In my article last month, I talked about what NFTs are and what types there are, and the future of joint art investments on blockchain. At this point, which has been reached in a month, it would not be wrong to say that the wind of NFT has changed, even though it seems like it is over. Now, instead of collections of 10 thousand pieces that are randomly created with layers, the wind of NFTs, which are works of art and 1/1 original work without an edition, is about to begin. The rapid changes within the blockchain show us different areas regarding their usage patterns as well as the rise of NFTs. For example, a few months ago, a cryptoPunk owner borrowed from a decentralized finance protocol by collateralizing his Punk NFT. Except in rare cases in the real world, it is very difficult to get bank financing by collateral for a work of art. However, in cases of foreclosure, works of art are deducted from the debt by appraising them as a result of the appraisal. In other words, the bank institution does not instantly turn your artworks into cash and pay you, or there is no such loan model. Even if they do have such a service, it's done with a ton of procedural paperwork and at a price well below its true value. But the blockchain has brought a very simple solution to this issue. If the NFT owner cannot repay the loan, the NFT will pass to the borrower.

This means another development that will prevent us from doubting that NFTs are an investment tool while revealing the usage areas. Moreover, all this happened within minutes and eliminated all the procedures created by traditional financial institutions.

As another usage area, it appeared in the collection exhibition “Tablolarla Boğaziçi’nde Bir Gezinti “ belonging to İşbank, which was opened in Decentraland, an Ethereum-based metaverse, last month. In this way, NFTs kept an inventory record of İşbank's collection and were distributed to visitors as exhibition tickets. These first examples actually give us clear clues about what will happen in the future. Why not carry the ticket required to go to a movie, concert, football match, festival or theater in NFT format in our crypto wallet on our mobile phone? All this wasted paper and time spent filling out forms will disappear with our crypto wallets.

Another key point is in the Global Art Market Report, the report published by Art Basel. According to the report, this digital leap created by the pandemic now accounts for close to 20% of the world art market. As crazy as it sounds, it looks like NFTs will continue to get a slice of the pie. Also, according to Artsy's report, 25% of art galleries plan to sell NFTs within 2022. The fact that galleries, museums, auction houses, culture and art institutions have been closed for 2 years has caused all these institutions to suffer economically, and the process has pushed them to seek a new income and to the market, causing them to seek new ways out. NFT is now the inevitable path the art market must take. Christies and Sotheby's made their most important sales through NFTs in this process. In this way, many art institutions created funds for themselves and tried to get rid of the wounds of the global economic crisis created by the pandemic as quickly as possible.

Of course, while talking about this whole process, it is necessary to talk and explain what NFTs mean not only for the market but also for the artists. We can say that many artists, designers or people with creative abilities who know what they want to do in the real world have overcome most of the problems in the traditional structure with NFTs. Artists and these super talented people are now able to act more authentically and more freely in a production process that focuses on their own potential by eliminating the legal, material and moral problems created and dictated by traditional problems. Of course, this does not apply to artists who want to make money fast. Some of the artists abandon their own practices and focus on marketing by following the trends in order to sell. At one point, they try all kinds of things like "Which one sells?" rather than "What can I tell?" and some young artists end their career for this reason before they even start. In fact, this free movement space gives artists the power to reveal their own potential, and it also means a change for institutions and institutions.

Of course, while talking about this whole process, it is necessary to talk and explain what NFTs mean not only for the market but also for the artists. We can say that many artists, designers or people with creative abilities who know what they want to do in the real world have overcome most of the problems in the traditional structure with NFTs. Artists and these super talented people are now able to act more authentically and more freely in a production process that focuses on their own potential by eliminating the legal, material and moral problems created and dictated by traditional problems. Of course, this does not apply to artists who want to make money fast. Some of the artists abandon their own practices and focus on marketing by following the trends in order to sell. At one point, they try all kinds of things like "Which one sells?" rather than "What can I tell?" and some young artists end their career for this reason before they even start. In fact, this free movement space gives artists the power to reveal their own potential, and it also means a change for institutions and institutions.

It would not be an exaggeration at all if we say that while collectors and institutions determined the market before, this axis is now gradually evolving to a point where the artists produce and the market is determined by the artists. Thanks to NFTs, the torch is no longer in arts institutions. They can't play and edit the game the way they want. That's why they have to adapt, and many art institutions have opened their mouths to keep up with this technology. The role of institutions With blockchain technology, the role of arts institutions has clearly evolved from messiah to apostle. They are no longer followed, but followed. They pay artists millions of dollars, as they should, in order to regain this power.

For this reason, the art sector is democratizing and monopolization ends. Undoubtedly, a great change has begun not only in art but also in every field in the world. Blockchain and NFTs also appear as a solution to a problem in which centralized structures that are clogged and lost their creativity in every field cannot move forward.

All talents who want to break the blockage in the traditional field and create a new form of expression come together on the blockchain and join forces by combining their skills and production practices. This new form of expression has already begun to sprout a new ecosystem, which does not include corporations that spend weeks even in e-mail traffic. With their practices from the past, the artists are already familiar with this form of collective production and it was not difficult for them to adapt. In the current process, we will still see that NFTs will grow a lot in terms of both content and usage area. We are currently in the fire age of NFTs, just like the early examples of the online shopping industry in the late 90's, but the only difference is that we won't have to wait 20 years for NFTs to become this popular, it will all happen in a much shorter time.

So the question we need to ask here is not whether NFTs will enter the market, but which arts institutions will survive? The evolution mechanism works simply. It is not the strong who survive, but the adaptive.

Art Historian
Ogulcan Yildirim