How NFT startups are changing the art market

NFTs are changing the art market at a breathtaking pace, so start-ups like Pinsl from Stuttgart want to make NFT trading more accessible and safer. But the hype also attracts questionable providers.

Vinzent von Witten is a founder through and through. He has been active in the start-up scene for about seven years. He talks quickly and in a structured way about topics like AI or blockchain. But when it comes to art, his voice falls silent. Then he takes his time to philosophize about the value of works of art. For a long time, von Witten was looking for a way to combine his passions – starting a company, crypto, technology and art. He found him in April 2021: he founded the Stuttgart start-up Pinsl. This is intended to connect the traditional art world with the NFT market.

NFT stands for Non-Fungible Token. They present an object such as an image on the blockchain. They allow people to own, buy and sell digital files, especially works of art. Each NFT is considered unique. People can still download this, but only the buyer is shown as the owner. At best, this should make trading artworks much easier. Just creating your own NFT, marketing it and finding a suitable buyer is not that easy. And there can also be problems as a buyer – for example, if you are unsure whether the NFT seller really has the rights to the artwork on offer.

Among other things, Von Witten used to work with Hollywood director and Oscar winner Costa-Gavras as a video producer before moving into the start-up world. Since 2015, he has founded several of his own companies. As so often, these did not lead to success, but they teach von Wittem a lot about founding. He has been on the move in the crypto scene for a long time: He also created the Stuttgart Blockchain Future Festival and took care of digitization projects in the financial group W&W, such as a blockchain strategy for board members.

Now he wants to bring order to the wild NFT world with Pinsl. “We are building a user-friendly, serious and legally compliant platform for fine art NFTs,” explains von Witten. This is expected to be launched in June. By January 2022, von Witten had built up the company on his own. Then Nils Dürr joined as co-founder. The founding partners and the first business angels in the project are Johannes Graf Strachwitz and Oliver Rebner from the communication agency 0711, the lawyer Martin Rath and the artist Sebastian Priester. Other start-ups such as Artéq from Vienna and and Fanzone from Berlin also depend on the NFT market, partly for works of art, but also for music or trading cards for fans. But can it really work, or is the hype soon over?

Pinsl wants to give artists “water to swim in”.

“Our platform is primarily aimed at traditional players in the art world,” says von Witten. His team verifies artists, gallerists and buyers so there are no financial, copyright or other issues. “Artists and dealers should and want to concentrate on art – and not on business and formalities,” explains von Witten. “But everyone needs water to swim. Therefore, we offer the art world a safe framework for NFT trading.”

Pinsl wants to take over this complicated part – and also offer a platform where people can exchange ideas and trade. The start-up also wants to offer social functions: “That way the artists can also get to know new potential buyers.” On the one hand, the artists can sell so-called “repro NFTs”: scans or photographs of physical works of art as NFTs. On the other hand, they can sell NFTs of digitally created works of art.

“I came up with the idea for Pinsl because I am friends with many artists, have been interested in art for a long time myself – and create art with my favorite media,” explains von Witten. He has already had a small commercial success: in 2012, the famous London museum Tate Modern included T-shirts with collages of his in its artist shop.

Art Market Expert: Artists should definitely deal with NFTs

Art market expert Arne Freiherr von Neubeck is one who believes in the future of NFTs: “For artists who have mastered the ability to market themselves, there is a great opportunity due to the greater reach of digital art,” he says. As someone who has been involved in art since 2008 and is a major player in the German art market with his company The Global Fine Art, he also knows: “But most artists will fail with it, just like they do in the analog world. .”

Von Neubeck believes that “platforms with a boutique character” like Pinsl can certainly play an important role, “so that artists can position themselves beyond mass-produced goods.” However, these could only help if they “generate enough traffic”. For the very large NFT markets like Opensea have a problem: “The platform is huge. You meet millions of users – but at the same time you also run the risk of getting lost.”

In any case, von Neubeck strongly advises artists to deal with the NFT issue: “If I don’t deal with it, the train will roll by.” The market’s current moment is particularly interesting: “The train is already rolling, but the tracks still need to be laid. It’s happening at full speed at the moment.” As is so often the case: the early momentum brings on the one hand the risk of failure and setbacks – but great opportunities on the other. However, one should not be frivolous: the processes are not easy to understand, “swindlers lurk and the volatility is significant. “

NFTs will find their way into the art market

According to von Neubeck, the NFT hype was so great because the art market came under massive pressure from the pandemic: fairs, face-to-face auctions and cultural events were cancelled. “NFTs have attracted attention as revenue generators,” he notes. People who had not previously dealt with art also expected sales from NFTs: “With them, a completely new target group was introduced to the market. Young people who have made their fortunes primarily through crypto investments.”

Because there are still some uncertainties with NFTs: physical art is usually more constant in price. And whether the price level of NFTs will remain the same is uncertain: “The market is risky and volatile.” The poor environmental record of NFTs may also spoil the party in the long term: this already has many NFT critics. At the same time, according to von Neubeck, there is no turning back: “The trend is irreversible. NFTs will find their way into the art market.”

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