A major shareholder at a US sportsbook paid nearly $12 million to acquire a non-fungible token (NFT) of digital art, the latest cry among people with money burning in their pockets.
Technology in Business, Technology in Art
CryptoPunk#7523, one of the CryptoPunks series of digital art characters visualized over 10,000 pixels and created by Larva Labs back in 2017, was sold on Thursday’s auction at London’s auction house Sotheby’s to DraftKings’ major shareholder Shalom McKenzie for $11,754,000.
Created in the form of an NFT, which utilizes blockchain technology to authenticate it and certify its originality and ownership, the CryptoPunk#7523 character is one of the sought-after alien varieties, featuring blue-green skin and wearing a medical mask on the face.
The NFT was sold as part of the online auction “Natively Digital: A Curated NFT Sale” at Sotheby’s, which featured digital art pieces from 27 artists and fetched a total of $17.1 million in sales. Buyers of NFTs do not get any physical artwork – just the NFT sent to their cryptocurrency wallets.
Israeli businessman Shalom McKenzie is the largest shareholder at another predominantly digital business, US daily fantasy and sports betting company DraftKings, which is currently among the major players at the gaining speed across the US sports betting markets.
Shalom McKenzie became a shareholder and a member of the Board of Directors at DraftKings after the Boston-based company merged in April 2020 with its technology supplier, SBTech, to bring the technology in-house. SBTech was founded in 2007 by McKenzie, who by the time of the reverse three-way merger with Diamond Eagle Acquisition Corp. (DEAC), was also a major shareholder at the technology supplier and had his stake converted into DraftKings shares.
And the Israeli entrepreneur is not the only one willing to part ways with large sums of money to acquire these first attempts at digital arts, albeit still imperfect. According to Michael Bouhanna, contemporary art specialist at Sotheby’s, there is a strong demand for NFTs and the auction house is continuously looking into new ways to present these works.
NFT Auctions Gaining Popularity
While the auction took place virtually, the works which anyone can view but only the buyers have the official status of being their owners, were displayed on screens in the auction houses’ exhibitions in New York, London and Hong Kong.
NFT online auctions are the latest digital initiative of Sotheby’s after the auction house started selling the digital art in April, when artworks created by the artist known as “Pak” were sold for $16.8 million. Thursday’s auction also featured a geometric animation by Kevin McCoy, Quantum, which was sold for $1.47 million.
The famous auction house recently opened its first ever virtual gallery, replicating Sotheby’s on New Bond Street in London in a virtual world called Decentraland, where the blockchain-based virtual reality allows users to walk around with friends and go to different events, besides displaying their NFT artworks.