From the Artist’s Contract to the Blockchain Ledger: New Forms of Artists’ Funding Using NFTs, Fractional Equity, and Resale Royalties

Abstract

Although the Artist’s Contract, first developed in 1971, was not broadly adopted in its early decades, renewed interest in it fifty years later has led to inventive related structures that are enabled by blockchain technology, in particular the phenomenon of NFT (non-fungible token) sales in art. We argue that the Contract’s conceptual roots have laid groundwork for a potentially powerful funding mechanism via the Contract’s resale royalties terms. Blockchain technology radically alters risks of incomplete contracting and lowers transaction costs, making the Quixotic terms of the Artist’s Contract newly actionable. We study the artist Hans Haacke’s longtime experimentation with the Artist’s Contract, along with contemporary data from the blockchain registry SuperRare, which pays royalties to artists. Blockchain companies such as SuperRare generally sell digital works outside the taste-making and gate-keeping systems of the upper echelons of the traditional art market. This arc from conceptual practice within the arts to commercial practice at the edge of the traditional art market points to the Contract’s legacy as a model for potentially disruptive technology and a new fundraising model for artists.

Keywords: Artist’s Contract, blockchain, Hans Haacke, SuperRare, art markets, NFTs, non-fungible tokens

JEL Classification: Z11, Z13, K12, O34, P14