Sotheby’s is selling 37 works of digital art once owned by the defunct Singapore cryptocurrency hedge fund Three Arrows Capital in a live auction next week in New York. “Grails,” as the collection is titled, includes several works of digital art created by pioneering generative artists, including Dmitri Cherniak, Tyler Hobbs, and Larva Labs—creators of Cryptopunks. As the title implies, these are sought-after works in the history of generative art, which refers to digital art created from computer algorithms and minted on blockchain as nonfungible tokens, or NFTs.
The live auction at 4 p.m. on June 15 is expected to realize about US$5 million, which would be in addition to a little more than US$6 million already achieved from the collection via auctions and private sales, Sotheby’s said. Three Arrows Capital, which was based in the British Virgin Islands, filed for bankruptcy in July under Chapter 15 of the U.S. bankruptcy code, which is for cases that involve more than one country.
The former hedge fund’s assets—including the NFTs—are now being liquidated, with proceeds from sales returned to creditors, according to Teneo (BVI), which is handling the liquidation. Perhaps fortunate for the firm’s creditors, collectors are still snapping up digital art even if the category as whole is not making the same kind of headlines it once did. In fact, many collectors who were aware that these works were coming to market are jumping at the chance to participate, according to Michael Bouhanna, Sotheby’s head of digital art and NFTs.
On May 19, Sotheby’s sold seven works from the Grails collection during its day auction of contemporary art for a total of US$2.5 million, all of which achieved results above the top end of estimate ranges. Among the sales was Hobbs’ Fidenza #725, 2021, which realized US$1.02 million, above a US$180,000 high estimate, and Larva Labs’ Autoglyph #187, which sold for US$571,500, also above a US$180,000 high estimate. The final prices include fees, while the estimates do not. The Grails collection includes several works of long-form generative art, which refers to projects that can include hundreds or thousands of unique iterations of digital art created by an algorithmic script. Hobbes explains it in an essay on his website.
When a collector buys a new iteration of the project, “a script is run to generate new output, which is then packaged into his NFT and sent directly to the collector.” Launching June 15, the collection includes several landmark feature films, including Cherniak’s Ringers #879 (The Goose), one of 1,000 iterations, 2021. I’m here. The winner will receive an Ethereum-based NFT and a signed and titled print. Estimated value for this work, which is guaranteed to be sold by a third party, is between $2 million and $3 million.
It has been a year and a half since the NFT market recovered after the initial huge interest and unusual prices. Today’s market is “much more organic and healthier” and “less speculative,” Bowhana said. Generative art in particular has attracted a wide range of collectors, including traditional clients, some of whom collected early computer-generated art in the 1960s. In his catalog online, Sotheby’s describes his three public exhibitions of his 1965 graphic his art, which featured works by numerous artists generated by his computer algorithms.
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