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Why Some Nft Creations Destroy Physical Art Assets, Including a Rare Copy of Dune

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Non-fungible tokens or NFTs have taken the world by storm. The market generated more than $23 billion in trading volume in 2021, with the number of active wallets trading NFTs growing from 5,000 at the start of the year to around 140,000 by the end of the year. The volume of the NFT market in 2010 was only $100 million in comparison.

But as the hype around NFTs continues to grow, some NFT advocates are destroying real-world assets in the process of creating and spreading NFTs.

What happens to physical assets?

An emerging trend in the crypto world is the practice of “burning” or destroying real-world assets before recreating them as NFTs. The first such sabotage was committed by Burnt Finance, a crypto start-up. The company literally burned a printed work of Banksy, the pseudonymous England-based street artist, political activist and filmmaker.

The company had acquired the artwork at an auction and then burned it in a video streamed live from a New York park. They then proceeded to sell it for almost $400,000, which is double the price of the physical artwork.

Ironically, the play, ‘Morons’, itself criticizes the art market. Depicting an auctioneer at Christie’s, it is accompanied by the words: “I can’t believe you morons are buying this.”

Burnt Finance then raised nearly $11 million in two funding rounds.

After that, an owner of a drawing by Jean-Michel Basquiat, the American neo-expressionist artist, auctioned an NFT of the drawing. He added a caveat that the new owner could choose to destroy the original when purchasing the NFT. Luckily, the artist’s estate stepped in, advising that the owner had no legal status to create derivative works like this and that the owner did not own the copyright.

Other “stunts”, as Ossian Ward who is an author and art critic, called the event “Morons”, took place. Natasha Che, founder of audiobook platform MySoundWise, bought and destroyed a diamond worth $5,000 and sold her NFT for $17,600.

Recently, NFT collector Soban Saqib purchased a rare copy of Frank Herber’s sci-fi classic Dune for $2.9 million. The copy would have been the same one that convinced Hollywood to make it into a screenplay. But Saqib did not buy the copy for himself but on behalf of SpiceDAO, a group of crypto enthusiasts.

The group planned to release the book to the public, create an anime series on it, and support derivative works based on the book. Although these plans are still in progress, they have been hampered by the fact that the group has purchased a single rare copy and not a copyright for the book.

One of the alternative plans that has emerged is the idea of ​​uploading the book in its entirety to the Ethereum blockchain, the underlying technology of NFTs, and then destroying the book. The total project is estimated to cost well over $22 million, as it will take 18 ETH ($56,000) in transaction fees to upload each page to the blockchain. The set will be sold for a profit of $13 million, according to reports.

However, due to the backlash and negative response, the project’s creator said the book was not on track to be burned even though the other parts of the project continued. “It says (optional) in the proposal and so far the sentiment is quite negative, so I don’t think you have to worry about the book,” said Xatarrer, the creator of the proposal.

Why are physical assets destroyed?

The reason for the destruction of physical assets is different for everyone. In the case of Xatarrer and the copy of Dune, it was simply an “incredible marketing stunt” according to Xatarrer himself. NFTs are quickly becoming a way to earn huge amounts of money for individuals around the world, and stunts like destroying the original creation not only create hype around the NFTs list, but also attract more attention from media. The fact that the original artwork is not physically available is also a factor.

But crypto advocates like Che take a different stance.

“If you make an NFT of a real diamond and the diamond itself is destroyed in a fire tomorrow, you still have the same asset. Because the token still exists and is in limited supply as before. Nothing has changed. What NFT does to the concept of an asset, few people understand,” Che tweeted.

These people call NFTs revolutionary in the way they transform the concept of assets and the ownership of those assets.

Whether they are right or wrong, only time will tell.

(Edited by : Thomas Abraham)