Last week, we sat down with Exchange Art Founder Adam Karren to discuss how they grew to become the number one fine art marketplace on Solana, how they’ve survived the bear market, what new features they have in the pipeline, and how he thinks about enabling NFT creators to add unlockable content to their NFTs. Watch the full video here or catch the highlights below!
Darkblock: Where’d you come from? How did you come up with Exchange Art?
I actually came from PricewaterhouseCoopers. I was a director in the technology consulting practice. To put that in perspective, it’s a level below partner. I saw an opportunity with web3, and I didn’t wanna miss it.
I saw a clear market gap within the Solana blockchain for fine art. So as a marketplace, we went in that direction. If we think about the previous 12 months from when we launched, it was about $200,000 in sales. Now…it’s considerably more. We’ve had over $11 million paid out to creators and collectors in the past 10 months.
Exchange Art just closed a $3.2M seed round. What are you planning to do with the money?
When we first started Exchange Art, we actually bootstrapped it. Then we did the raise but that happened at the heart of the bear market. If you’ve ever fundraised, it is not the most ideal market conditions. Despite this, we were able to raise at a very fair valuation. In terms of what we’re doing with the capital, it’s really about continuing to build tools for Exchange Art. Exchange Art is the leading fine art marketplace on Solana. Our bread and butter is not focusing on, what is called in the industry, a Degen trader (someone that doesn’t care about art, they want a collectable they can trade). We care about creators. Our focus is to continue to provide amazing tooling so that creators can go to market in many different ways. That is very different from, let’s say, an OpenSea or Magic Eden. They’re very focused on building tools so that traders can trade a high velocity of speculative collectibles. We just aren’t in that business. They are so different in terms of what they stand for and the behaviors of the users that collect them.
How do you get a creator like John Le Studio into your ecosystem?
John is not just a normal talent, he is an extraordinary talent. He is like the Moebius of our time. I’m putting him up there with some of the greatest illustrators that ever walked. It’s not just his ability to create, it’s his ability to brand, communicate, and articulate the meaning in his work. That’s really his X factor. I think he’s going to have as big of an impact on Solana as XCOPY had with Ethereum. In fact, he’s doing things that XCOPY never did. For example, he went to Capitol Hill to talk on behalf of Solana on the benefits of the blockchain for artists. Very smart guy, very talented. We are thrilled that he continues to sell exclusively on Exchange Art.
How do you make yourself a 1/1 artist-friendly location?
For us, it’s really about talking to the users. Community is everything. From day one, I wanted to provide a platform for creators to unlock their potential. It’s not just on our core platform, it’s also our marketing channels. That’s one of the things that has really differentiated us. Also, I always wanted to be accessible to help artists. This is a tough world. This is a new world. It’s a completely different paradigm shift on how artists sell. I want to make sure each one of them unlocks their potential. Our incentives are directly aligned to the artist making more money.
It’s in our best interest to provide coaching sessions, workshops, all kinds of capabilities that teach them how to market, how to communicate their work, and new techniques that can unlock future creative works. Helping grow collectives, helping grow collector investment DAOs, and helping grow this core ecosystem beyond just the platform is what has enabled Exchange Art, and for that matter, Solana, to continue to grow. It’s doing things differently, right? Like there are material differences between Ethereum and Solana that I think are really cool. There’s a lot more of these collectives that exist within Solana.
So you’ve got the fine art market nailed down. What about other media types?
One of the things that I wanna do is open up capabilities that can unlock future markets. Like, how do you provide utility for music? Maybe you put music within a profile. All of a sudden this music NFT that I have has scarcity and value within a platform. One of the things I keep thinking about is, what can I do that allows us to have this core business very focused, but also enable an ecosystem. There probably is going to be a dominant music marketplace and that’s probably not gonna be us. But how can we partner to help their growth? Ultimately, my goal is to get as many humans onto Solana as possible. I recognize that there’s gonna be different businesses that exist within Solana. The idea of only having one marketplace, that’s not gonna enable the growth of the ecosystem right now. You need specific tooling for specific use cases. So I think you need to allow certain markets to develop independently from an aggregator.
You’ve added a new chat feature to your website…what was your thought behind this?
The idea is to be open and inclusive. With fine art, the reality is that it’s a devil and a good. It gets expensive. And there are a lot of artists that have friends that want to show support but cannot afford to put in a bid. We wanted to create a situation, an environment, an event around an auction where friends can support friends. They can root them on and create excitement. It’s also a great way for collectors to kind of talk a little smack which is fun. It’s less about being social and more about making things fun.
What are you excited about in the pipeline that you can talk about?
We’re moving from a Web2 login for creators. They [currently] use their email to log in, but now they can connect their wallet and manage their profiles from multiple wallets. So that’s really exciting. It’s kind of simple, but it’s something that I think is an important step to moving to Web3.
The other thing that I’m excited about is for creators to be able to ‘follow’ and the integration of a deeper notification system. One of the things people don’t realize about how crazy our product market fit is, is that people are being retained without a retention mechanism. Right now, people are coming back organically. They’re not coming back because we’re pulling them back. So it tells you the real potential of what the next month looks like when you actually have a retention mechanism in your funnel that can pull people back. So the ability to have email notifications and that whole notification flow is a big theme over the next quarter.
The other thing that we’re looking at is the potential of unlockables. That’s something over the next quarter that we’re definitely exploring with y’all. Again, our goal is to continue to provide tools specifically for artists and give them new creative capabilities. Cause like what do unlockables provide? That’s a new way creators can market, right? Every single new contract that we deploy, whether it was buy now, offers, auctions, the additions, all of these are new ways that artists can market. Unlockables is another way that artists are gonna be able to market. That’s really our focus, how do we keep building cool tools for artists.
The lessons learned in Web2, building an audience, keeping people notified. This mechanism that’s been built. How do we bring that over to Web3 without violating that?
It’s not really about Web2 versus Web3. It’s a question of whether you want to be a platform or an aggregator. That is actually the fundamental question. With a platform, the whole makes more than the platform. Whereas if you look at Facebook, their perspective is, ‘I wanna make the most money.’ The creators do not make money relative to how much money Facebook makes on advertisements. It is a completely disproportionate relationship. If you look at their most recent model, I think it’s like 47.5% that they want to take in the metaverse. That is a question of values and principles. Do you wanna be a platform or an aggregator? Microsoft—great example—chose to be a platform. They could have extracted an immense amount of value from the software industry. They chose to let an ecosystem grow. Right? You see companies like Apple today. They’re choosing to act more like an aggregator than a platform. They continue to restrict innovation in Web3 en mass. So that’s more the question I ask. Do I want to be a platform and allow people to make tons of money and grow the whole pie? Or do I want to eat the world? It’s a tough thing as a company because you’re always trying to grow, but that is the fundamental question you always have to ask yourself…what do you wanna be?
What projects are you guys working on? Are you playing in this big PFP community?
There are amazing opportunities to invest in talented artists and the amazing art that they create. We wanna make sure that they [the artists] get education around those opportunities. So we partnered with DeGods. We’re also partnering with Degen Apes. There’s a lot of really amazing PFP communities. We got some exciting stuff with the MonkeDAO that’s coming. For us, anything that is generative is not on Exchange Art. We draw a really clear line that we wanna be known for something. I think that brand awareness, growing, and educating communities on why we are special and different, has been really critical to our growth. People know what to expect when they come to Exchange Art. They do not want to see things like generative projects. There are plenty of sites that can do that. That’s what makes us really special is that clear brand identity.
Big thanks to Adam for putting on one more hat this week and answering all of our questions. Hopefully there will be more Darkblock x Exchange Art content on the horizon. 👀
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