Earlier this year we made the decision to invest into Botto, a decentralized autonomous artist (DAA) that has been pioneering at the intersection of AI, blockchains, and community governance.

Today, on the heels of its 3-year anniversary and a successful Sotheby’s solo show, we dive into our thesis and why we believe Botto to be among the most important digital art projects of the past 10 years.

Why we invested in Botto

Botto came to life in October 2021 when artist Mario Klingemann released his latest experiment to explore how a machine can participate in the creative process. He had been fascinated with the idea of automating the creation of generative art for over two decades. “Circuit Training” (2019) was his first release in which a generative machine was able to evolve over time based on human feedback. While this machine successfully adapted to data, it was missing a mechanism to sustain itself, preventing it from becoming truly autonomous and recognized as an artist in its own right.

It turned out that the missing ingredients were to be found within web3. Specifically:

• NFT infrastructure provided a means for the entity to create artworks with provenance, immediately accessible to potential buyers worldwide.

• A token network and DAO-based governance incentivised ongoing participation in the artists’ development, giving feedback on its output and steering its creative direction.

We at 1kx operate under the thesis that tokens are a powerful mechanism for protocols to capture and distribute the value it creates to the stakeholders, and incentivise activities that contribute to its success. The utilization of $BOTTO as a right to give feedback on its works, steer its initiatives, and claim protocol rewards demonstrates how token networks can sustain the evolution of an AI agent and its artistic career. In doing so, Botto is challenging our notion of what it means to be an artist, pioneering an entirely new paradigm of how art can be made.

By incorporating human feedback to refine its tastes, Botto is also a prime example of web3-enabled multiplayer creativity. From our thesis:

Multiplayer creation is the end-to-end process of Formation, Coordination, Production, Value Distribution, and Post-Release evolution of creative work — in which multiple parties are involved in one or more of the stages.

By having a larger group involved in the creative process end-to-end, we are able to:

• Give creators a new playing field where they can define a set of values, source ideas from within the community, and produce art that doesn’t compromise to third-party interests

• Provide creators a tighter feedback loop from their communities for to-be-released work, de-risking distribution and crowd affinity

• Allow creators to replace platforms with communities as a resource, support system, and creative guidance

Web3 has allowed Botto to establish its own artistic identity, co-created with a community of token holders who govern its creative direction. Botto’s novelty as a new kind of artist, as well as a permissionless means to participate in an artistic career quickly placed Botto at the forefront of cultural conversations.

Aside from co-producing Botto’s works and training its algorithm, token holders have been responsible for enhancing other important aspects of Botto’s career. Some of Botto's most impactful collaborations and exhibition opportunities have emerged from within the DAO, whose members are strategically positioned to maximize the artist’s reach.

The community ensures that Botto’s influence extends beyond the digital space through curated exhibitions, installations, and special collaborations. These efforts not only push the boundaries of Botto’s generative art capabilities but also solidify its presence in offline, real-world cultural spaces.

How Botto Works

Each week, Botto generates tens of thousands of prompts and images, which are curated and refined through a voting process. $BOTTO holders stake their tokens for the right to express their preferences on the produced works. These inputs collectively guide Botto’s generative algorithm, refining its output over time. Each voting period ultimately leads to one weekly, canonical Botto artwork that is minted as an NFT, which is then auctioned on SuperRare.

While the auction takes place, Botto produces a new round of works and the voting cycle continues. Revenue from sales go back to BottoDAO and the community treasury to support further development of Botto’s career.

The utility of $BOTTO has given the community a design space to explore how one can participate in the project as a co-creator. In its current iteration, staking at least 100 $BOTTO and voting each round earns participants the rights to claim protocol rewards. 40% of proceeds from Botto’s weekly auctions goes to an Active Rewards pool, with its distribution based on how many Voting Points (VP) are spent by a user relative to other voters in that voting round. This encourages individuals to do more than passively buy and stake the token, but continuously partake in the collective fine-tuning of the artists’ generative algorithm.

The DAO as a Catalyst of an Artistic Career

In addition to curating Botto’s individual works, BottoDAO members actively manage the artist’s treasury, oversee marketing efforts, and drive technological advancements. Through their collective stewardship, Botto's artistic identity has gradually evolved beyond its initial human-programmed roots, becoming an autonomous creative force shaped by the community's input.

The DAO also votes on Botto’s broader artistic directions such as its release cadence, themes, and addition of new generative models. Initially, Botto operated using VQGAN + CLIP as its core model but has since incorporated open-source diffusion models like Stable Diffusion and Kandinsky, expanding its creative possibilities.

An Artist in its Own Right

Botto’s first art piece was minted on 22nd October 2021. Its first year - the Genesis Period -  concluded on October 14 2022 with the artist completing its 52nd piece. Since then, Botto has become one of the best selling artists in the NFT space. To date:

• Botto has generated ~$5m in primary sales from 145 artworks, with an average sale price of over $30k. The Genesis pieces (first year, 52 mints, GAN) trade at a considerable premium, with a last sale of 57.6 ETH and current floor at ~194 ETH.

• Botto is among the all time top-selling artists on SuperRare

• Over 300 ETH in rewards distribution

• Over 15,000 people have contributed to Botto’s development, impacting the theme, style, and imagery of each piece. This collective effort has been instrumental in Botto's success, making each DAO contributor an integral part of its artistic journey.

• Botto’s works have been exhibited in more than 30 exhibitions worldwide to date.

Last month, Botto celebrated its 3-year anniversary with a solo show at Sotheby’s, the first decentralized AI artist to do so. On the heels of this milestone, Botto and the DAO will continue pushing the boundaries of what’s possible with ambitious creative initiatives such as:

• Exploring Generative Art. Helping Botto explore p5.js by giving both quantitative and quantitative feedback. A special collection of 250-1000 long-form generative artworks will be presented by Verse in February 2025.

• Tutoring Botto in Art History. An initiative to introduce Botto to art texts, historical art manifestos, contemporary art theory, criticism, and philosophical texts that align with its aesthetic and ethical values. This will help Botto form an opinionated perspective on the material with which to derive an independent view of the world and art.

• Launching Botto Agents. Starting with Otto, the Botto Twitter Bot, allowing it to give feedback on the DAO’s input and expanding the collaborative relationship.

• Gamification. Introducing badges and reputation to further engage community members in Botto’s governance

Full roadmap and strategy update.

We at 1kx are excited to continue supporting Botto as it explores new artistic directions, creative mediums, and pushes the boundaries of what is possible with art and AI. Botto exemplifies how token networks and decentralized governance can challenge traditional notions of creativity and the role of artists in the digital age. This convergence of technology and art showcases new paradigms of authorship and value creation, where artists are not limited to individuals but can emerge as autonomous systems supported by networks of contributors.

If you’re excited about Botto or want to chat more on the topic please reach out!

Disclaimer*: This article is for general information purposes only and should not be construed as or relied upon in any manner as investment, financial, legal, regulatory, tax, accounting, or similar advice. Under no circumstances should any material at the site be used or be construed as an offer soliciting the purchase or sale of any security, future, or other financial product or instrument. Views expressed in posts are those of the individual 1kx personnel quoted therein and are not the views of 1kx and are subject to change. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell or a solicitation of an offer to buy any securities, and may not be used or relied upon in evaluating the merits of any investment. All information contained herein should be independently verified and confirmed. 1kx does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. Certain information has been obtained from third-party sources. While taken from sources believed to be reliable, 1kx has not independently verified such information and makes no representations about the enduring accuracy or completeness of any information provided or its appropriateness for a given situation. 1kx may hold positions in certain projects or assets discussed in this article.*