Non-fungible tokens (NFTs) present luxury brands with a pricing dilemma: high prices sustain quality inferences but invite visible failure on transparent blockchain markets, whereas low prices stimulate demand but anchor perceptions downward. This research investigates zero pricing (free distribution) as a strategy to navigate this dilemma. Analysis of 65 NFT collections from 32 brands on OpenSea and 22,841 posts on X is followed by six experiments (N = 1,924). Low-priced NFTs inflict the most severe loss of brand luxuriousness, yet free NFTs attenuate this loss to levels indistinguishable from comparable pricing (Study 1). This attenuation does not extend to physical products, implicating congruence between inferred cost structure and zero pricing as a governing condition (Study 2). When secondary-market demand declines, free NFTs weaken failure inferences that otherwise erode perceived luxury; however, this buffer dissipates when the NFT features flagship brand elements (Studies 3a-3c). When demand increases, free and paid NFTs yield equivalent recovery (Study 4). Free distribution thus caps downside risk without forfeiting upside potential. These findings advance the zero-price literature by establishing inferred cost structure as a boundary condition for the anchor-shift mechanism and equip brand managers with a pricing approach calibrated to the transparency of blockchain-based markets.
Open access
Consumer Behavior in Brand Consumption and Identification
Non-fungible tokens (NFTs) are assets on a blockchain that represent ownership of digital art and are traded on NFT marketplaces. The NFT market on the Ethereum blockchain was monopolistic until the end of 2022, when a new marketplace entered and captured a significant market share. This paper collects transactions from these marketplaces to study the effects of increased competition on the incumbent marketplace, artists, and investors. While competition had positive effects by reducing transaction costs, increasing trading volume and attracting new users, it decreased the profits of artists, discouraged them from creating new artwork, and thereby reduced the supply of new assets. I also study user migration, multi-homing behavior, and market segmentation, and compares the results with the predictions from theories of platform economics.
Non-fungible token (NFT) markets are thin and typically settle in a cryptocurrency, so stress in the settlement asset can translate into abrupt drawdowns. This letter asks whether observable Ethereum (ETH) risk states provide an ex-ante ranking of crash risk in a curated art-NFT marketplace. Using SuperRare sales aggregated to a daily price proxy (2021–2023), we sort days by (i) 7-day realized ETH volatility and (ii) the filtered high-volatility probability from a two-state Markov-switching model. Forward 30-day drawdown crashes are sharply monotone across state quartiles: for example, a 30% USD crash rate rises from 9.9% to 38.8% from the lowest to highest volatility-probability quartile. Because crash windows overlap mechanically, conventional logit inference is overconfident; we therefore report main results as conservative linear probability models with Newey–West HAC errors and a moving-block bootstrap (logit results appear in the appendix for comparison). We further confirm results using a fully real-time state proxy based on an expanding-window volatility threshold, and document that crash predictability is strongest during the 2022 market stress episode, consistent with ETH risk regimes activating precisely when tail risks materialise. The settlement asset operates as a tail-risk switch for art NFTs, with limited corresponding mean-return predictability.
Despite trading volumes in the tens of billions, NFT markets are illiquid: median quoted spreads of 48-200% far exceed equity levels, though execution-based measures covering nearly all sales yield effective costs of only 2-5%. Using over 410 million orderbook events-including, for the first time, comprehensive bid-side data-across six major collections, we document a distinctive institutional response: a two-tier orderbook in which collection-level floor bids, rather than token-specific orders, supply the dominant source of buy-side liquidity. A small number of algorithmic market makers provide these bids but face adverse selection inherent in collection-level offers, experiencing market-adjusted post-purchase returns of-3% to-7%. In panel regressions, collection identity absorbs over 30 percentage points of R-squared , dominating all observable spread determinants. A comparison of the same 10 000 assets under two market structures reveals that the native bilateral marketplace achieves tighter spreads (54% vs. 200%), suggesting that ease of bidding generates liquidity activity but not price efficiency.
Rarity is a key determinant of value in non-fungible token markets, yet its measurement remains fragmented, opaque, and theoretically underdeveloped. We analyse the statistical and combinatorial rarity metrics used by major platforms and show that most reduce to transformations of the Pythagorean means. The widely-used OpenRarity metric produces rankings identical to the geometric mean of attribute frequencies and is therefore not a new methodology. However, this approach admits a coherent probabilistic interpretation only under the assumption of trait independence. Alternative arithmetic- and harmonic-mean metrics lack theoretical justification, while the Jaccard distance is structurally biased when metadata omit missing traits. When metadata are standardised appropriately, Jaccard-based rankings are identical to the arithmetic mean ranks. These findings explain pervasive inconsistencies in rarity rankings and help explain the weak empirical relationship between price and rarity. We propose a standardised, theoretically grounded framework for rarity measurement that accommodates dependence structures and corrects metadata bias.
NFTs provided an extraordinary real-time laboratory for bubble economics: returns were exceptionally right-skewed, illiquidity pervaded even the most active platforms, and a handful of trades drove aggregate performance. Investors extrapolating from realized returns without recognizing selection bias and survivorship faced a substantial risk of disappointment. As our data and simulations confirm, successful NFT investing during the bubble required an almost perfect confluence of timing, liquidity, and luck. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org .
AbstractThis article investigates the economic and behavioral feasibility of creating personalizedcryptocurrencies (Fan Coins) linked to the performance of soccer players, using quantitative methods inEconometrics, focusing on box office revenue, sponsorships and sports betting. The analysis includes theThe cases of Diego Ribas (Flamengo), Neymar (Santos), and top scorers from São Paulo and Palmeiras.proposal is to analyze how reputation and sports performance can be transformed into digital assets withmeasurable value. Furthermore, it is proposed to use artificial intelligence systems to manage sponsorportfolios and a fan club application with a subscription system to foster a new sports business model basedon data and personalization.Keywords: Fan Coin; Cryptocurrency; Econometrics; Sports Economics; Game Theory;Behavioral Finance; Sports Betting; Artificial Intelligence; Financial Modeling; Digital Sponsorship
This article examines the NFT market and art tokenization in the context of money laundering. It explores the evolution of the art market toward digitalization, the definition of NFTs, and their legal and technical aspects. Additionally, it highlights the rapid growth of the market and associated risks, such as fraud, sanction evasion, and money laundering. It discusses mechanisms for concealing illicit funds, as well as the lack of clear regulations and oversight of NFT platforms within the AML/CFT framework. It emphasizes the need for regulatory clarification, the establishment of transaction registries, and addresses other unresolved issues related to NFTs, including intellectual property protection and tax obligations.
Mazin Nawwaf Assi, Sumeet Kaur, Swati Chaudhary, Pompi Das Sengupta · 7 authors
With the fast adoption of artificial intelligence in the art and cultural industry, the production, curation, distribution, and management of creative works have been radically transformed. Intelligent systems that allow artists, curators, institutions, platforms, and intelligent systems to work together in continuous interaction are now known as AI-driven art ecosystems. The paper explores management innovation as it manifests in AI-based art systems, the changes in managerial practices, forms of governance and decision making, in reaction to advanced computational creativity and data-driven work. The paper conceptualizes AI-based art systems as multi-layered systems that include creative production, curatorial intelligence and digital distribution systems such as online galleries and non-fungible token-based markets. It emphasizes the ways in which management innovation is developed in the form of a workflow redesign that combines automation and human-AI partnership to allow efficiency without sacrificing artistic intent and cultural sensitivity. Additionally, the paper focuses on the governance innovations that respond to the issues of transparency, accountability, ethical compliance, and authorship attribution in creative settings with algorithms mediating them. The resource orchestration is considered a key managerial competency with a focus on the strategic alignment of data resources, innovative talent, and computing resources. The study further examines the AI-enhanced decision-making in the context of art institutions and how the predictive analytics and the intelligent recommendation systems can be used in audience engagement prediction, curatorial planning, and portfolio management. Based on the selected case studies of AI-integrated museums, hybrid creative studios, and global AI-art hubs, the paper finds the best practices and benchmarking perspectives.
Sandip Sane, Dr. Diksha Tripathi, Anagha Bhope, Aditee Huparikar Shah · 7 authors
One of the ways in which blockchain technology is transforming the visual arts ecosystem is by providing decentralized, transparent, and verifiable systems of ownership, distribution, and value exchange of digital art. This paper analyzes how blockchain has been disruptive to visual arts in modern times, specifically in non-fungible tokens (NFTs), creative economies, and artist-collector relationships. Historically, the digital artworks were associated with the issues with provenance, copyright protection, scarcity, and justifiable monetization. Blockchain overcomes these weaknesses by providing immutable registries, smart contracts, and tokenization to allow artists to have verifiable ownership, determine authenticity, and earn automatic royalties on transactions in the secondary market. The study takes a conceptual and analytical structure by synthesising the extant literature, platform case studies and new blockchain-based art markets to assess the worth of NFTs in redefining artistic value, authorship and market forces. The results suggest that blockchain makes global art markets more democratic by decreasing the use of intermediaries including galleries and auction houses, which are central, and thus giving power to independent and new artists. Simultaneously, it cultivates new creative economies in which digital scramble, community contribution and speculative finance overlap. Nevertheless, the paper also singles out some fundamental challenges such as environmental sustainability issues, market unpredictability, regulatory ambiguity and the issues of artistic legitimacy and cultural value. The article presents the argument that although blockchain does not substitute the traditional art institutions, it supports them by providing hybrid ecosystems through integrations of physical and digital practices. All in all, the study suggests blockchain as a revolutionary infrastructure to the visual arts, reinventing ownership, trust, and economic frameworks and proposing a sustainable, ethical, and inclusive future to enable the long-term development of digital art ecosystems.
Dec 23, 2025·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Tejas Kotha, Kushagra Bhatnagar, Leona Chandra Kruse, Matti Rossi
NFTs (non-fungible tokens) promised the interaction of artists/creators directly with their collectors without the need for any intermediaries, but the realisation was quick that such a technology, instead of getting rid of intermediaries, reintroduced new intermediaries in the form of NFT marketplaces. These marketplaces exhibit diverse features and cater to different user groups. A wide array of governance strategies, such as curation and gatekeeping, are used to steer creativity and interactions in the marketplace, informed by the marketplace's strategy. We examined this diversity by identifying the 'ideal types' of marketplaces based on these strategies alongside the motivations of the creators to make sense of the growing NFT market and constructed a typology that distinguishes four kinds of NFT marketplaces: Avant-garde, Canonical, Mass Culture, and Coterie. The article also offers practical implications for creators and collectors looking to make informed choices when deciding to participate in a particular marketplace.
The contemporary art world is undergoing a foundational shift, driven by the emergence of blockchain technology and its most culturally salient application: Non-Fungible Tokens (NFTs). This transition marks a move from the physical, gatekept spaces of the "White Cube" gallery to the distributed, code-governed networks of the blockchain ledger. This article argues that this is not merely a change in the medium of art's financialization, but a profound process of decentralization reshaping the core pillars of the art ecosystem-curation, valuation, ownership, and access. We analyze how blockchain disrupts traditional, centralized art market models by enabling peer-to-peer transactions, immutable provenance tracking, and fractional ownership through smart contracts. Crucially, we examine the rise of algorithmic and community-driven curation, where platforms like SuperRare or DAOs (Decentralized Autonomous Organizations) challenge the authority of the traditional curator-institution. A conceptual framework (Figure 1) maps this new ecosystem, while a comparative table (Table 1) delineates the paradigm shifts across key domains. Through case studies of NFT platforms, crypto-art movements, and artist collectives, we demonstrate both the emancipatory potential and the critical tensions within this decentralization. We conclude that while blockchain introduces new forms of transparency, accessibility, and artist empowerment, it simultaneously engenders novel hierarchies, environmental concerns, and questions about the nature of cultural value in a digitally native era. The future of visual culture will be negotiated in the space between the aesthetic aura and the verifiable hash.
Yogesh, Saniya Khurana, Sourav Rampal, Pastor R. Arguelles · 7 authors
Data analytics implementation into the modern art market has changed the way the stakeholders analyze, invest, and interact with art pieces. The art market, traditionally opaque and subjectively valued, is currently adopting data-driven approaches to increase transparency and efficacy, as well as, decision-making. This essay examines the primary importance of the data analytics in transforming the art ecosystem with an emphasis on its uses, advantages, and difficulties. It starts with defining the key elements and classes of analytics: descriptive, predictive, and prescriptive and the technological tools used: artificial intelligence, big data platforms, machine learning algorithms. The tools are then placed in the framework of the art market and discussed on how they can solve the inefficiencies of pricing, valuation, and demand forecasting. Case study examples show how analytics can be used to identify the rising artists, identify the market trends, and prevent fraud risks and manipulation. Alongside these benefits, the paper also mentions such limitations as the lack of data, ethical concerns, and algorithmic bias. Lastly, it also looks into the future opportunities which include blockchain integration, value of digital art and analytics of non-fungible tokens (NFTs). In general, this paper highlights the fact that data analytics is not just democratizing the art investment, but also reshaping cultural and economic value in the ever more digital marketplace.
Non-Fungible Tokens (NFTs) have transformed digital ownership, offering unique representations of assets such as art, collectibles, and virtual property. However, pricing NFTs remains a complex and underexplored issue. This study addresses two core questions: what determines NFT prices? And how are prices set in NFT markets? We conduct a comprehensive literature review and market analysis to identify both endogenous and exogenous price determinants. Trait rarity emerges as the most influential intrinsic factor, while cryptocurrency value stands out as a major external influence, albeit with ambiguous effects. Other factors include visual aesthetics, scarcity, utility in games, social media engagement, and broader market sentiment. As to pricing mechanisms, aside from fixed pricing (which is accepted in all marketplaces), NFT marketplaces primarily utilise auctions for art pieces and collectibles— especially English and Dutch formats—which are effective at capturing the buyer’s willingness-to-pay.
Neide Judith Faria de Oliveira, Francisco Carneiro da Silva Filho
A pesquisa discute o uso da tecnologia NFT (Non-Fungible Tokens) no mercado de arte, considerando a exclusividade dessas obras. As NFTs permitem exibição em galerias virtuais no Metaverso, associadas ao blockchain, tanto como ativos físicos quanto intangíveis (propriedade intelectual). A tecnologia reforça noções de herança e propriedade, mas enfrenta desafios como altos custos, falta de regulamentação, consumo de energia e direitos autorais. A pesquisa explora as potencialidades dessa tecnologia e a necessidade de procedimentos claros para garantir transações justas e transparentes no mercado artístico.
Nara Raquel D. Andrade, Oscar William N. de Carvalho, Carlos H. G. Ferreira, Glauber Dias Gonçalves
The market for Non-Fungible Tokens (NFTs) continues to evolve, yet it still lacks robust methodologies to estimate the future value of its assets. Unlike traditional financial markets, NFT pricing is challenged by intangible factors such as the artistic nature of the items and the influence of social and transactional networks among buyers and sellers. This study investigates whether the structural position of participants in the transaction network can serve as a relevant predictor of the future value of NFTs. To this end, we reconstructed the NFT trading network for the period 2020–2021, extracted both structural and transactional metrics of the participants, and applied supervised machine learning models, including deep neural networks. The results demonstrate the feasibility of the proposed approach, achieving 74% accuracy and a global F1-Score of 72%. Interpretability analysis using SHAP values revealed that, in addition to historical price averages, network metrics such as degree and neighborhood significantly contribute to prediction. These findings highlight the role of network dynamics in NFT valuation and point toward promising directions for more transparent and evidence-based pricing methodologies.
Mansi Gawade, Mayuri Hande, Vishakha Kshirsagar, Prof. S. Y. Mandlik
In This paper examines how blockchain technology and Non-Fungible Tokens (NFTs) can benefit the business landscape. NFTs are unique digital assets that represent real-world items and can be traded online using crypto currencies. Unlike fungible tokens, each NFT has a distinct digital signature, making them non- interchangeable. This system empowers artists and content creators to receive payment for their work without the need for traditional galleries. Moreover, NFTs can include a royalty feature, allowing creators to earn a percentage each time their NFT is sold again. Although still a relatively new concept, blockchain has the potential to transform the art and content creation industries by enabling the minting and trading of NFTs. The paper proposes that NFT marketplaces could serve as a central hub for various applications of NFTs.
Abstract New technologies, such as 3D digital rendering, immersive platforms, non-fungible tokens (NFTs) and AI, are creating new opportunities within the fashion industry, including virtual fashion. This chapter discusses how fashion brands communicate virtual products, by analysing the Neo-Ex campaign from Carlings. The study takes its point of departure in the key questions: What arguments are employed to market the garments, and how do fashion brands create a demand for these novel products, as well as attempting to construct a consumer understanding of what this new phenomenon is. Using a multimodal method and a document study, the study analyses campaign material, films, images, and articles, through the lens of brands as cultural intermediaries. Three themes emerged: virtual fashion as a concept for identity construction that advocates creativity , attitude , futurism , and early adopters , as well as communicating that virtual fashion is sustainability conscious. The main contribution is identifying the following three tactics for communicating virtual fashion: utilising emerging technologies for identity construction; educating the consumer; and using sustainability to validating its existence . While the first two tactics focus on building consumer awareness and acceptance, the third highlights sustainability as a rationale to legitimise virtual products.
The unprecedented growth of digital art in the contemporary creative economy has empowered artists to reach global audiences, yet it has simultaneously amplified threats of copyright infringement, piracy, and unauthorized duplication. Traditional intellectual property frameworks, while legally robust, are often ill-suited to address the speed, borderless nature, and technological complexity of digital content circulation. Blockchain technology emerges as a transformative paradigm, introducing decentralized and tamper-proof mechanisms for digital rights management. Through non-fungible tokens (NFTs), smart contracts, and immutable ledgers, blockchain provides verifiable proof of authorship, facilitates transparent provenance tracking, and automates royalty distribution without reliance on intermediaries. This manuscript critically examines the role of blockchain in strengthening copyright protection for digital artists by combining an extensive review of existing literature with statistical survey data drawn from practicing artists across multiple regions. Findings reveal that while blockchain adoption is gaining momentum, barriers such as regulatory uncertainty, high transaction costs, energy inefficiency, and limited user literacy constrain large-scale implementation. The study demonstrates that blockchain can enhance creative autonomy, ensure fair economic participation, and foster trust in digital art ecosystems, but its success depends on legal integration, sustainable infrastructure, and artist-centered governance. This research contributes to the discourse by offering a multi-layered framework for blockchain-enabled copyright systems, bridging technological innovation with socio-legal realities, and outlining directions for future policy and research in intellectual property protection.
Pixels and market cycles both move NFT prices. Non-fungible tokens (NFTs) are unique digital assets, often used to represent ownership of digital art, collectibles, and other media, secured on blockchain networks like Ethereum. The rise of NFTs has led to the creation of a multi-billion-dollar market for digital art and collectibles, making it a key area of interest for researchers, artists, and investors. Using 94,039 transactions from 26 major generative Ethereum collections, this study extracts 196 machine-quantified image descriptors - color, composition, palette structure, geometry, texture, and deep-learning embeddings - and applies a three-stage filter to identify stable predictors for hedonic regression. A static mixed-effects model shows that market sentiment and transparent, interpretable image traits have significant and independent pricing power: higher focal saturation, tighter compositional concentration, and greater curvature are rewarded, while clutter, heavy line work, and dispersed palettes are discounted; deep embeddings add limited incremental value once explicit traits are included. To assess state dependence, a Bayesian dynamic mixed-effects panel with cycle effects is estimated, allowing Composition Focus - Saturation - the ratio of saturation in the central region to the whole image, capturing vividness and concentration at the focal area - to vary across market regimes. Collection-level heterogeneity (brand premia) is absorbed by random effects. The time-varying coefficients exhibit clear regime sensitivity, with stronger premia in expansionary phases and weaker or negative loadings in downturns, while the grand-mean effect is small on average. Overall, NFT prices reflect both observable digital product characteristics and market regimes, and the framework offers a cycle-aware tool for asset pricing, platform strategy, and market design in digital art markets.
This study examines the evolving landscape of art patronage in India amidst the digital transformation, with a focus on the traditional and Non-Fungible Token (NFT) art markets. Drawing on data from the Artnet Art Market Report spanning from 2019 to 2023, the research employs quantitative analysis to compare sales volumes, average prices, regional distribution of buyers, gender representation, artist mediums, market sentiment, and platform dominance. Key findings include the exponential growth of NFT art sales volumes, the premium associated with digital artworks, and the urban-centric nature of NFT art patronage. Gender disparities in art patronage and the dominance of digital artists in the NFT market also emerge as significant trends. The implications of these findings underscore the importance of adapting to digital transformation trends, promoting inclusivity and accessibility within the art community, and leveraging digital platforms for growth and innovation. By bridging the gap between traditional and digital art markets, this research contributes to a deeper understanding of the cultural, social, and economic implications of digital technologies in the arts.
The integration of blockchain technology and Non-Fungible Tokens (NFTs) into Tanzanian art signifies a pivotal moment with transformative potential for artists, drawing on Everett Rogers' Diffusion of Innovations Theory. This discussion explores the implications of merging blockchain and NFTs, focusing on themes like technological decentralisation, cultural empowerment, and associated challenges. Blockchain empowers artists by facilitating direct engagement with a global audience and eliminating the need for intermediaries. It also creates unalterable ownership records, giving artists greater control over their work. NFTs contribute to digitally preserving and sharing Tanzanian cultural heritage, increasing visibility and influence for previously marginalised voices on the international stage. Despite these promising opportunities, integration faces obstacles such as limited technological access and complex legal frameworks, which hinder wider adoption. Addressing these issues requires collaboration to reduce digital inequalities, promote understanding of blockchain technology, and strengthen legal protections. Ultimately, combining blockchain and NFTs could transform the Tanzanian art scene by amplifying cultural voices and protecting heritage in an increasingly digital world. Success depends on effectively managing challenges and capitalising on emerging opportunities.
The rapid adoption of Non-Fungible Tokens (NFTs) has revolutionised the digital art and collectibles markets. NFTs present novel opportunities for creators and investors alike. However, with such opportunities also comes the risk of money laundering through NFTs. The South African digital art market has not been spared from the rising phenomenon of NFTs. This rising phenomenon has brought with it questions regarding whether the South African anti-money laundering (AML) regime can adequately counter the challenge of money laundering through NFTs. This is particularly so if one considers that, generally, the AML regulatory framework for NFTs is still nascent, not only in South Africa, but also globally. Thus, this contribution comparatively examines the AML regulation of NFTs in South Africa to establish the adequacy and efficacy of the country’s AML regime. The paper concludes that while NFTs are still new, they can be dealt with under the blanket regulation for crypto assets and in specific use cases, AML regulations may be applied to them.
This study builds a decentralized authentication system for art institutions to solve the information island problem and combat counterfeiting in traditional art tracing. Through the fusion architecture of blockchain and the InterPlanetary File System (IPFS), distributed storage and cross-chain verification of work metadata are realized. Smart contracts automatically execute ownership registration, cross-border transfer, and other processes, and IPFS nodes ensure immutable storage of high-definition images and identification reports. A prototype system based on React.js and Node.js, integrating Ethereum smart contracts and the MetaMask wallet module. In a simulated commercial environment, a pressure test was conducted on 50 paintings and digital calligraphy collections. The system completed transaction confirmation in an average of 3 seconds, and the mass transaction reduced authentication costs by 62%. Specifically tailored to the practical needs of emerging art institutions in China, the program supports a hybrid collection management model for physical art and NFTs, and provides a reliable technical infrastructure for cross-border art financing.