How could ‘Everydays’ be unleashed in real world venues?

(Article written in 2021)

Everydays: the First 5000 Days is a digital artwork series, produced by Mike Winkelmann (AKA Beeple) and was sold for $69.3 million in a Christie's auction earlier this year, becoming the third-most expensive work by a living artist. It was purchased by Vignesh Sundaresan (AKA MetaKovan) using 42,329 Ether, the native cryptocurrency of the Ethereum blockchain.

Ownership of the artwork is recorded on the Ethereum blockchain as a unique digital token (also known as a NFT), it's the highest price ever paid for a NFT. The NFT represents the digital artwork created every single day for thirteen and a half years by Winkelmann.

I’ve been thinking about some things MetaKovan could do to put his purchase to good use. It seems like he wants to open up new opportunities for people to enjoy the artwork but so far I’ve only heard about a virtual gallery being built to display it, this is great news for the “metaverse” but what about the opportunities for people to enjoy it in the physical world?

Here’s my thought experiment. Let’s imagine that MetaKovan has some philanthropic goals and wants to develop a new charitable revenue stream, by displaying Everydays: the First 5000 Days at venues all around the world.

He could issue and sell - or auction off - a limited number of NFTs that have the rights to create and operate the physical art installation events.

This sounds like a good place to start. But let's not forget that this is a piece of art like no other so it's going to present us with some interesting problems to solve. Firstly, how do you display 5000 individual pieces?

The initial thing that comes to mind is a slideshow that runs continuously. If each individual piece from the Everydays collection was displayed for 5 seconds it would take just under 7 hours to complete a full loop (and that's before we consider intervals for comfort and refreshment breaks). We just can’t know how long anyone will want to remain at their seat consuming the art, there are many external and individual factors at play, and we all experience art differently. Simply dividing access into fixed time slots does not seem like an adequate solution for this one-of-a-kind experience.

Accessibility should be a prime objective here. Providing as many people as possible from all walks of life with the opportunity to experience this artwork within the period of time that the slideshow exhibition runs for - perhaps 50 days. We can’t meet this objective with fixed time slots as they would only generate a fixed number of opportunities to occupy a seat.

In general, market forces can bring a more fluid and efficient market. Knowing this we can increase the overall number of opportunities people have to occupy a seat and start to imagine a marketplace that facilitates ‘seat turnover’. With the freedom to access the marketplace for seats, and to come and go as we please, the artwork will feel more approachable and enjoyable.

This brings us to the second pressing issue: how do we efficiently turnover the seats?

On one hand we want to appease those who just want to taste the experience, acknowledging people's desire to say “I was there…”, and on the other hand we want people to have the opportunity to enjoy the full loop if they so wish and have the time available. How do we strike a balance? We want the artwork to be accessible, we want to facilitate a compelling experience, and we also want to maximise the good that it does for charitable causes by optimising the revenue stream.

The kind of art installation that I’ve started to describe above reminds me of Dismaland which was faced with similar challenges in the summer of 2015. Dismaland was a temporary art project organised by Banksy in Weston-super-Mare, a seaside resort in the South West of the United Kingdom. The Dismaland art exhibition was open for 5 weeks with 4000 tickets available each day, split between two sessions each day. Tickets priced at just ￡3 were released in batches and the first 10 days were sold out in under an hour. Demand massively exceeded supply and I was one of the lucky ones who bagged some tickets so I can vouch for what a truly unique experience it was.

Nobody really knows how much Banksy could have charged for tickets. Profits, of course, were not high on Banksy’s list of motivations; he is far too anti-establishment for that. He had a sentimental attachment to Weston-Super-Mare, and the Dismaland attraction brought tourists and wider economic benefits to the region. And, while Banksy would have never wanted access to be limited to the wealthy, I wonder if a better model might have raised more funds for the common good?

This begs another question: is it even possible to strike a balance between accessibility and economic gains?

I believe it is possible. The cryptoeconomics that sustain the existence of blockchains is living proof that we can find equilibriums that address these tough questions.

Cryptoeconomics is a fascinating field that combines many different disciplines, including game theory, economics and market design - it deserves more than a paragraph here! In the Ethereum ecosystem these disciplines are being applied, beyond the core blockchain itself, by product developers who are designing applications that run autonomously on the network. These applications are typically marketplaces with incentives and mechanisms for increasing coordination, reducing costs and providing (theoretic) guarantees.

Now that the cryptoeconomics genie has been let out of the bottle, we need to find a market mechanism that promotes the kind of fluid trading behaviour which ‘turns over seats’ in an efficient manner - whilst respecting our somewhat conflicting objectives.

My suggestion here is Harberger Taxes, an idea that compromises between allocative efficiency and investment efficiency. It was first proposed by Arnold Harberger and recently resurfaced in the book Radical Markets, which drew particular interest from the Ethereum community.

Over at Wildcards we can witness Harberger Taxes in the wild - excuse the pun! The Wildcards team have developed digital trading cards (NFTs) that are always for sale, and this novelty encourages a highly liquid marketplace to form around the trading cards.

If this concept was applied to the Everydays exhibition it could facilitate frequent trading between those people outside of the venue seats wishing to purchase seats and the limited number of people currently in possession of seats. Again, the goal is to strike a happy equilibrium between seat allocation and seat revenue.

The Harberger Taxes will work as follows in this case:

When in possession of the seat, you must self-assess its value and pay a tax on it. Anyone can buy the seat from you at any time for the price you set. As a result, the incentive is to price the seat at the value you are willing to pay to retain it. When the next person takes possession of the seat they set a new price and so the market cycle continues.

Proponents of the Harberger Tax argue that it forces those in possession of the asset to perform a balancing act. This self-assessment facilitates price discovery, reduces the friction of negotiation, and thereby increases market efficiency. According to proponents, this is particularly effective when the asset value is highly subjective.

As with Wildcards this can all be executed through the trading of NFTs. The Harberger Taxes market mechanism can be managed and enforced through a smart contract that runs autonomously on Ethereum. Since each seat in the venue will be represented by a single NFT ticket, the number of tickets on the market will always be equal to the number of seats in the venue.

You might have noticed that the digital art experience I’ve been describing has converged with a new kind of economic game. I’m imagining this to have a similar vibe to a casino where people freely socialise and play the game. The venues will need a large intermediary space for this participation, and of course people can only proceed to the seated screening once they have successfully purchased a seat.

When someone is displaced from their seat they can return to the intermediary space and compete for another seat. Seat holders will exit with the price they set for their seat (minus a transaction fee). And just like a casino, some people will profit (due to the fluctuations in demand and prices) and that’s part of the fun of this experience / economic game.

People will continually self-assess the value of their seat based on how much they value it, both in terms of their financial commitment and the time they wish to devote to it. No doubt people’s willingness to hold on to their seat will taper off over time so we can expect seat prices to follow the same track.

Ultimately the rules of the economic game are programmable, and we may choose to embrace some interesting dimensions. For example as the doors open for the day the initial access to the seats could be earned through a good old fashioned queue, allowing those who have queued the longest to capture the initial value in the day's proceedings. Likewise at the end of the day the very last seat occupiers might have to sacrifice possession of the seat and its value, so that the proceedings are reset for the next day.

In practice, the seat ‘turnovers’ will have to be executed in a continuous batch auction which collates the current seat prices and the most recent bids. This could happen every 15 minutes, so once your seat is sold you have 15 minutes to vacate it.

I hope you enjoyed this exploration and it inspires further conversations about how this monumental digital artwork could benefit society. Covax? Environmental crisis?

There is still a lot to be figured out here and I look forward to hearing from anyone who has ideas they’d like to contribute to this discussion. Whilst the emphasis of this article is on MetaKovan and Everydays, it shouldn’t be too difficult to imagine some of the ideas presented here serving as a useful building block for other champions in the digital art space.