The State of Solana 1/1 Art Market: A Comprehensive Deep Dive

Dive deep into the state of Solana 1/1 art market, ft. projects like Exchange.Art, Collector.sh, DRiP, Mallow.Art, 21DAO, LeDAO, and more!

Traditional Fine Arts is a massive ‘elitist’ market, with a gross of $64 billion in 2019. Investments in fine artwork have yielded annualized returns of approximately 7% over the past 35 years. However, the traditional art market is plagued by dealers who charge significant commissions on each sale, and royalties are nearly unheard of. Notably, Van Gogh died penniless, leaving his family with very little, while galleries and collectors continued to amass fortunes from his works.

Traditional marketplaces have significant drawbacks, with the primary issue being the lack of artist royalties. Despite the exorbitant resale prices their work commands, most artists have not received any royalties. Several reasons contribute to this:

1. Tracking secondary markets proves challenging when it comes to enforcing royalties. The difficulty lies in monitoring these markets effectively to ensure artists receive their rightful compensation.
2. While certain laws exist to protect artists’ resale rights, enforcing these rights can be laborious and costly, involving extensive legal paperwork. The inherent confidentiality surrounding transactions in the art world further complicates matters.
3. Negotiations concerning secondary markets have traditionally been accessible only to established artists with substantial institutional support. A striking example is Jeff Koons’ Rabbit, which was resold at Christie’s for an astonishing $91 million, setting a record for the highest price achieved by a living artist in the secondary market.

Other factors, such as the lack of provenance for artworks (no way to trace previous buyers and prices) and the high costs associated with galleries (typically ranging from 50–70% of the artwork’s value), further contribute to the drawbacks of traditional marketplaces.

With NFTs now representing digital fine art and utilizing internet-native currency, coupled with the early successes of artists like Beeple, XCopy, Assange, and Pak, who have garnered millions through groundbreaking sales, we find ourselves at the beginning of a significant snowball effect.

In this essay, we will delve deeper into the Solana 1/1 NFT Market, exploring various projects, communities, and potential opportunities.

What defines a 1/1 Art NFT?

A 1/1 NFT (also known as a 1-of-1 NFT or one-of-one) is a unique creation crafted by artists who deeply value their craft. Unlike NFT collections driven by speculation, utility, and community, the 1/1 NFT scene is solely driven by art. Launching a 1/1 NFT doesn’t require a team or a roadmap; all an artist needs is exceptional art.

1/1 NFTs can encompass various forms of art, such as drawings, photography, music, writing, trading cards, videos, or even podcasts. This is ideal for artists who prefer to offer only one copy of their art for ownership, such as a music video, photograph, or drawing.

However, for artists desiring broader availability for their art, they can create “editions” of their work, which can be either limited or unlimited in number.

The 1/1 Market consists of two primary stakeholders: Creators (Artists) and Collectors (Buyers). These stakeholders are connected through marketplaces like Exchange Art, which facilitate the minting and listing of NFTs while enabling collectors to purchase and showcase their NFTs!

Why do we need a 1/1 NFT marketplace like Exchange Art instead of existing NFT marketplaces such as Magic Eden or Tensor?

1. More collection-focused: The major NFT marketplaces on Solana primarily catered to enormous collections supported by developer-led teams, excluding independent artists from uploading their work. This preference is driven by the pursuit of larger markets and revenue-making opportunities. However, independent artists have distinct needs that differ from those of the teams managing the majority of NFT collections.
2. Different buyer journeys: In marketplaces like Tensor, PFP traders are primarily motivated by speculation, considering factors such as floor price, rarities, and community support when making purchase decisions. Conversely, the buyer’s journey for art collectors is unique. They seek to understand the artwork’s history, significance, and the artist’s brand, appreciating the intricate aesthetics in detail.

Why Artists should choose Solana?

While established ecosystems like Ethereum provide higher capital leverage and network effects, Solana offers unique advantages that are “Only Possible on Solana”:

1. Low Gas Fees: Secondary markets play a crucial role in the NFT space, and low gas fees are vital for enabling cost-effective and swift trading in these markets. Moreover, minting costs on Solana are significantly lower than on Ethereum, making low ticket-size auctions much more accessible to those priced out on other chains.
2. Standards like NFT Compression and pNFTs: With infra projects like Metaplex, which has developed stellar standards to help artists with:
   a) pNFTs: Enforce royalties at the standard level by specifying which programs can transfer their NFTs.
   b) NFT Compression: Drop art at a very low cost. Mint millions of NFTs for just a few hundred dollars.
   c) Trait Swapping: Enables holders to trade and collect traits on their NFT in a controlled, composable, and fee-gated environment that produces reliable new revenue streams for artists.
3. Community: The vibrant Solana NFT community has facilitated over $4 billion in total NFT sales volume, solidifying its position as the second-largest chain after Ethereum. Even during the bear run, Solana’s NFT sales volumes have displayed remarkable resilience.

The State of Solana 1/1 NFT Marketplaces:

Let’s delve deeper into the various marketplaces one by one that serves as the backbone of the 1/1 art scenes, much like Amazon does for e-commerce!

Exchange.Art: The Torchbearer of Solana Art

Started in 2022 after raising $3.2 million in the seed round, Exchange.Art is now the largest 1/1 Art NFT marketplace on Solana. It supports all types of artwork like 1/1 Pieces, Editions, and Series. Additionally, it boasts some cool features like:

1. Artdrop [Distribution]: Enables artists to mass gift their collectors.
2. Exhibitions [Curation]: Enables artists to exhibit their work with customizations and lets them narrate the story via their art.
3. Ramps [On-boarding]: Enables artists to accept payments via credit card or ETH, powered via Crossmint.

Exchange.Art Stats

Exchange has embraced an artist-first approach, exemplified by the introduction of ‘the Exchange Royalty Protection Standard’ in response to the royalty debate. This feature allows creators to opt-in for perpetual royalties enforcement, making their art NFTs exclusively tradable on Exchange.Art. This prevents bad actors from engaging in OTC trades or listing the works on platforms that disregard royalties. Furthermore, they have recently introduced “Zero Seller Fees,” which means artists will receive 100% of the funds they earn!

In addition to the tech offering, they provide educational content on YouTube, offer free 1:1 office hours with their senior curator, host focused Twitter Spaces, publish bi-weekly art editorials, and share daily marketing content for artists from all price ranges across all their channels. Furthermore, they extend 24/7 customer support and assistance.

Code Canvas: The Generative Art Initiative
From the same team behind Exchange.Art, Code Canvas is the first and only long-form generative art marketplace platform on Solana that leverages pNFTs. Long-form generative art is created using an algorithmic approach, and the artist’s code is stored on Solana.

Code Canvas

The Rise and Fall of FormFunction:

Launched on Feb 3rd, 2022, FormFunction was one of the first 1/1 NFT marketplaces on Solana, which raised $4.7 Million in the seed round. They had more than 4000+ creators: over 60% of whom have made at least one sale, 600 creators made at least $1,000, and 70 creators made at least $10,000.

In the midst of the FTX crisis during November 2022, FormFunction was going strong by not just being the #1 SOL 1/1 NFT Marketplace by 7-day volume but also the Top 3 NFT Marketplace on Solana after Magic Eden and Hadeswap — having clocked 34,210 SOL in volumes.

However, on March 29th, Formfunction announced that they would be shutting down the platform, which sent shockwaves to the Solana Art community, as everyone loved Formfunction’s product. While the exact reason is unknown, lack of roadmap, team vision, and high burn rate seems to be the reason, which got amplified by the market conditions.

On the brighter side, they fully open-sourced the code for Formfunction, which was widely appreciated by the community. This implies — anyone in the community can put together a small team and create their own version of the product or use it as a starting point to make something completely new.

Rising Marketplaces: Mallow, Collector, and 3Land

In an effort not only to capture market share in the Solana art scene but also to expand the overall market, new-age marketplaces are being launched. Among the major ones are:

Mallow.Art:

One of the hottest 1/1 marketplaces emerging on Solana, which is deemed the fork of Formfunction and intended to fill up the void left by Formfunction. Mallow.Art aim to showcase the next wave of Solana artists and provide artists with the resources and community tools they need to grow with features like Editions and Creator tipping.

Collector.sh:

Collector.sh is an art discovery platform that makes the art discovery process simpler. It’s like any other marketplace, but more collector focussed, hence socially curated. One of their unique features is our free 2D galleries, which allow collectors to showcase their collections and introduce others to their favorite artists. One can search for famous collectors by their username and also buy their art and make a bid.

3Land:

3Land is a captivating art platform that primarily focuses on experimenting with 3D NFTs and the metaverse. It offers a plethora of possibilities, including building art galleries, engaging P2E games, 3D storefronts for brands, casinos, and even entire-themed metaverses for communities, among many other exciting features!

Incumbent Marketplaces: Magic Eden and Solsea

While these are not specialized art marketplaces like Exchange.Art, Marketplaces like Magic Eden and Solsea do have 1/1 art as their offering and are doing significant volumes:

SolSea: Provides buyers with a wide range of media types like photography, CGI, gaming, literature, comics, and more and allows artists to create exhibitions and mint 1/1s. It has some unique features, like SolSea’s licensing framework, helping artists choose a license, and has done a successful collaboration with Coca-Cola with this brand-new licensee!

Magic Eden: Although Magic Eden is highly focussed on collections, artists can use the auction feature to let the community bid on their artworks.

Another interesting marketplace to watch would be Foster Marketplace, which is like any other marketplace but governed by CircusDAO. It will be interesting to watch how new marketplaces like Mallow.art and Collector.sh do not just compete against existing marketplaces like Exchange.art but also expands the pie of Solana 1/1 NFT Art.

DRiP: A 1/1 Art Experiment

Pivoted from Solana spaces, the Solana-themed storefronts, DRiP is one of the most exciting experiments in crypto. At its very first sight, it’s a platform for free NFT art mints. It’s simple — each week, new artists release collections via the platform, with collection sizes as large as a million. It’s potentially meant to solve the problem of onboarding by distributing millions of artworks for free. To decrease the odds of bot participation and kickstart growth flywheel, users can only get onboarded via invite codes.

Why DRiP for artists?
DRiP started with onboarding crypto-native 1/1 artists like Degen Poet, famous for typewriter-based artwork. For instance, Degen Poet was already selling art as well as editions on Exchange.Art, but DRiP provided him with instant distribution, and all he needed to do was to focus on making cool art, which everyone loved.

Once artists get the distribution and marketing, one could argue that users are more likely to later purchase art from the artists which they initially collected from on DRiP.

What makes DRiP different that other NFT marketplaces?

1. Curation: The curation of artists makes it special, allowing much better discoverability for beginners.
2. Gallery: The gallery feature makes it feel more like a collection of DRiP art and not a speculative asset, where prices are displayed. And these are

In a nutshell, think of it as a “Substack for Artists” — each artist can create their own channel to which collectors can subscribe and start receiving weekly NFT drops. One can even tip/donate to their favorite artists!

DRiP — Number of NFTs Minted

The result? A whopping 18 million+ NFTs have been minted so far. All these are possible because of compressed NFTs, low-cost NFTs that enable the minting of 1 million NFTs at just ~$110. It will be interesting to see how other projects leverage compressed NFTs and use arts as a way of loyalty.

The Artists of Solana: Supply Side

Artists, particularly those native to Solana, are deeply involved in the community and have developed strong connections. Some of the top and most active artists in the 1/1 Solana Art scenes are:

1. Degen Poet: A typewriter NFT artist based on Solana who creates art by physically typing images on a vintage typewriter and then scanning them. Famous for DRiP, his art has garnered over $1.8 million in sales!
2. Laura El: is an illustrator and storyteller from NYC featured in Forbes, Marie Claire, and Cosmopolitan and has sold at Sotheby’s and Christie’s.
3. John Le: is an illustrator and storyteller quickly rising to the top Solana artists; his art has garnered over $2.2 million in sales!
4. Zen0m: Zen0 creates lo-rez pixel art that tells stories in as few pixels as possible. Famous for series like Zen0verse and Glyphscapes.

A few other artists worth mentioning who are doing amazing work in the community are Tolo, Berkin Bagzz, douglas, and Dr. Revel.

Some of the exciting 1/1 collections/series launched are:

1. Boogle: A collection of 100 NFTs of ghosts. Each NFT is a unique 1-of-1 NFT sold via auctions on Holaplex in batches of 3 Boggles.
2. Voxel Monkes: 75 NFTs featuring monkeys with various traits and actions. These NFTs are 3D pixel art (both animated and static)

21 dao: Supporting Artists

21dao is a non-profit community that seeks to support and grow the artist community in Solana. They have been working towards educating artists by curating a list of resources. They also run the Artist Advisor program, which gives artists 1-on-1 access to experienced individuals in the Solana community.

Based on the research done by 21dao, it was concluded that “emerging artists are more preoccupied with personal development, creativity, and above all, the human community than technical issues when it comes to guidance on their future careers. The themes of Connection and Community, Driving and Striving, and Strategy are interconnected as every area of development and concern for the developing artists will involve interaction with a wider community.”

Problems faced by artists

Few other organizations like Ministry Art, U R S, DAM Zine, and CODA (Curation of Digital Art) have been doing amazing work at promoting artists.

Tools empowering artists:

Apart from marketplaces, tools like Metaplex Creator Studio and a no-code interface (think Shopify for NFTs) enable artists to easily create, sell, and manage their art as NFTs. Not just that, artists can decide the type of NFT and have simple in-browser customization options to give a personal touch.

Metaplex supporting 1/1 artists.

Apart from Creator Studio, Metaplex has other tools like Fixed-Price Sale and Gumdrop to help artists. Another tool worth mentioning would be Holaplex, which enables brands to drop limited edition NFTs of arts as part of their campaigns to drive engagement and loyalty.

An upcoming tool worth watching would be Solemna, which can help artists create NFT storefronts like Zora.

The Collectors of Solana: Demand Side

To attract more artists and create vibrant 1/1 art scenes on Solana, an active collector community is crucial. Contrary to artists, who can be multi-chain or both physical or digital, collectors are primarily chain-native. The vibrant NFT community of Solana enables this via initiatives like:

Le DAO:

Le DAO is a group of dedicated art lovers and artists focused on the cultivation and curation of digital art. It’s the art on-chain DAO having 42 members, which represent the most influential collectors of the Solana ecosystem. Each NFT of the ‘Founders Collection’ (current floor price is 500 SOL) represents a piece by John Le, entrance into the DAO, governance, and an equal share of the treasury. The treasury includes all art held by the DAO, along with any SOL and USDC balance.

PenguLove Art Collective:

The community runs an art collective that aims to uplift Solana artists by connecting them with collectors and providing workshops and resources. They also host weekly workshops with some of Solana’s top creators and collectors.

Some of the other interesting collectives worth mentioning are Unstac.xyz (South-East Asian Collective). For better art discovery, there are media organizations like DAM (a decentralized art zine), ShillZine (Solana Art Magzine), and Solcity Radio (Voice of The Arts).

IRL Initiatives: Taking Digital Art, Physical

Solana Foundation and community-powered initiatives have been trying to bring these digital arts into the physical world and curate an art-gallery-like space. A few ones are:

1. Whitesquare helps artists exhibit their art at hacker houses, big ecosystem events, galleries, museums, and wherever art can be shown.
2. JT Liss has been funded by the Solana Foundation to run a pilot program that will financially support creatives in producing their own physical/IRL exhibits within their regions & communities.
3. Culture Hacker has been funded by the Solana Foundation for “Where There’s Smoke,” a generative storytelling/art experience from June to Oct at Art Yard Center.

Apart from such special initiatives, there have been frequent showcases at Solana Hacker Houses as well.

Art Display at Austin Hacker House

What is stopping 1/1 Art on Solana: The Challenges

While the 1/1 art scenes on Solana are lively, they do face their own share of challenges:

1. Smaller GMV (Gross Merchandise Value) is a common challenge in most art marketplaces. While focusing on customer satisfaction and product experience helps attract artists and collectors, it doesn’t always result in higher GMV due to lower volumes on 1/1 marketplaces compared to other NFT platforms. Additionally, the lower ticket sizes, compared to traditional marketplaces, raise concerns about the long-term sustainability of these platforms.
2. Lesser Capital Leverage on Solana: Unlike NFT collections, which typically use volumes as their north-star metric, most 1/1 arts rely on initial mints or primary sales as their primary measure of success. This metric is highly dependent on the capital available in the ecosystem. Considering TVL (Total Value Locked) or stablecoins market cap as a proxy for capital leverage on Solana, it’s ~78/45 times lesser than Ethereum. As a result, bigger artists are more likely to shift towards Ethereum marketplaces like Foundation and SuperRare, giants in this space. Furthermore, we can also expect Solana 1/1 marketplaces to explore going multi-chain in search of a larger market.
3. Artists losing to traditional auction houses: The duopoly — Christie’s and Sotheby’s — controls approximately 40% of the global auction sales and poses a constant threat to the 1/1 marketplaces. Digital art, in comparison to traditional auction houses, does have its drawbacks, such as lacking the premium feel and physical experience of exhibitions, the centuries-old legacy, and the human touch provided by the auctioneer.

What can be done for Solana Art: The Opportunities

The 1/1 Art on Solana is still in its early stages, giving room for plenty of opportunities:

1. Marketplaces: While Solana already has a fair number of marketplaces, there is still room for the creation of more niche platforms by forking Formfunction and building upon it. One possible idea is to establish an Artist-governed marketplace, where artists organize themselves as a DAO and create a platform exclusively for their members. They can set their own marketplace fees and rebrand it under the DAO’s name, allowing for greater autonomy and control. On the business development side, marketplaces can benefit from having specialists and rainmakers who actively work to attract more artists to Solana, thus contributing to the platform’s growth and diversity.
2. Collectors:
   - More Curated Experiences for the Collectors — Apart from the art, providing a unique collector experience is critical for tapping into newer distribution channels. For example, SuperRare recently sold out its inaugural membership pass (RarePass), offering members a new 1/1 piece of artwork from its stable of top artists every month. Creating strong vertical communities is also essential, as they tend to remain sticky due to the social bonds formed among their members.
   - Need more NFT collectives: Solana needs collectives like Flamingo DAO, Further, these collectives can also be very niche to support a particular type of artist; for instance, One-Off was formed to support black artists. These collectives can also power expensive art purchases like PleasrDAO collected Edward Snowden’s Stay Free NFT on April 16th for a whopping 2,224 ETH (~$5.5M USD).
   - Bridging to Solana: To attract more ETH or traditional art collectors, marketplaces can integrate cross-chain solutions like Mayan Finance and utilize on/off-ramp providers such as Moonpay, Ramp, Mercuryo, and Crossmint to ensure a smoother onboarding process. Additionally, tapping into chains like Bitcoin, known for its significant capital leverage (as already seen with Ordinals), can prove to be an effective and strategic approach.
3. Artists: Prioritize indexing crypto-native artists over traditional ones. While there may be exceptions, reputed traditional artists could potentially lack community engagement, rely on past laurels, and undervalue NFTs. In contrast, emerging artists work diligently, actively engage with their audience, support fellow artists, and build their communities, rather than seeking validation solely from existing establishments.
4. Art Integrations: To enable better discovery of art and increase commercial value, 1/1 arts can be more integrated into DeFi, luxury brands, and web2 brands. For instance, a web2 brand entering Solana can run loyalty programs via 1/1 art drops.

Closing Thoughts: Tricky TAM

Disrupting an incumbent industry of traditional art is undoubtedly challenging. However, Solana’s tech and vibrant community hold a promising opportunity to establish a new cultural paradigm. To succeed, increasing the Total Addressable Market (TAM) becomes crucial. This requires not only attracting more collectors, both from the traditional art and crypto-native audiences but also enticing more artists to join the platform.

Despite stiff competition from Ethereum, where artists and marketplaces may consider shifting for a larger TAM, Solana can still capitalize on the immense potential for growth within the crypto market and capture market share from the existing 10k collections.

To achieve this, we need to emphasize clearer narratives and present compelling case studies that showcase digital art’s value beyond mere speculation and short-term flipping. Demonstrating its emotional significance and long-term returns will help solidify digital art’s position as a valuable and meaningful investment. With such efforts, Solana can truly transform the art world and carve a distinctive place for itself within the crypto ecosystem.

Cheers for staying with me — Excited for what’s next for the Solana 1/1 Art!

Feel free to contact me at Yash for any suggestions or if you have any opinions. If you find this even slightly insightful, please share it — it justifies our weeks of effort and gets more eyeballs :)

Special thanks to Pedro and Neil, who pushed me to explore this topic, Sitesh for the help in those awesome graphics and 0xbanana, Magellan, Nate, Fried Ghost, and Larisa who reviewed and provided insights at different stages of the draft.