Art DAOs and Transferring of Ownership from Private to Public
Prior to the French Revolution, the Louvre was converted from a fortress on the banks of the Seine River to an ostentatious palace displaying the collection of King Louis XVI’s private treasures, a demonstration of his wealth and power. With visitation reserved for guests of the king and the social elite, the palace held a magnificent collection of paintings, sculptures, and decorative relics of French culture, which remained largely inaccessible to the public. In 1789, rebels revolted against the monarchy and within three years took over the palace. On August 10, 1793, exactly one year after the expulsion of Louis XVI, France’s last king, the doors of the Louvre were reopened, and finally, the public was invited to view the stunning works of art. The fortress was breached, and ownership of these treasures was transferred to the people.
Fast-forward to the 21st century, and the democratic ownership of art has evolved with technology, and specifically, the blockchain. Decentralized Autonomous Organizations (DAOs) and related forms of tokenized governance are more commonly associated with DeFi protocols like MakerDAO and Yearn Finance, but recently has emerged within the digital art and NFT communities. In this case, art collectors with common goals and unified visions have coalesced to form organizations based on curating collections of art, with shared ownership spread across its members. Like traditional art collectives before them, the organizational structure of DAOs are able to provide economic, ideological, and professional benefits to its members and are exploring new ways for the community to participate in a democratic ownership for digital art.
The primary advantage for creating art DAOs is economic. Individuals are limited by finite amounts of capital; conversely, DAOs are able to significantly increase purchasing power and volume by pooling together the funds of its members and offering tokens representing the prorated share of the entire group’s assets. They have the flexibility of raising funds internally, but perhaps more importantly, DAOs can attract new capital simply by recruiting new members. This powerful economic advantage is compounded by the speed and trustlessness of smart contracts. This expedited capital formation provides an enormous competitive advantage against individual buyers.
Another economic benefit is that overhead costs are spread across the group, rather than having the entire burden rest on an individual. DAOs can direct a portion of the funds towards galleries & infrastructure, web development, marketing costs, and events for both artists and the community.
The second reason why art DAOs exist is ideological. Members often unite under common goals, sharing a similar ethos and philosophy. Some groups focus on the core tenets of cryptocurrency: freedom of expression, collaboration, decentralization, challenging the status quo. Other groups may focus on advocacy, empowerment, or charitable causes. Often, DAOs will use tokenized governance for democratic decision making and to curate which pieces of art match with their culture and ideology.
Lastly, DAOs provide professional benefits for its members. Creating a DAO can often result in a higher brand equity that can benefit the people associated with it. This recognition can often allow its curators greater access in sourcing new works art and help create relationships with other artists and organizations. Further, the organizational structure allows individuals to operate under anonymity, a valuable perk for those who want to stay out of the spotlight.
It’s arguable that the highest profile DAO within the crypto art community is currently PleasrDAO, whose swift creation and fundraising highlights the power of these types of organizations. Pplpleasr1, a digital artist with a strong reputation within the crypto community, created x*k=y, an animation designed to commemorate Uniswap’s paradigm shifting equation representing the foundation for automatic market makers and decentralized trading exchanges. The piece was listed for auction to benefit the #standwithasians movement with all proceeds directed towards charities supporting AAPI and minority representation. On the day of the auction, an ostensibly ragtag bunch of crypto enthusiasts were able to spontaneously coordinate a plan, raise funds within hours, distribute equity tokens representing a share of the DAO, and finally, purchase the piece for 310 ETH (nearly $525,000 at the time).
Not too long after, PleasrDAO struck again. This time, they won an auction for Edward Snowden’s only known NFT Stay Free, a piece celebrating the landmark court decision against the National Security Agency and its use of mass surveillance on individuals. The group raised 2,224 ETH ($5.5M) with charitable proceeds going towards the Freedom of the Press Foundation, again displaying the DAO’s core mission and values.
FlamingoDAO is similar to PleasrDAO in terms of contribution and core beliefs. However, they are more formal in their approach in that they require members to go through an accreditation & KYC process. Each potential NFT acquisition goes through an official proposal and governance vote. Their collection is highlighted by 215 Cryptopunks with numerous Meebits, Art Blocks, and other high end NFTs.
Another prominent art DAO is Metapurse, though structurally it bears a few differences from the previous DAOs mentioned. Their initial fund, B20, is a tradeable governance token dedicated towards collecting art from renowned digital rendering artist Beeple. The crown jewel of this collection is EVERYDAYS: The First 5000 Days, a NFT featuring a collage of Beeple’s works. B20 purchased the piece for a stunning $69,346,250 at a Christie’s auction. A secondary use of B20’s funds is the creation museum displays in the metaverse, including Cryptovoxels, Decentraland, and Somnium Space.
One last type of art DAO is project specific DAOs. SquiggleDAO, for instance, is a grassroots organization designed to curate adjacent projects, offer grants for developers & artists, create awareness & education for generative art, and fund community events. Unlike other art DAOs that raised funds through stablecoins or ETH, this group raised capital by allowing contributors to swap ChromieSquiggle NFTs for tokens. The NFTs are stored in a vault that acts as the DAO’s treasury.
With digital art and NFTs continuing to gain momentum, it’s likely that more and more art related DAOs will form. The powerful ability of capital formation empowers individuals to band together to create groups with unprecedented financial might. Users will be able to buy shares of a collection, but perhaps, it’s more accurate to describe it as shares of an idea, a philosophy, an ethos. In years ahead, we might look at art DAOs like we do the Louvre. The race is on, then, for DAOs to find their own version of the Mona Lisa and Venus de Milo.
