In the simplest terms, pricing artwork follows the laws of supply and demand, and that holds true for an NFT as much as it does a 200-year-old oil painting.
What’s more complex about pricing artwork is parsing through the terms “supply” and “demand” vis-a-vis a work of art.
The value of an art piece isn’t in its utility, like a car or house, though in the world of NFTs, utility certainly affects pricing. The value of art isn’t in its materials or the artist’s time — though that comes into play for both physical and digital art. The value isn’t even necessarily based on limited supply — as anyone who’s been to the Picasso Museum can attest.
Today, we’re going to investigate the major variables that go into the pricing artwork. These variables are:
- Career history
- Cultural significance
- Production cost
- Utility
Career History
The career of the artist is a huge — oftentimes dominant — factor in assessing a piece. Traditional art world factors include:
- Exhibition history: Where have they shown their work and alongside whom? Who do others consider to be this artist’s peer?
- Sales history: At what prices have they sold work on both primary and secondary markets?
- Career level: How long has this artist been a career artist? What caliber of gallery, collector, and clients have they had over that time?
- Collectors: Mentioned above, but worth reiterating. In web3, it’s easy to find the other collectors of a given artist and to see what other artists — of what caliber and general pricing — are represented alongside your artist-of-interest.
- Rarity: How rare of a piece is this within the artist’s oeuvre? Is this artist highly prolific? Does prolificness devalue the body of work or enhance it? (e.g., Bob Dylan vs. a jingle writer)
- Creation date: At what point does this piece occur in an artist’s career? Certain periods may value higher than others.
In this new web3 paradigm, a few new — but unsurprising — factors come into play, namely social media following (Twitter, Instagram, Twitch, YouTube) and private network activity (Discord, Telegram, etc.). The way an artist represents themselves online can also clue a collector in to how savvy and promising the artist is.
Cultural Significance
Cultural significance as a factor in pricing artwork is more subjective and subject to volatility.
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