While 2021 saw high-value NFT sales, a surge in cryptocurrency prices, and new entrants to the space, the past year saw a slowdown in trading and a prolonged crypto winter. Ethereum, which powers many popular NFT projects, was trading at around $4,000 a year ago but is now down to about $1,195. The global crypto market cap, which was once valued at around $3 trillion, currently stands at around $796 billion.
The Wrapture Project and Its Rules
Holders of Dmitri Cherniak's NFT art project-meets-social experiment, The Wrapture, were instructed not to move, list, or sell their assets for a year. The project consists of 50 algorithmic art pieces made available to holders of Cherniak's Eternal Pump collection, launched in December 2021. It is a part of a social experiment and community-building exercise. If no one broke the rules by moving, listing, or selling their asset for a year, the project would be capped at 50 editions, and holders would be free to move their art without consequence. However, if one collector broke the rules, the remainder of the 666 editions would be released to the public for minting, potentially diluting the value of the project.
The Wrapture Holders' Decision to Hold Onto Their NFTs
Despite the uncertain market conditions, many Wrapture holders chose to hold onto their NFTs and wait out the year. Prominent collector Vincent Van Dough, who owns eight Wrapture NFTs, said he was hoping they would hold, and collector Ayybee, who holds Wrapture #40, said they considered "all of the various possibilities as time passed" when deciding whether to wait an entire year to derive any monetary value from their digital asset. "One year is a millennium in this space," Ayybee said. Others have been motivated by communities to somehow naturally retain their NFT. Matt Miller, the owner of Wrapture #24, said the Wrapture/Eternal Pump Holder group had become very close over the past year and that it would be not only unfair to his fellow collectors participating in the experiment but also a poor financial decision to flood the collection supply with 616 more outputs.
The Wrapture Project as a Commentary On Flipping Culture
Cherniak's Wrapture project was, in part, a commentary on the culture of flipping NFTs for profit. In early 2021, the artist had success with two NFT projects on the generative art platform Art Blocks – Ringers and Eternal Pump. Ringers was a 1,000-edition, algorithmically generated project based on strings and pegs, while Eternal Pump was a 50-edition hand-coded animated project that referenced the culture of "pumping" up the price of an NFT. Cherniak said he wanted to create a project that subverted the flipping culture, and the Wrapture rules were designed to encourage holders to take a long-term view of their NFTs rather than looking for quick profits.
The Outcome of the Wrapture Project
In the end, all Wrapture holders followed the rules and held onto their NFTs for a year. Cherniak said he was "amazed" by the outcome and that the project had exceeded his expectations. "I always rooted for it to hold," he said. "I was not sure it would happen, but I hoped it would." The artist also stored one of the Wrapture NFTs in his own vault, meaning that he could have technically broken the rules at any point, leaving other collectors to face the consequences. The success of the Wrapture project and the collective decision of its holders to follow the rules and wait out the year highlights the trust and patience that can exist within the NFT community, even in the face of market uncertainty.
The Future of the Wrapture Project
Now that the year is up, Wrapture holders are free to move, list, or sell their assets without consequence. It remains to be seen how the project will fare in the post-hold period and how the decision to limit the total number of editions will affect its value. Some collectors have already started listing their Wrapture NFTs on marketplaces, while others are holding onto them as a long-term investment. Cherniak said he plans to continue working on NFT projects in the future and is considering releasing a follow-up to the Wrapture project. "I'm very happy with the outcome and grateful to the community for their support and participation," he said.
The Current State of the NFT Market
While the past year has been challenging for NFT holders, the market has shown signs of recovery in recent months. Ethereum, which powers many popular NFT projects, has seen its price rise from a low of around $1,100 in May to around $1,700 at the time of writing. The global crypto market cap has also increased from a low of around $500 billion to around $1 trillion. While it's difficult to predict the future of the NFT market, the Wrapture project's success and its holders' resilience show that there is still hope and potential for growth in the space.