Middle Ground #3: The Time is DAO – A (Brief) Foray into the Value of DAOs in the Art World

Essay / February 2022

Middle Ground #3: The Time is DAO – A (Brief) Foray into the Value of DAOs in the Art World
By Jacob Barnes

         While London’s skies are blue today – or as blue as they ever get – the city seems to have been cloaked in a pallid grey the last number of weeks. I have heard repeatedly that there seemed to be something in the air, a contagious malaise that has nestled into our systems just as Covid fears have dampened. But while I had chalked it up to the January doldrums, it seems to have trickled into early February — despite a slew of exciting new shows opening, it has felt difficult to muster collective excitement. In short, I think we all eagerly await spring.

Personally, I have been working to get out of a mental mire, particularly regarding this newsletter. As I hinted at towards the end of my last instalment, I had intended to write about the increasing speed with which artists are propelled towards market stardom, or put otherwise, the decreasing age at which artists are plucked from the emerging ranks and placed among a blue-chip pedigree. Without wanting to give too much away, I was going to – and still hope to – understand the development as the extraction of labor value, akin to the recent lowering of the minimum age for a license to drive industrial vehicles in the US. However, as I thought myself further and further into a coherent argument, I realised the need for concrete research; research I have yet to fully do. So, with that in mind, I am going to give myself another two weeks for that (stay tuned) and pivot to something that is equally important, and for which I am fully equipped to write about: the use of crypto assets and blockchains to help establish a more transparent, more sustainable, and better defined art world.

Foremost, before I write any further, an important disclaimer is necessary: THIS IS NOT ABOUT NFTs. I remain staunch and candid in my views on NFTs, particularly in how they are instantiated within the “traditional” art world: they’re another asset class, and so while those who can sell them deserve credit for keeping the industry’s financial cogs turning, they do little to redefine the fundamental terms under which the art world operates. (See a recent WSJ article on how NFT collectors increasingly want to display their digital art on walls…like paintings.) I do think NFTs in the crypto art space make a lot more sense, but often, tokenized organisations or communities (and their token apparatuses) aren’t really what we’re talking about when we lament NFTs, so I feel comfortable leaving the distinction there.

Instead, I am very interested in the ability of DAOs (Decentralised Autonomous Organisations) to procedurally track, regulate, and maintain viable social, financialized ecosystems for the art world. So interested, in fact, that Kevin McDonagh of Custorianand I have gone and started a company called Collectorate to do just that (more updates soon). But I remain fascinated by crypto assets’ ability to perform multiple functions at once: to be a membership card, store of value, artwork, and contract. What’s more, I applaud the opportunity they provide owners to achieve financial independence. The trade of crypto assets remains limited in its mediation, and while I’m all for the regulation of securities, crypto assets occupy a strange middle ground, which remains accessible to the average internet user. Ironically, I remain less sold on the promise of democratisation DAOs are often touted for, but if that floats your boat, all the better too. In a world where access to artists is as easy as it’s ever been, the gallerist becomes less of a conduit and more of a moderator: DAOs may indeed be key here, redefining the purpose each player serves in the art world.

But systemic change at the minute requires a marrying of on-chain and off-chain activities — something for which there is no smooth protocol. A key benefit to blockchains is that all actions are proceduralized and recorded, but the art world is not one of procedures; it is social and opaque, relying on handshake agreements and the strength of one’s word. Hence, those early movers (myself included, but also the wonderful researchers at Trust, and their subsidiary, Black Swan DAO, and Furtherfield here in London) are almost signing a death wish. It is implausible, if not impossible, to think that a new way of organising will be perfected on its first (or even tenth, twentieth) attempt. But the possibilities far outweigh the potential pitfalls, and to evoke an often annoying platitude, there is no running before walking.

I recognise this is an exceptionally brisk run-through, particularly if the crypto world is not one you’re involved in. But if you’re keen to learn more, please send me an email and we can chat — I’d be happy to tell you more about the work I’m doing with Collectorate, but more importantly, what I hope that work means for the future. As someone who is not a tech native, I’ve come to this not through crypto, but as someone who feels strongly that the way the art world functions right now is not sustainable long term. I have no idea if DAOs are the answer, but they seem to provide a set of tools that makes trying worthwhile.

Image Credits:
1. Courtesy of Shutterstock Licensing