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This Week in the Metaverse: A Sothebys auction brings in $11 million—and a bit of hope for the NFT market

Welcome to This Week in the Metaverse, where Fortune rounds up the most interesting news in the world of NFTs, culture, and the metaverse. Email with tips.

After a plummet in the NFT market, a Thursday auction at Sotheby’s was a rare bright spot, and we partly have to thank failed crypto hedge fund Three Arrows Capital. It was the second time Sotheby’s had hosted an auction of 3AC’s NFTs, according to CoinDesk, except this one wildly outperformed expectations.

The star of the show was Ringers #879, a generative art piece by Dmitri Cherniak also known as The Goose. Expected to fetch as much as $3 million, the NFT was bid up to $6.2 million, becoming the second-most-expensive piece of generative art ever sold by the auction house. Another six works by generative artist Tyler Hobbs brought in $2.1 million, including Fidenza #479, which tripled the highest estimate when it sold for $622,300, according to Sotheby’s.

The auction fueled a dash of exuberance on Crypto Twitter, with some calling it a fresh bull run, a resurgence, or more. The Goose even got a shoutout from famed NFT artist Beeple.

Despite the excitement, the reality of the NFT market is much bleaker. In May, the overall market fell short of $1 billion in trading volume for the first time since December—at just $675 million, it was a decrease of 44% from the previous month, according to a report by DappRadar.

Still, the significance of the auction can’t be denied, especially for the generative art space. After The Goose, the NFT that fetched the second-most money was from another generative art collection: Chromie Squiggles. This was followed by Hobbs’ Fidenzas and an Autoglyph—two other generative art collections.

These six- and seven-figure price tags for generative art show that this category of NFTs may have some staying power. In an email to Fortune, Hobbs said that he hopes the big ticket sales will help spread awareness and understanding about generative art, which he called, "particularly relevant to our time."

"It is inspiring to see that not only are the artists passionate about this work, but collectors have a deep and growing appreciation for it as well," Hobbs wrote.

According to the buyer of The Goose, @punk6529, an anonymous collector at NFT fund 6529 Capital, generative art is unique and valuable because it was created randomly by code.

“Long-form on-chain generative art is an act of faith by the artist and the minter. Unlike almost any other art form, neither the artist nor the initial collector know what the piece will be at the moment it is collected,” they wrote in a Twitter thread on Friday.

While the price floor of some of the top PFP NFTs has fallen, generative art has shown it can bring in the big bucks. Better yet, it’s apparently not limited to NFT fanboys. According to a partner at 6529 Capital, @ACthecollector, several bidders for the top offerings were from wealthy collectors from the traditional art world.

"From my understanding, in all cases of big marks at Sothebys, the winner or the underbidder have been wealthy traditional collectors," @ACthecollector tweeted.

Suffice to say that despite the downturn, NFTs aren't down for the count.

In other news

Binance launched a metaverse experience in partnership with Canadian artist The Weeknd, aka Abel Makkonen Tesfaye, on Friday, Blockworks reported. In the metaverse, which is meant to promote the artist’s After Hours Til Dawn tour, fans can design their own avatar and explore. They also can solve a puzzle to win Binance and The Weeknd collaborative merch.

Canadian singer-songwriter, record producer and actor The Weeknd, aka Abel Makkonen Tesfaye at Cannes Film Festival 2023. The Idol Photocall. Cannes (France), May 23rd, 2023 (Photo by Rocco Spaziani/Archivio Spaziani/Mondadori Portfolio via Getty Images)
Canadian singer-songwriter, record producer and actor The Weeknd, aka Abel Makkonen Tesfaye at Cannes Film Festival 2023. The Idol Photocall. Cannes (France), May 23rd, 2023 (Photo by Rocco Spaziani/Archivio Spaziani/Mondadori Portfolio via Getty Images)

Rapper and NFT collector Snoop Dogg released a new collection of NFTs in collaboration with Transient Labs that will evolve as he progresses on his summer tour, which begins July 7. The Snoop Dogg Passport will give fans a peek into the artist’s life on tour with behind-the-scenes video and images. It will also let them access future Snoop Dogg drops, events and experiences, exclusive artwork, and merchandise.

Snoop Dogg Passport Series, Image Courtesy of Transient Labs
Snoop Dogg Passport Series, Image Courtesy of Transient Labs

NFT artist FEWOCiOUS teamed up with Adidas to launch NFTs linked to real-life shoes. On June 22, the pair will drop 4,500 limited edition Trefoil Flower Mint Passes that buyers can redeem for physical Adidas Originals Campus 00’s, designed by FEWOCiOUS, later in the summer. Once redeemed, the mint pass will then transform into a digital twin of the sneakers that can be worn on avatars in the artist’s upcoming FewoWorld and ALTS by Adidas.

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