Asia is poised to kick off the next cycle of digital art, collectibles, and gaming due to friendlier regulatory milieu.
As we prepare for another cycle of the digital art and collectible market, one question weighs heavily on the minds of builders, investors, and enthusiasts alike: what will trigger the next big wave? For those of us at Glimmer DAO, we’re looking towards Asia. With long-standing and vibrant art and gaming scenes, Asia is uniquely positioned to play a pivotal–and potentially leading role–in the next chapter of digital assets, due to its improving technical prowess, growing number of users, culturally-rich art forms, and friendlier regulatory environment.
Asia's interest in the digital art and collectible market has only grown stronger in recent years. With over two billion internet users and some of the world's largest digital asset exchanges, countries like China, Japan, and South Korea have already become major players in acquiring digital assets, with Asia dominating the 2022 Crypto Adoption Index. In fact, the Central & Southern Asia and Oceania (CSAO) region is the third-largest digital asset market, with an astounding $932B worth of digital assets flowing to Asia between July 2021 and June 2022 alone. For Asian consumers, the digital art and collectible market appears to be a major driver of adoption, creating a massive onramp into DeFi and other related financial services. In Q2 of 2022, an astonishing 58% of DeFi web traffic was digital collectible-related, while blockchain gaming accounted for a respectable 21% (the latter driven, in part, by breakout gaming hits in Asian markets like Axie Infinity).
These numbers underscore Asia's growing role as a hotbed on the creative side of the digital asset market. With a staggering 1.75 billion people set to join the middle class across Asia by 2025, this dynamic and rapidly growing region is poised to be a major driver–and potentially a catalyst–for the next wave of growth in digital art, collectibles, and gaming.
DIGITAL ART AND COLLECTIBLES IN ASIA
At Glimmer, we believe that Asia’s digital art and collectibles market will grow exponentially over the next several years, in a manner similar to what we’re seeing with the legacy art market. For years, the physical art market has been dominated by artists, buyers, and collectors based in the United States and Europe. However, that trend has begun to shift, with Asian buyers and collectors emerging as major players in the industry. As of today, China has solidified itself as the largest art market in the world, accounting for 38% of global sales (followed by the United States at 29%). The number of Chinese collectors has grown exponentially–a trend that’s not surprising given that China is home to the second-largest population of billionaires globally. There has also been comparable growth in India, with auction sales stretching as high as $87 million in 2021. The art market is shifting from the West.
Given this growth, it’s not surprising that Asian countries are witnessing a new class of local artists that are achieving global recognition and setting record-breaking prices. For example, in 2011, a Chinese painting by Qi Baishi sold for $65 million and set a new benchmark for Chinese contemporary art, kicking off a series of other high-value sales including a sculpture by Zhang Huan that sold for $10 million in Hong Kong and a painting by Zhang Xiaogang that sold for $12 million. These sales contributed to the initial momentum of the upward trend in the Asian art market.
The same pattern appears to be manifesting around digital collectibles. While the first popular sets of digital collectibles looked to US and European culture for inspiration, we are now witnessing a shift towards Asian-inspired works, particularly around anime and pixel art.
Anime culture has had a wide-reaching impact on the world of digital collectibles (and will continue to do so), with numerous sets incorporating its themes, styles, and concepts. This creative tradition has found a new home, with sets like Azuki, CloneX, and Shinsei Galverse showcasing thousands of meticulously hand-drawn or digitally rendered characters. These sets are more than mere collectibles; they also serve as the foundation for sprawling narratives and character-driven storylines that are attracting fans from Asia and beyond. In fact, RTFKT, the digital fashion company behind CloneX worked directly with acclaimed Japanese contemporary artist Takashi Murakami on the avatars, paying homage to his illustrious career and broadening the set’s collector-base in Asia.
Anime’s influence has also seeped in the market for unique 1/1 digital art. We’ve seen new, original work from Naoki Saito, one of the original illustrators behind Pokemon. Other emerging artists like SeerLight have created highly intricate, anime-inspired works of Japanese cityscapes that have fetched sales prices of up to 150 ether (or roughly $250,000 USD).
Like anime, pixel art is also gaining significant momentum. This unique form of art emerged in the early days of personal computing, when computers were still in their infancy and artists were just beginning to explore the creative possibilities of the digital world. Today, pixel art has broad appeal in Japan, Korea, and the United States, where it has captured the hearts and imaginations of digital art enthusiasts.
In the digital asset market, pixel art broke through–in a big way–with the iconic digital collectible set CryptoPunks. Now, the artistic form is continuing to gain steam with a new generation of Asian pixel artists emerging to push the boundaries of what can be done with this dynamic medium. Talented creators like Gutty Kreum, Yuzu, Hermippe, Kazuki Takukara, and Mae have already achieved significant recognition for their highly detailed and compelling pixel work, drawing in a new generation of fans and collectors who appreciate the unique aesthetic and creative possibilities of the form. Even traditional pixel artists, like the long-running Japanese pixel artist collective, EXCALIBUR are beginning to move into the digital art market, bringing their unique style and vision to a new audience of digital art enthusiasts.
As the influence of pixel art continues to grow and flourish, we can expect to see an increasing emphasis on more detailed, higher quality pixel art that pushes the boundaries of what can be done by stitching together colored squares. From bold, colorful designs to intricate, highly detailed works, pixel art is emerging as a distinct category and one we believe is worth collecting.
Beyond the realm of pixel art and anime, we're witnessing the global spread of generative art, which uses complex algorithms and computer code to create unique, networked pieces of art. The genre has exploded in popularity, over the past few years, with platforms like Art Blocks leading the charge. In fact, the generative art category has now become a staggering $1.5 billion industry, with major museums and traditional art collectors acquiring works from emerging generative artists.
However, the rise of generative art isn't limited to the West. In Asia, a new cohort of generative artists has begun to emerge, creating some of the most innovative and cutting-edge pieces in the field. Artists like Reva and Shunsuke Takawo are making waves, gaining a following for their unique styles and approach to the category. The Asian generative art community is beginning to grow, through initiatives like the Japanese Generative Art Foundation, further cementing generative art as a growing trend in Asia. We can expect to see even more innovation and experimentation and a distinct class of creators, one with the potential to reach billions.
GAMEFI AND IN-GAME ASSETS
The opportunities in Asia extend beyond just digital art, as evidenced by the rise of in-game digital collectibles. The world of gaming is undergoing a transformation, with the emergence of a new category of gaming known as GameFi. At its essence, GameFi empowers players to actively "play-to-earn" digital assets, thereby creating a level of interactivity, immersion, and ownership with the games they play. What's particularly interesting about GameFi is that it creates an entirely new paradigm for gaming. No longer are players simply consuming content, they are actively engaged in the creation of digital assets, giving them a true sense of ownership and investment in the games they play. It's a new level of immersion and engagement, and it has the potential to revolutionize the gaming industry as we know it.
The first major GameFi project started in Asia with Axie Infinity–a blockchain-based game that allows players to earn tradeable gaming assets by breeding and creating digital creatures. Axie Infinity grew like a firestorm, with its assets racking up billions of dollars in trading volume, attracting millions of players, and spawning the creation of professionalized gaming guilds and groups. A large video game economy grew, seemingly overnight.
Yet, the mechanics unlocked by Axie appear to be the tip of a much larger iceberg, driven in large part by game developers. Studios and teams, including Oasys, a Japan- and Singapore-based startup that’s building a blockchain for gaming developers, and Digital Entertainment Asset, or DEA, are working towards the vision of GameFi. Production studios are even going beyond gaming mechanics and infrastructure, to create immersive worlds that span both gaming and entertainment. Armored Kingdoms, a multi-platform entertainment universe, is taking game development to a new level by introducing comics, an animated series, and an NFT-based card game into it’s world. By operating more closely to a Hollywood film studio, projects like Armored Kingdoms are paving the way for novel forms of gaming to be experienced by mass audiences.
Another way that gamers are rallying behind GameFi is through the creation of guilds, with many of the most popular guilds emerging in Asia. Projects focused on bringing in new players, and bridging the gap between web2 and web3 games include Infinity Force and Ethlas. Both offer ways to organize guilds, while hosting regular gaming tournaments. With Infinity Force, managers can choose from a number of players (referred to as "scholars") to then acquire assets together to be used in-game. Afterwards, the guild's earnings are allocated to scholars for their contributions. One of the most popular Asia-based guilds, Yield Guild Gaming (YGG) network, has recently created region-specific offshoots via YGGSea, YGGSeaID, and YGGInd, to expand its reach and grow the international gaming community abroad. With all of these developments in play, GameFi will likely bloom in Asia.
REGULATORY ACCEPTANCE THROUGHOUT ASIA
The above trends will be further amplified by the more regulatory-friendly approach taken by China, Japan, and Korea. While the United States is seeking to tighten its grip on digital assets, countries in Asia are (comparatively) opening their arms to the industry, paving the way for innovation and growth.
Hong Kong is fast becoming a digital asset hub, proposing rules that would enable retail investors to trade certain "large-cap tokens" on licensed exchanges. This is in stark contrast to mainland China, where crypto-related transactions are banned. With Hong Kong's more relaxed regulatory environment, Chinese-founded digital asset companies may return, suggesting that there is a growing interest in the digital asset market among wealthy Chinese.
Japan's Prime Minister Fumio Kishida appears committed to promoting the digital asset market, including digital art, collectibles, and the metaverse. The Japanese government is considering digitizing national identity cards and has issued digital assets to local authorities. Meanwhile, the South Korean government is investing heavily in tech initiatives under its Digital New Deal, with a significant chunk allocated towards building the country's domestic metaverse ecosystem.
THE FUTURE OF DIGITAL ART AND COLLECTIBLES IN ASIA
DAOs, like Glimmer, are well positioned to take advantage of new opportunities in digital assets, whether they arise in China, Japan, Korea or elsewhere in the region. While traditional capital allocators may be hesitant to invest in Asia due to sudden government interventions, COVID lockdowns, and the ongoing trade war between China and the US, high net-worth individuals in China with funds overseas (primarily in Hong Kong) appear open to engaging with digital assets, including digital art and collectibles.
The impact of Asian collectors and artists on the digital art and collectibles markets is just getting started. As we've seen with the traditional art market, “a rising tide lifts all boats.” And, the Asian market appears poised to create new categories of art that are specifically native to the region. With Asia waking up to the possibilities of digital art and collectibles, the emergence of GameFi as a fast growing market, and with a techno-forward societal worldview, Asia is uniquely positioned to play a larger role in the next wave of the digital asset market.
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Enjoyed this article? If you’re a creator, collector, or interested in learning more about Glimmer, please reach out at hello@glimmerdao.io or direct message us at @glimmerdao. We’d love to hear from you.
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*Essay adapted from a Twitter thread by Brionic of Glimmer, with contributions from Charlie Edwards of ID Theory and Glimmer. *
Artwork Credits: 𝐚 𝐠𝐥𝐢𝐦𝐦𝐞𝐫 𝐢𝐧 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐭𝐡𝐞 𝐝𝐚𝐫𝐤𝐧𝐞𝐬𝐬, Kolahon; Generative Mask #2902, Shunsuke Takawo; After-Hours: Motoyama, Kochi, Gutty Kreum; BILLENIUM, Reuben Wu.