NFT market top signal? Fake Banksy nets over $1 million in ETH from NFT sales

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As the Crypto Twitter community debates the fair value of Cryptopunks and other NFTs rising to sky-high valuations, there’s at least one clear sign of the digital collectibles market growing irrational: An individual posing as Banksy, perhaps the most famous living artist, has netted over $1 million in Ether (ETH) in NFT sales. 

Starting on Sunday, Feb. 14, frequent browsers of the NFT marketplaces Opensea and Rarible noticed an account named “Pest Supply” with branding and nonfungible tokens made in Banksy’s signature graffiti-stencil style. Many were quick to jump in, given the “real” Banksy’s habit for pop-up installations:

I either just blew $750 or got the deal of lifetime on a Banksy… we shall see. #ethereum #nonfungible #digitalasset #nft via @rariblecom

— OnTheBrink (@Brinkster0x) February 19, 2021

Wallet profiler Nansen shows that the individual’s listed address first became active on Feb. 13 and was most active yesterday, Feb. 19. Before Opensea wiped much of the account history and disabled further sales, the account’s records showed hundreds of sales to buyers ranging from 0.116 ETH to over 60 ETH for a piece titled “NFT morons.” Noted whale wallet 0xb1 also made a few purchases, including one transaction worth 34 ETH, or $68,000.

In an email obtained by Cointelegraph, Banksy’s “legal guardian,” Pest Control, has denied any association with the NFTs. Likewise, the individual has indicated that they are selling knock-offs, comparing themselves to artist Elaine Sturtevant, who was known for inexact replicas of more popular artists’ work, on their Rarible bio.

The account has taken in 512 ETH total, per Nansen, with nearly 430 ETH sent to a secondary address. The individual’s Rarible page includes a set of screenshots and Etherscan transactions ostensibly proving 23.5 ETH in donations to Save The Children, a humanitarian organization — less than 5% of the individual’s total haul.

Duped collectors are now left wondering, however: Were we tricked? Could it be a double-bluff and a genuine Banksy installation? Do the NFTs have value either way?

Real or fake? Who cares?

Max Osiris, a prominent crypto artist, tipped off the community that Banksy’s “legal guardian,” Pest Control, had denied any association with the NFTs in an email: 

Re: Banksy @rariblecom thing

“No way shape or form”

— MÅxXx Ø$iR!S :://:: httpxx :://:: (@maxosirisart) February 19, 2021

The email exchange, which Osiris forwarded to Cointelegraph, shows Osiris asking if the NFTs are Banksy works listed “legit undercover,” and Pest Control responding by saying “there isn’t an affiliation in any way, shape or form.” Cointelegraph has reached out to Pest Control and received no response. 

This alone doesn’t prove that the NFTs are faked Banksy work, however, as Pest Control is known for denying association with ongoing installations. Instead, the individual’s Rarible page is now the clearest indication that they are not associated with Banksy.

“Locked by decentralized OpenSea as they have no idea who Elaine Sturtevant is and know nothing about art history. This is art history in making,” reads the individual’s bio.

Sturtevant is known for recreating the works of more famous artists from memory, a method that some believe raises philosophical questions regarding the nature of authenticity and originality. 

The art blog NFT Art Review supports the view that the fake Banksy is working in this mode, writing that the individual performed “phenomenal appropriation art that dissects the perception from the collecting circle and how value can be created from satire.” 

The individual may have updated their Rarible bio on Friday night in direct response to the the blog, which was published on Friday morning. 

Osiris believes it’s ultimately up to the collector to make these value judgements, and it’s also up to them to protect themselves from fakes — whatever that means.

“Yes, I think art has value even if it’s a fake because it’s up to the collector to figure out what they’re getting. In a sense this is a pretty successful art project, especially if the money goes to where they claim it will go,” he said, referencing the individual’s charity efforts.

Two of the currently listed works done in Banksy’s style are priced at over 100 ETH, or $200,000 each. The individual claims to have donated roughly $47,000 to charity.

Signs of froth

Noted NFT collector-whale Pranksy marked perhaps the clearest sign of an overheated market with his own NFT run, a true hat-on-a-hat named “Pest Demand.”

While he says he made the run in an effort to “mock” the fake Banksy, he instead made 12 ETH, or $24,000, in sales.

“People bought it because they are all euphoric,” Pranksy said.

Artist “Twerky Pepe” highlighted the absurdity of the situation with a tweet, in which they promoted their Pranksy purchase as either a good investment or a fun, ironic buy (the Cointelegraph weekend editorial team was unable to divine which):

I am the owner of a fake Banksy but an original prank by Pranksy


— Twerky Pepe – The Pumpiest NFT Collection (@TwerkyPepe) February 19, 2021

Osiris agrees that the collectors and speculators are overeager at this stage in the market and says that the artist, in fact, exploited those very sentiments. 

“It’s a clever slight-of-hand move by someone who timed the excitement of ‘celebrities’ coming into the space, the mystery of Banksy’s modus operandi, and Rarible’s verification system,” he said. The individual was able to gain a Rarible “yellow checkmark” because they were not, in technicality, posing as Banksy, just using Banksy’s style and legal likeness.

It’s mania that may only get worse, he said.

“The frenzy around NFT’s has created a sort of monster where people are trying to rush in and be the first to get something that becomes valuable and fail to look deeper or do more research.”

Sales for the individual’s fake Banksies continue apace, with at least a dozen NFTs purchased in the last twelve hours. 

No-loss lotteries appear to have found a snug product-market fit. 

Just a few days after the airdrop of their governance token, POOL, the self-styled “savings game” PoolTogether has cracked $50 million in total value locked with ease, currently sitting above $51 million spread between DAI, USDC, UNI, and COMP lottery pools.

PoolTogether aptly ‘pools’ user funds and deposits them into decentralized finance savings protocols, using the interest as prizes for randomly-selected winners and returning the initial funds to buyers — thus creating a “no-loss” lottery.

While the project stalled below $10 million in total value locked for months, growth has been explosive ever since the POOL governance token airdrop on February 17. According to a Tweet from the team, a day ago the project had $34 million in TVL — it has since grown 33%.

$34 million deposited!

~$47,000 in no loss prizes being awarded this week!

— PoolTogether (@PoolTogether_) February 19, 2021

PoolTogether founder Leighton Cusack points to the distribution model for POOL as a partial explainer for the protocol’s growth.

“As part of the initial decentralization, 5% of total POOL supply (500,000 tokens) were allocated to be distributed automatically to all no loss prize pool depositors over the next 14 week,” he said in an interview with Cointelegraph.

The distribution program, one which is conceptually similar to liquidity mining, is part of a larger effort to “get the token into the hands of users.” Cusack says that of the 1.5 million tokens airdropped on the 17th, (15% of the total supply), 600,000 have been claimed.

Another reason for the growth is entirely organic, however: the more depositors, the more appealing the prize pool.

“The prizes are MUCH larger than they have ever been. Right now the protocol is on track to aw1ard over $60,000 in prizes in the next 7 days. So the higher prizes is attracting more people to deposit,” he said.

The next step for the protocol will be to build on the promising growth. Cusack says that integrating with more savings protocols and moving to a layer-2 in an effort to duck Ethereum’s rising gas fees are priorities, but ultimately those decisions are now out of his hands.

“Since the protocol is now decentralized though, it’s really up to members of the community to drive that process. There is a strong community around the protocol already and if you anyone wants to get involved just hop into the Discord.”

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