GM frens,

In today’s edition of the Ground Floor we will be breaking down the balance between culture and finance in Web3…

Culture vs Finance

If Cryptocurrencies are native internet money, then NFTs are native internet assets.

Absent the internet both cryptocurrencies & NFTs would be worthless.

Thankfully, 4.9 billion people have access to the internet today, and NFTs are enabling the existence of a brand new asset class ~ digital assets with the provenance required to easily authenticate the current owners, and original creators of these digital assets.

Building Culture

To date, this improvement in the provenance of digital assets has supported the creation of a blossoming ecosystem of digital artists.

Artists such as Beeple, Tyler Hobs, Jack Butcher, XCopy & many more artists have received enormous support, and experienced sizable success as a result of continuously creating digital artwork minted on blockchains.

Who’s Collecting Art?

During the same time this new digital medium has enabled a brand new cohort of artists to rise to prominence, it has also triggered a sharp cultural shift in the types of people that are interested in collecting artwork.

Whereas once, collecting artwork from emerging artists and supporting famous artists was largely reserved for people with very large amounts of disposable income, NFTs have activated an audience from all corners of the globe, from all sorts of backgrounds that are now interested in supporting artists' work.

It’s my perspective that we are in the earliest innings of this culture shift in the types of people that are interested in creating, and collecting digital artwork as we continue to spend more of our lives in digital worlds.

PFPs As A Cultural Phenomenon

Outside of activating a new cohort of collectors & creators, an additional cultural phenomenon occurring inside of Web3 today is profile picture projects.

Whereas once, we reserved our profile picture on social media as a canvas to capture the best version of ourselves, today on Twitter you can find many thousands of people who have instead opted to represent themselves with a NFT project they resonate with ~ otherwise known as a profile picture project.

This phenomenon is perhaps one of the most underappreciated aspects of the cultural impact NFTs have had, with several billion dollar brands following in the footsteps of the early pioneers of this model, with Reddit & Puma employing this model, Adidas planning to release PFPs and Nike acquiring RTFKT.

Financial Innovation

NFTs exist at the intersection of finance & culture.

While it’s easy to take for granted the financial innovation we have seen, and continue to see in Web3 ~ it’s worth highlighting this impact.

For starters, Web3 marketplaces have become some of the most efficient marketplaces in existence with Blur offering 0% fees to people using its platform vs the 5-10% fees eBay charges, with Amazon charging 8-45% in fees.

Unlocking Value

In 2023, NFT marketplaces allow collectors to gain instantaneous liquidity for their assets by selling them into bids.

Additionally, collectors can receive loans against their assets, without having to negotiate with a counterparty thanks to platforms such as Blur & Arcade & NFTfi.

Over financialization?

Today, we are witnessing a significant amount of friction surface between culture & finance in Web3.

As the center of this conversation is Blur, a platform that continues to have an outsized impact on the prices of NFT collections.

Blur’s mission is to create the very best financial products for NFT traders, and while many collectors celebrated the additional liquidity Blur’s airdrop brought to NFTs, of late Blur has been the subject of significant scrutiny.

Value Goes Down

As an outside observer, the primary problem Blur is contending with today, and in general any platform seeking to increase the financial tools available to NFT traders / collectors is the declining value of the majority of NFT collections.

To date, Blur has built valuable tools that have made it many multiples easier to buy & sell NFTs ~ the problem, however, is that when platforms focused on improving the financialization of NFTs advance faster than the cultural contribution of NFTs, and people use these tools to simply exist positions, people correlate these tools as the reason why NFTs are declining in value.

If NFTs continued to increase in cultural relevancy, and the demand for NFTs continued to increase as it did in 2021/2022, rest assured, such conversations focused on the financialization of NFTs would take the opposite tone.

Looking Forward

In a bear market, when capital is significantly more scarce, and overall market sentiment continues to reach new lows, it’s easy to lose sight of the cultural contribution of NFTs, and the tools improving the financialization of NFTs.

Zooming out, what’s crystal clear is that creatives such as Beeple, Tyler Hobs, Jack Butcher, XCopy continue to command cultural relevance, and NFT marketplaces continue to operate more efficiently than their Web2 counterparts.

💡 Web3 Roundup

1) 🎨 A Guide To XCopys Art

2) 👀 The #1 NFT Game in 2023?

3) 💸 The $6.2 million NFT Sale Explained

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See you next time! — OB1👋

This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entityThe