Ethereum vs Tezos

This article is nothing more than an attempt to understand the underlying issues of the "Ethereum vs. Tezos" discussions.

Before going into this, StellarsDAO, which I'm a co-founder of, and me personally, are collecting both on Ethereum and Tezos. Keep in mind, that I used to be slightly biased toward Ethereum due to my personal preference and the false narratives that were spreaded in the past. In this article, I tried to challenge my assumptions and principles, so I hope it'll be fun or educational. I invite you to share your thoughts and debate with me - would love to hear your opinion.

One more thing. Many times I've seen people using the term "quality" when referencing art on a specific chain or a platform and I just think it's an unfair term to describe art. It's a very subjective personal preference disguised as a vague term to make a person using it sound smarter and unbiased. Therefore, I will not use this term in this article or ever.

Let's get started with what really matters.

Provenance

How important is provenance?

This is what the Masterworks website says:

The main reasoning for provenance is to provide a thread of historical significance of the artwork based on its history of ownership. A good provenance increases the value of a painting, and establishing it may help confirm the date, artist, and, especially for portraits, the subject of a painting.

In tradart, provenance of art from centries ago matters a lot - it helps to track a piece to it's creation and help with understanding wether it's authentic or not.

But when it comes to art on blockchain, the concern of provenance primarily revolves around the blockchain where the work was released, rather than its actual ownership history. Every minted piece can be traced back to the creation date with a few clicks and it's quite easy to tell if it's authentic or not.

In the next few chapters, I'll try to describe what I think people mean when reffering to the provenance of blockchain art and tell about a few important factors that people are likely concerned about when discussing this topic.

Native token

Because the majority of transactions on blockchain occur with the use of a native token, the relative value of a piece of art inevitably becomes intricately correlated with it.

However, as we envision the future, it becomes challenging to imagine collectors primarily considering specific blockchains, where the work of art was released, as a dealbreaker. Instead, the focus will likely shift toward the actual artwork, the artist, the importance of the piece or a collection, its extrinsic value etc. Transactions will be done in universally recognized currencies, such as the US dollar or even a CBDC. Large blockchain art sales will transition from marketplaces to auction houses and will resemble current practices observed in places like Sotheby's.

Why do I think so?

It’s hard to get the attention of traditional art collectors. It’s almost impossible to persuade them to buy a crypto token and take an additional risk. Risk number one is the investment into blockchain art — an idea that’s quite new and unproven. Risk number two — is the token impairment.

I believe that the convenience and familiarity of transacting in relatively stable and universally accepted currency will likely drive the future of the art market, while the blockchain will act only as an underlying infrastructure.

So, all things equal, is the question of blockchain irrelevant?

I wouldn’t say so.

Here’s why I think that is.

Community

While intrinsic values and artistic merits are essential, the efforts of representatives and community surrounding art on a chain are necessary for shaping its future.

Curators, influencers, platforms, and the communities around them serve as catalyst for discovery. Sadly, just like in traditional art world — talent is not sufficient for the success. Usually it's about who sees your work.

This is why Artblocks are what they are. Not only they were the first, but they also managed to create an engaging and thriving community around art and artists. There are tens, if not hundreds, of thousands people's eyes on almost every collection release. The chance of getting noticed by people who will see the talent and amplify the success of a collection is probably the best one can get in genart right now.

Yet, in the future, the fact that a popular collection was released on Artblocks wouldn't matter. In isolation, that is. Early AB grails (like curated seasons 1-8) will still likely sell at a premium.

What about tezos?

The art community on Tezos is thriving. The death of HEN gave an impulse to creation one of the most organic and intrinsically motivated communities I've ever seen. One of the underlying factors that drove this motivation was not the most positive in the eyes of most collectors I know (remember #cleanNFTs?), but that's the topic for another time.

Assessing and comparing both communities can be quite challenging since it's crucial not to misinterpret the cause as an effect, but there are a few very important points I want to touch on.

One issue with Tezos is the absence of notable collectors or influencers. This is not to discredit the influence of individuals like <u>@lemon2d</u>, but rather referring to those with significant financial investments who undeniably have a VC money at their disposal.

This issue used to be caused by what I believe to be a lack of infrastructure for collecting. A good and secure multisig was missing from Tezos until very recently. I was looking for a working solutions for at least a few weeks, and we ended up creating our own solution utilizing the Teia contract to facilitate StellarsDAO's collection process.

Second, and maybe somewhat more hard to deal with and unpleasant to realise...

Speculation

Speculation is one of those topics art people prefer not to talk about and not acknowledge its influence on the art scene. But the truth is - it exists and it does matter. I'm not necessarily talking about flipping, although it's quite common and frequent.

The majority of art collectors are investors. Almost always there is an expectation of profit behind every art sale nowadays.

There are plenty of reasons to buy art other than monetary profits - aesthetic appeal, personal connection to a piece, willing to support an artist and many more. However, even if the collector is not looking to sell a piece of art, he would like it to appreciate in value.

People like to be right and make good decisions. And wether it's good or not, value appreciation is the sign of a good decision.

There are plenty of things that can contribute to collectors' long-term investment thesis, and many more that can influence it in a negative way.

Conclusion

In this post, I described the future. But we are not in the future yet. For the collectors of our generation, the uncertainty and the risks that are tied to investing into on-chain art are twofold.

Not only do we have to pick the right piece of art, but make sure it's on the chain that has a chance of surviving till the times when the "provenance doesn't matter" comes.

Naturally, it's hard to escape the comparison of many factors that contribute to the perception of blockchain. Native token performance, community, collectors... It's a vicious cycle that's hard to break.

But in my opinion, all that matters is to try and make good art survive. Each of us, collectors, influences the perception of the chain, art, artists and each other.

And while some maximalists try to push their narratives, try to stay as open as possible and start living in the future.