The Year of the NFT: How an Emerging Medium Went Mainstream in 2021

“CryptoPunks” were created by Matt Hall and John Watkinson in 2017. Considered some of the first NFTs to be created and originally offered for free, the series constitutes 10,000 pixel portraits of punks. The “CryptoPunks” started shooting up in value in January, with some even hitting the $1 million mark. Soon, it was nearly impossible to purchase them for anything less than that hefty sum; some were even selling for more than $11 million. Over the coming 12 months, the “CryptoPunks” would come to be the face of NFTs in some quarters, representing the medium’s transformation as a status symbol. Other niche hits of January, like NFTs made by Rick and Morty creator Josh Roiland or the “Hashmasks” series, haven’t come close to achieving the iconic status of the “CryptoPunks.”

2. Nyan Cat: Memes and Clubhouse

Created by Chris Torres in 2011, the YouTube video “Nyan Cat” was a mega-viral meme that survived the endless churn of content to become a bit of memorable internet history. On February 19, an NFT version of “Nyan Cat” sold for 300 ETH, or the equivalent of $590,000 at the time, on the NFT platform Foundation. At the time “Nyan Cat” sold as an NFT, people had just started becoming aware of this confusing technological curiosity. Clubhouse, the briefly popular social media app where people could host audio chat rooms, wound up acting as a particular site of discourse and learning, as the art world started to grasp what NFTs were and how they might impact the art market. But before Clubhouse came into wider use, Nyan Cat initiated a wave of written explainers online.

When Mike Winkelmann, aka Beeple, sold his NFT Everydays: The First 5,000 Days (2021) for $69 million at Christie’s, everything changed. The astronomical price made him the third-most expensive living artist in the world. While NFTs had started generating up impressive prices on NFT marketplaces, this was the first time a prestigious auction house offered an NFT. This alone lent prestige and validation to the novel NFT market, which at the time seemed like it could recede back into being a niche internet preoccupation at any moment. But this big sale effectively opened the flood gates, signifying that NFTs were not just a flash in the pan. Many people who have entered this risky market credit the Everydays sale as the moment they decided to dedicate themselves to the medium, whether that meant buying their first NFT or quitting their jobs to join an NFT start-up.

The 10,000-part series “Bored Ape Yacht Club,” which launched in May, features an array of apes sporting a different hair color, accessories, and facial expressions. This NFT series came to not only dominate the NFT market but also to fundamentally shape it. Initiated by Gordon Goner, Gargamel, No Sass, and Emperor Tomato Ketchup–all pseudonyms, obviously–”BAYC,” as it’s known for short,” mimicked the form of one of the most popular NFT collections, “CryptoPunks.” However, “BAYC” added an important community element. Owners of the “Apes” were able to join an exclusive Discord channel where collectors would chat and network; holders would use their “Ape” as their Twitter avatar. As the collection became more popular, “BAYC” could offer even more perks, hosting parties at NFT.NYC and Art Basel Miami, as well as putting together various meet-ups and special offers. Individual “Bored Apes” were bringing in millions of dollars, and soon enough Christie’s and Sotheby’s began offering “Bored Apes” in various auctions.

In the wake of the success of “BAYC,” a wave of similar projects launched. These projects are known as profile-pic NFTs (PFP NFTs) because they usually depict a portrait that can be used as a social media avatar. While not all PFP projects depict animals, the majority do. PFP NFTs came to dominate the market, especially over the summer. Trading was so intense that collectors dubbed the season the JPEG Summer. PFP NFTs became the face of the NFT community and market overall, drawing ire from outside critics who saw the dominance of these collections as proof that NFTs lacked artistic value.

Erick Calderon founded ArtBlocks in the fall of 2020. A longtime lover of generative art and a lurker of Reddit threads on crypto, Calderon took the extra time lockdown had afforded him to launch his start-up: an NFT platform where generative artists could make and sell NFTs. An artist can upload their code and a buyer can receive an artwork, each one instantly generated at the moment of the mint and completely unique. Calderon had created a platform that truly took advantage of blockchain technology to create and elevate the quality of digital art, not just to put a price tag on it.

“Because Art Blocks forces the artist to accept every single output of the algorithm as their signed piece,” Calderon said in an interview with ARTnews, “the artist has to go back and tweak the algorithm until it’s perfect. They can’t just cherry pick the good outputs. That elevates the level of algorithmic execution because the artist is creating something that they know they’re proud of before they even know what’s going to come out on the other side.”

Though ArtBlocks had achieved some success during the NFT boom in early 2021, it wasn’t until August that the platform enjoyed truly astronomical returns, reporting millions of dollars in transactions every day following the runaway success of the “Fidenza” series created by artist Tyler Hobbs. Though there is a long history of blockchain art and software art, ArtBlocks was the first to bring in the artistic capabilities of blockchain technology into mainstream success in the NFT scene. It spurred the support of other artists who are utilizing blockchain technology in innovative ways.

6. White Male for Sale: NFTs and ‘Being Non-Fungible’

Dread Scott created his first NFT in September. But as opposed to minting his previous work or adapting work to the digital, as countless other artists have done, Scott engaged the conceptual and thematic implications of NFTs to create White Male for Sale (2021). A looping video of a white man standing on a crate on a busy Brooklyn sidewalk, the work draws on the “concept of having non-fungible tokens, taking art and talking about suddenly being non-fungible,” Scott said in an artist statement. He wanted to use the work to talk about “the history of slavery and the history of capitalism.” Selected as one of ARTnews’s most important works of 2021, Scott’s work has set the standard for artistic engagement with the NFT market while many of his fellow artists settle for mere gimmickry.

Though art world institutions had been happily participating in the NFT market over the course of the year, it wasn’t until the fall that Pace Gallery and Sotheby’s were able to get their dedicated NFT platforms up and running. Pace Verso launched in October with drops from artist Glenn Kaino and Studio Drift, and Sotheby’s Metaverse kicked off in November with auctions of popular artists and projects in the NFT space like Pak, MoonCats, CryptoPunks, and ArtBlocks. Although Christie’s has not yet launched its own NFT-specific platform, it staged a sale in collaboration with OpenSea in December.

During the first week of November, members of the NFT community flew in from all over the world to meet up IRL in New York City as part of an event called NFT.NYC. The NFT community is vast and energetic, and exists almost entirely online. But during the four-day conference, the scene moved offline as collectors, enthusiasts, and more reveled in their newfound riches together. For the first time, the financial power of NFTs made itself visible as countless venues were rented out for exclusive and luxurious parties attended by a strange combination of celebrities, fin-tech bros, crypto mavericks, digital artists, and start-up wunderkinds.

9. Pak’s Merge: The Conceptual and the Commercial Collide

Works by the digital artist Pak have consistently sold well over the course of this past year, but earlier this December, his work  Merge brought his market to new hights. Between December 2 and 4, he sold 250,000 “mass units” on the NFT platform Nifty Gateway for a collective $91.8 million. What makes this sale impressive is not the price that it commanded but rather the unique usage of blockchain technology to create a massive conceptual art piece. After these mass units had been sold, Nifty Gateway minted them as NFTs that merged each buyer’s mass units. (For example, a buyer who bought 100 mass units would have a different NFT than a buyer who had bought 10,000.) What’s more, each time a Merge NFT is bought, it combines with the existing Merge NFTs in one’s wallet, reducing the amount of Merge NFTs with each sale. Nifty Gateway was quick to tout Pak as the most expensive living artist, surpassing Jeff Koons, though not all market figures agreed that that was totally accurate, given the sale’s unusual format. Still, the Merge sale indicates that there is no shortage of demand for NFTs—and that, if anything, demand is only growing.