Every Wednesday morning, Artnet News brings you The Gray Market. The column decodes important stories from the previous week—and offers unparalleled insight into the inner workings of the art industry in the process.

This week, from NFT controversy to metaverse conjecture…

GORILLA TACTICS

Last Friday, Katie Notopolous of Buzzfeed News revealed the identities of two of the four founders of Yuga Labs, the entity behind the surreally popular, galactically expensive Bored Ape Yacht Club NFT project. The consequent backlash to Notopolous’s investigation has foregrounded a savage debate over pseudonymity, accountability, and ethics in a blockchain-powered future for more than just artworks. 

For the uninitiated, the Bored Ape Yacht Club (BAYC) series is made up of 10,000 crypto-certified images, each depicting a cartoon ape with a unique combination of attributes, as well as an undefined place in a backstory about a community of wealthy primates killing time in a swamp clubhouse. (You can find more context in this excellent explainer on the series.) BAYC is also the king of the jungle when it comes to both the dollar value and pop-cultural currency for a PFP (“profile pic”) NFT project.

Prices for Bored Apes started at around $300 apiece when they hit the market in April 2021. Today, you can’t get one for less than $250,000. The series as a whole commands a market cap of around $3.1 billion as of my writing, according to the crypto tracker DappRadar, and celebrity owners range from actor/entrepreneur Gwyneth Paltrow and heiress/crypto booster Paris Hilton, to super-producer Timbaland and (arguably) biggest-rapper-in-the-world Lil Baby. 

Earlier last week, the Financial Times reported that Andreessen Horowitz, the venture capital mothership piloted by art collector Marc Andreessen, was exploring a “multimillion-dollar stake” in Yuga Labs that would value the company at between $4 billion and $5 billion. If the deal actually materializes, it would make very rich humans out of the company’s four founders, all of whom were still cloaking their day-to-day identities behind pseudonyms (two self-described “literary nerds,” going by Gargamel and Gordon Goner, and two engineers known as Emperor Tomato Ketchup and No Sass) when the FT story ran.

Bored Ape Yacht Club NFTs owned by Yuga Labs founders Greg Solano and Wylie Aronow.

Alas, two of the pseudonyms didn’t hold up. Notopolous’s sleuthing revealed that Gargamel is 32-year-old Greg Solano, and Gordon Goner is 35-year-old Wylie Aronow—both Florida natives who transitioned from writing careers to crypto royalty. The unraveling started with Yuga Labs’s articles of incorporation, which showed the company being registered in Delaware last February “with an address associated with” Solano. Notopolous then found a trail of public documents connecting Solano to Aronow, whose personal backgrounds match details divulged in past interviews. 

Yuga Labs’s CEO confirmed Notopolous’s conclusions were correct. Solano and Aronow outed themselves on Twitter shortly thereafter, framing Notopolous’s report as having been “doxxed,” the parlance for having all of your personal details dumped onto the internet, usually by a bad actor. To say things got ugly from there is an understatement. 

BAYC defenders promptly turned Twitter into a toxic waste dump. Investor Mike Solana labeled defenses of Notopolous’s work “disgusting.” Bored Ape owner Adam Hollander went further, arguing that the story was so “dangerous” that Buzzfeed News should “pay for [Solano and Aronow] to obtain personal security.” Other BAYC fans got personal; crypto influencer Cobie branded Notopolous a “whore for clicks,” while another user threatened to dox not just Notopolous, but also her parents.

I’m not going to spend a lot of time explaining why I think Buzzfeed News and Notopolous were completely justified in publishing Solano and Aronow’s identities, because A) this isn’t an “ethics of journalism” column, and B) other people inside and outside the crypto sphere have already made eloquent, comprehensive arguments for me. But here’s the TL;DR version: once you wield outsize power, wealth, and influence, the public has a right to know select details about who you are, provided those details inflict no demonstrable harm. It’s all the more true when the clues used to unmask someone were hiding in plain sight all along.

Solano and Aronow check all these boxes. That’s enough to close the case and clear the way for larger issues with a direct impact on art, culture, and business going forward.

A very endearing Question Mark sculpture by Ben Langlands and Nikki Bell at the University of Suffolk. (Photo by: Geography Photos/Universal Images Group via Getty Images)

IDENTITY POLITICS

Crypto proponents have often claimed that the ability to operate anonymously (which usually means under a pseudonym and an avatar) is a core value proposition of Web3, the much-discussed, user-owned third phase of the internet that will supposedly run almost entirely on blockchains. But it’s reasonable to ask whether an alter-ego-driven internet of experience (aka metaverse) could do far more harm than good.

The argument for aliases goes something like this: historically, society has never had a mechanism for personal accountability that could function without pinning each person to their physical identity, then surveilling their lives to a greater or lesser degree forevermore. While this age-old system largely incentivizes people, corporations, and states to observe a shared set of laws and expectations, it also imposes unfair costs that can stretch from mild annoyances to mortal harms. 

In other words, it’s easy to spend your life flashing your passport and filing your tax returns if you’re a well-off, good-looking, able-bodied, straight white guy from a rich democratic country. It’s a different ballgame when even one of those variables changes, let alone more than one. Just consider people living under authoritarian regimes, hailing from historically marginalized ethnic and class backgrounds, or identifying as a gender different from the one on their birth certificate. 

Blockchain theoretically provides a blue-sky solution to this problem. Once a permanent, distributed, universally accessible online database can verify and record every transaction, pledge, completed task, and communication coming from a single digital presence, personal identities—the ones we live through away from our screens—no longer matter. Who we are can be recast as simply what we do. 

That means a crypto-verified alter ego can liberate individuals from attributes, norms, and prejudices that might damage them offline. The end result is the type of “win-win” situation that technocrats adore: better business that is also more socially just.

Proponents of this argument also contend that mass adoption of pseudonyms and avatars would make life more fun and creative, especially once the metaverse becomes a graphically rich immersive world instead of just a pitch deck mostly manifested in Discord chats and smart contracts. The Disneyland-style framing would be: In an environment where it’s possible to do anything we can imagine, why restrict ourselves to the most basic circumstances we’ve been born into? 

An experimental trial for this future is one of the rockets that sent BAYC to the moon. Bored Ape NFTs don’t just function as owners’ profile pics; they also grant privileged access to online and offline spaces, such as physical VIP parties (some on actual yachts) during events like last year’s NFT.NYC and Miami Art Week. The next natural step would be for BAYC owners to live and work inside the metaverse as full-bodied, three-dimensional versions of their profile pics, while the rest of us inhabit some other fantastical form, loaded with its own signifiers and property rights. 

More and more corporations, “thought leaders,” and crypto influencers are selling the notion that this future is inevitable. But the more I’ve looked into past precedents, the less convinced I am that it’s even logical, let alone desirable, for most people. Worse, I think a virtual world premised on mass use of pseudonyms and avatars is also likely to foster more exploitation and discrimination than it counteracts, including in the art world.  

A still from She Falls For Ages, a video created by the Mohawk artist Skawennati inside the online platform Second Life.

FIRST PRINCIPLES OF ‘SECOND LIFE’

Contrary to the party line of PFP owners and crypto entrepreneurs, pioneers of virtual world-building have evidence that, even among enthusiastic users, only a minority wants to live online exclusively via alter ego. So said Philip Rosedale, the creative force behind the turn-of-the-millennium proto-metaverse Second Life, and Bill Gurley, one of the primary investors in the project (which remains active, with a user base of around one million, entering its third decade of existence).

In a wide-ranging interview, Gurley said that one of the “big learnings” from Second Life was that only “a small fraction of adults” got enough psychological benefit out of pseudonymous avatars to commit to their use long term, which distinguishes them from younger demographics.

Rosedale expanded: “Kids want to play with their identity, try what it’s like to be 20 when they’re 12, and that drives the appeal of a lot of experiences for kids… When you’re grown up, the reasons why you would essentially give up your body and take on a new body in a virtual world are very different, and they’re certainly not common.” The uncommon reasons he listed were living under authoritarian rule, living with disabilities, and living in a rural area divorced from any offline creative ferment. 

Most other users preferred to be known on the platform by their actual names, and to represent themselves as avatars that shared their physical traits. In Rosedale’s experience, then, there is a “tremendous disconnect between what has worked so far as demonstrated in Second Life and other systems,” and the type of “really big opportunity” envisioned by metaverse boosters like Mark Zuckerberg and Yuga Labs. 

(If you’re thinking: “But wait, millions of people worldwide currently live under authoritarian rule,” ask yourself this: How many of them have reliable access to the mundane internet that already exists? For those who do, how restrictive does the state tend to be about the use of apps created abroad, like Facebook and Twitter? Given the sobering answers to those questions, why should we expect that the same demographics will be able to “live” in the metaverse, a vastly more technologically complex and all-encompassing version of the web being spearheaded by U.S. tech giants?) 

Gurley added an interesting nuance to Rosedale’s broader observation: members of these smaller, avatar-favoring demographics tended to make up a disproportionately high number of what he called Second Life’s most active “creators.” These were the relatively few people building the most imaginative elements of the shared virtual world, from boundary-pushing digital environments to usable in-platform goods, not the larger group of users content to interact with what was introduced by the creators. 

All of which makes sense. People dissatisfied with their offline lives would be the most likely to embrace an online existence, and the most creative among them would also be the most inclined (and have the strongest desire) to extend their creativity into their online personas. Yet it also suggests that the relative minority of folks who premise their lives on creating things, whether artworks or software, are poor models for projecting how everyone else on the planet wants to live. 

This trend also maps onto pre-metaverse cultural history. The most prominent offline figures (and perhaps the only ones) known to cloak their pursuits behind long-term aliases have been creatives of some kind. Look at pre-NFT-era artists like Banksy and LaTurbo Avedon, authors like Elena Ferrante and J.D. Salinger, and musicians like early-career Daft Punk and the Weeknd. 

The balance of motivations for each of these people was undoubtedly varied. Physical safety, mental health, marketing value, a particular relationship with their audience only possible when the author remains an idea, rather than an individual—all of these could be factors. But the point is that the benefit has to be significant, because maintaining an alias long-term is simply too hard to do otherwise. 

Yuga Labs LLC, 101 Bored Ape Yacht Club (est. 2021). Courtesy of Sotheby’s.

PLANET OF THE APES

Crypto only exacerbates these problems, as the unmasking of Solano and Aronow confirms. The duo’s inability to cover their tracks suggests that either they were fine with being found out eventually, or that maintaining an alter ego is a bigger challenge than even some blockchain advocates think. And if you believe a metaverse full of avatars and aliases has a strong chance of ending racism, sexism, classism, misogyny, and other ills, then I would urge you to look at how many of the users bombarding Notopolous with abuse and threats since last Friday have done so under PFPs and pseudonyms. 

In a multi-part series on blockchain, the sociologist Tressie McMillan Cottom wrote: “The idea that complex social problems like poverty and failing schools and climate change just need a little technology is seductive, if silly.” Similarly, the avatars-for-utopia camp is tasking technology with solving complex social problems about ingrained bias. When applied at scale, I think that reflects the same depressing (albeit understandable) logic as one of the chief arguments for directing trillions of dollars into colonizing Mars instead of other longstanding crises: things down here on planet earth are so fucked up that our only chance to fix them is to start over somewhere else. 

I’m against that program for two reasons beyond resisting simple nihilism. First, suppressing our away-from-the-keyboard identities reinforces the notion that our differences as humans should be homogenized or replaced by fictions, not recognized and valued. The disturbingly broad acceptance of that position throughout our current era of the internet has already plunged much of the offline world into chaos. Repeating the error in the metaverse would be madness. Doing it by subsuming ourselves into computer-rendered animals (or whatever else) with fake names would only apply a demented, Dadaist skin to the mayhem.

Second, the crypto-camouflaging of identities makes it more complicated to know who, exactly, you’re dealing with—and as a rule, that kind of complexity ultimately favors the wealthy and powerful in any system. With investors pouring more than $30 billion into crypto ventures in 2021, per accounting consortium KPMG, that principle is now a clear and present danger to Web3.  

Yes, pseudonyms may level the playing field for some blockchain-fluent early adopters who deserve it right now, including artists from historically marginalized groups. But the closer that crypto and the metaverse get to mainstream use, the more value the ruling class will see in normalizing the idea that everyone should be able to disappear completely into the blockchain, evading necessary oversight with the help of the wiliest engineers and developers money can buy. If you think that’s just the cost of evolution, think about how much harm has been done to the commonwealth via the old-fashioned cloaking provided by shell companies and political action committees.

Am I open to guidelines and norms that could provide cover for people who could genuinely use it for safety or fairness? Absolutely. But it can’t be as simple as enshrining anonymity as an inalienable right for billionaires, corporations, and bad actors too. Otherwise, the metaverse will simply offer another layer of protection to those who need it least, and can exploit it most. And there’s no way that ends well for the rest of us.

[Buzzfeed News]

That’s all for this week. ‘Til next time, remember: absent outside regulations, any space is liable to default to the law of the jungle.