially cause NFT holders to lose significant value on their investments, which would both result in a decrease in value accrual for the platform and a potential blowback from users across the platform and asset class as a whole.
Secondly, there is potential for disruption across the landscape of Art NFT platforms. While Foundation is an early mover, has strong leadership, branding, and a strong community, there are a number of potentially competing platforms including
Nifty Gateway
(leader for top NFT art drops) and other platforms such as SuperRare, MarketPlace, Rarible, and
Art Blocks
(generative art project that produced $626M in GMV in August). Some popular NFT artists might hold sway on the landscape and where top artists go; Beeple (sold digital artwork on Christie’s for $69M earlier this year) has primarily used Nifty Gateway as the platform for his drops which presents a risk to Foundation.
Now Get Excited
Now time for my favorite section.
Foundation is very thoughtful and measured in their approach to building the highest quality Web3 NFT art site. First, it went out and recruited a select but diverse number of top digital artists in countries all over the world--from the US, to Brazil, Africa and Japan. From there, it enabled each chosen digital artist to choose one other talented artist to invite to the platform. The only other way to get on the platform is to apply via submitting a portfolio to the community on the Foundation Discord which results in an extremely competitive process; in other words, not anyone can join, resulting in only top-notch quality.
Beyond high-level design, Foundation’s emphasis on diversity results in a wide range of offerings and distinct cultural communities. For example,
Cyber Baat
is a curated collection of African artists; NFT art spans across
photorealism
to
abstract
,
generative art
and
topical
(Edward Snowden’s $7.9M sale of NSA/Supreme court ruling piece) to
Web3 memes
.
I’m excited about Foundation’s potential for expansion by:
The product - Beyond its marketplace, social feed, and community, Foundation could release immersive VR galleries through which users could explore various collections with fellow collectors. Foundation could also allow for artists to create content to allow for collectors to understand context or the inspiration for certain pieces of artwork. Finally, a native token across Foundation could allow for users to vote top artwork in themed competitions and incentivize user engagement on the platform. Foundation could ultimately start to implement digital versions of physical artwork onto the platform as well.
The target user market - Expand beyond early crypto and digital art adopters to more general public as more users become familiar with digital art in the metaverse.
Revenue generation - Launching a native platform token that requires token holders to own at least one piece of Foundation artwork.
And that’s a wrap!
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Thanks for reading and see you next Sunday.
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