Yet Another NFT Plagiarism Scandal
It’s difficult to find anything resembling good news when looking at NFTs over the past year.
From the halcyon days of 2021, the NFT marketplace has been in sharp decline. In the third quarter of 2022, NFT sales plunged by 60% from the previous quarter and, by the beginning of 2023, it was down over 80% from the previous year.
Though there have been some meager signs of recovery, it’s pretty clear that the boom is over and the news headlines that once spoke breathlessly of NFTs and cryptocurrency are now focused on large language models and generative AI as a whole.
But that doesn’t mean that NFTs went away. Though the market is significantly smaller, it remains active and there are many high-profile celebrities in the space launching and selling NFT collections.
However, the market being active isn’t the only way that it hasn’t changed. Much like the market of 2021 and early 2022, it’s also a market wrestling with plagiarism and both ethical and legal issues that come with it.
Despite a meteoric rise and equally meteoric fall, the NFT market is still wrestling with some of its old issues. This indicates that, while the NFT market may have come back down to earth, it hasn’t learned much from its wild trip.
Nothing illustrates this better than the story of Elena and a now-postponed NFT collection.
A Familiar Refrain
According to CoinGecko, the Azuki NFT Collection is the sixth-largest by market cap. It has a size that puts it in the same league as groups such as CryptoPunks and the Bored Ape Yacht Club, names that are likely familiar to those outside of the NFT community.
Pseudonymous artist Elena, according to her Twitter profile, is (or at least was) the “researcher in residence” for Azuki. Though that designation has since been removed from her profile, she amassed a large following, including nearly 90,000 followers, which had grown rapidly over the past few months.
She had previously announced the launch of a new collection entitled Atomic Ordinals, which would be based on the Ethereum blockchain. It would contain 200 pieces of art, each sold for roughly $1,500, giving it a valuation of $300,000.
However, before the sale could begin, a Twitter user with the nickname Kemosabe posted a thread highlighting alleged copying by Elena when creating the collection.
According to Kemosabe, Elena reused pixel art assets from various sources, either using them directly or with minor modifications.
The thread also cited another Twitter user named @Mulan_Art, who created a collection entitled Atomic Ordinals for the Bitcoin blockchain, and accused Elena of copying some of her work.
Mulan, for her part, said that she wasn’t bothered by copying, though did raise concerns about both the quality of the artwork and the price it was being offered for.
Instead, Mulan said that she felt, “imitation is a form of flattery” and that she was happy Elena used her work as “inspiration.”
However, others were not so forgiving.
Elena defended herself, saying that she created the works, but the close similarities indicate that the works were close retraces. Ultimately, she opted to postpone the release, citing “an incredible amount of hate, including numerous death threats in dms.”
But, while death threats are never acceptable, the outrage is understandable. Many in the NFT community felt as if they were duped. Azuki and, through proxy, Elena, were names that were highly trusted. at least until this week.
Azuki is considered a “blue chip NFT collection”. To see copied/traced art presented as original works feels like a scam, and that hits hard in a community that never shook off its reputation for being a haven for grifters.
Lessons Unlearned
During the heyday of 2021 and early 2022, the NFT marketplace became well known for two things: Eye-wateringly large sale prices for some NFTs and being a haven for intellectual property infringement and plagiarism.
This included a planned NFT series of poker players that used photographs without permission, the closure of one of the largest NFT markets due to widespread plagiarism issues and an artist losing a trademark fight against the fashion brand Hermès.
However, none were more damaging to the reputation of NFTs than Hitpiece. Dubbed “The Fyre Festival of NFT Startups” it attempted to enable users to buy NFTs of their favorite songs, but did so without the needed permission from artists and songwriters.
Though the startup’s public run only lasted a few weeks, its public rise and disgraced fall was one of the headlines that marked the beginning of the end of the NFT glory days.
Since then, NFTs and cryptocurrency more broadly have left the public consciousness. Their headline space largely occupied by stories about generative AI.
However, this could have been a good thing for NFTs long term. With the fad behind them, the community had an opportunity to focus on finding long-term success. By building something of value, creating art that was independently desirable and constructing a marketplace that could be trusted, the downfall of NFTs could have been the start of a long road back to relevancy.
But that path necessitated the industry to not fall back into its old traps. NFTs were rightly mocked for their widespread infringement and plagiarism. The community’s understanding of copyright was a laughingstock, including when one group spent roughly $3 million to learn that acquiring a copy of a book does not result in one owning the rights in it.
The story of Elena feels very late-2021, and not in a way that is positive for NFTs or the cryptocurrency community. This story conjures up the worst of the abuses the NFT craze brought with it, without any of the positive headlines that made it intriguing.
Bottom Line
To be clear, NFTs were always going to face serious issues gaining trust. Being connected with cryptocurrency is a difficult place to be following the very public collapse of FTX and news that the Securities and Exchange Commission is suing Binance and Coinbase alleging deception.
To make matters worse, NFTs were always a solution in search of a problem. They were never going to “fix” copyright and their attempts to create artificial scarcity were undermined by the widespread plagiarism and infringement.
But that’s not to say that the technology is inherently evil or useless. It’s simply that it was never going to find its niche when it was primarily known for insane purchase prices and widespread infringement.
Though NFTs may no longer be the trendy new tech project, they still haven’t managed to shake their reputation for plagiarism and infringement. This case isn’t going to help that, especially with the connection to such a respected collection.
The path forward for NFTs is difficult enough without widespread allegations of plagiarism. With those issues, there likely isn’t a path at all.
NFTs are already a difficult thing to sell, but they get that much worse when they knock offs and infringements rather than originals.
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