Most people had not heard about non-fungible tokens (NFTs) before 2021. For a long time, NFTs were popular only among proponents of blockchain technology and cryptocurrencies. However, a sudden interest in NFTs as an asset class from regular investors and celebrities caused a boom in the NFT market, leading us to discuss the most expensive NFT in the world.
2021 saw established art auction houses like Christie’s and Sotheby’s put up digital artwork in the form of NFTs for auction. Such moves further legitimized NFTs as an asset class and saw prices of various digital artworks spike. For example, Christie’s auctioned a piece called The First 5000 Days for $69.3 million on February 21, 2021.
However, that sale price pales compared to the most expensive NFT in the world ever sold. Merge sold for $91.8 million on December 6, 2021. Below is more information about this record-breaking NFT.
Quick Facts About the Most Expensive NFT in the World
|Auction Date||December 6, 2021|
|Period of Availability||48 Hours|
|Auction Platform||Nifty Gateway|
|Selling Price||$91.8 Million|
|Initial Mass Units Sold||312,686 Mass Units|
|Starting Price||$575 Per Mass Unit|
|Price Increase Rate||$25 Every Six Hours|
|Final Price||$750 Per Mass Unit|
|Initial Mass Unit Buyers||28,983 Buyers|
Unique Features About the Merge NFT
Merge is an NFT collection created by digital artist Pak. It is unique to other digital artworks because it consists of interactive NFTs. This may explain why it is the most expensive NFT in the world. The images within the collection are a bunch of white or yellow circles on a black background.
When Pak put up Merge for auction, it consisted of 312,686 NFTs, otherwise known as units of mass. Each buyer could purchase as many units of mass as they wanted; however, the buyer can only hold one NFT.
Pak built Merge on a platform, allowing each crypto wallet to own only one NFT. That means that if you already own a unit of mass, your wallet will not reflect ownership of two units of mass when you buy another one. Instead, the second unit of mass will merge with the first to form a new, larger unit of mass.
The platform works using a system similar to the burning mechanism in crypto. It permanently removes coins from circulation, thus lowering their availability. In the case of the Merge, the platform will identify whether a buyer’s wallet has an NFT. Suppose a wallet has an NFT, the smaller NFT will join with the larger one.
Despite the increase in the mass of individual units when joined together, the total mass of the collection remains the same. Additionally, the total number of units of mass available for purchase diminishes with every unit transfer to a wallet containing a mass. Consequently, it is possible for one wallet to hold all the units, making Merge a single unit of mass, or NFT.
History of the Merge’s Creation
The purpose of the Merge NFT project was to prove to a wider audience that NFTs were more than just a bunch of images. Pak intended to create a piece of art that would be interactive, immersive, and unconventional. Ultimately, they wanted to gain the attention of traditional art buyers and solidify NFTs’ status as a worthwhile investment option.
As in their previous works, Pak wanted Merge to have a scarcity mechanism focused on time rather than volume. That prompted the creation of unlimited NFTs available only for a small auctioneering window.
In addition, Pak created a leaderboard indicating the largest mass owners. Each unit of mass had a designated mass number that indicated the number of merged NFTs that created it. Moreover, Pak employed a color coding system to identify unique units of mass.
For instance, the top 100 masses would be yellow-colored, the top 5 masses would be red, and the largest mass would be black. There was also a special class of 50 randomly selected masses that were colored blue.
Following the auction, Nifty Gateway was responsible for minting the purchased mass units two days after the auction’s close.
About the Merge’s Creator
Merge’s creator is a digital artist named Murat Pak, or simply Pak. It is the alias of an anonymous artist, though some think the name represents a group of digital artists. Pak prefers being addressed by the pronouns they/them, though people who have interacted with them via messaging apps and social media have referred to them by the pronoun him.
Pak’s social media avatar is a circle or a zero, and they also go by the nickname “The Nothing.” Due to their preference for remaining anonymous, not much is known about the artist(s). For instance, no one definitively knows where they are from. Some websites have linked them to Istanbul, others have stated the creator hails from Pakistan, and others have linked their IP addresses to Amsterdam.
In an interview with The Wall Street Journal, Pak stated their primary reason for maintaining their anonymity was to separate the artist from their artwork. They argued that whenever art lovers can relate a piece of art to a certain artist’s appearance or form, they tend to shift their focus away from the art and towards the artist. Therefore, Pak’s anonymity prevents their persona from obscuring their art, granting the art greater visibility.
In addition, Pak chooses to be anonymous to endear themselves to their core fans, who also enjoy interacting with their peers using avatars. Lastly, being an anonymous artist generates significant publicity, which, as you have seen, helps sell more artworks.
Previous Creations by Pak: Archillect
Before Pak began auctioning their NFTs, they were relatively unknown in the art world. Only people conversant with the cryptocurrency and blockchain scene were aware of their works. Their most notable creation aside from the NFTs is Archillect, which is a blend of the words Archive and Intellect.
Pak created and launched Archillect, an artificial intelligence (AI) bot, in 2014. The bot acts as a curator that searches social media feeds for the most popular content. Once it finds popular images, it posts them on its social media accounts every 10 minutes to ensure more people will see them.
Other Popular NFTs Sold by Pak
Pak started releasing NFTs in February 2020 when they put Cloud Monument Dark up for sale on the NFT marketplace, SuperRare, with the piece eventually selling for 3.5 Ether. Pak released numerous other pieces of art on SuperRare in 2020 and 2021, including Build Routine, Trade Routine, Ripple Routine, and Regeneration Routine.
Most of Pak’s artwork is abstract, consisting of geometric shapes. In addition, the artworks often have a scarcity mechanism that helps boost their uniqueness. After building a reputation within the NFT community, Pak partnered with Sotheby’s auction house in March 2021 to bring digital art to the mainstream market.
Build-up to Merge’s Auction
The result was Sotheby’s first NFT art auction, held between the 12th and 14th of April 2021. Pak presented a collection called The Fungible with over 6,000 NFTs for sale. Sotheby’s worked with Nifty Gateway to run the sale. They split the proceedings into an open edition sale, an auction, and reserved pieces.
Altogether, the sale made $16.8 million, including $1.4 million and $1.35 million from the auction of two pieces: The Switch and The Pixel. The auction’s popularity earned digital art a seat at the fine arts table and paved the way for the record-breaking auction of Merge in December 2021.
Merge’s Auctioning Process
Pak put up Merge for auction on December 2, 2021, on the online art auction platform Nifty Gateway. The platform specializes in the sale of digital artwork. The open edition auction would last for 48 hours.
There were 312,686 tokens, or units of mass, available for purchase. The acquisition price for a single unit of mass at the auction’s opening was $575. However, after every 6 hours, the auction price would increase by $25. By the end of the 48-hour auctioneering period, the auction price had risen to $750.
In total, 28,983 unique crypto wallets bought at least one token and contributed to the overall sale price of $91.8 million. The final auction figure would set a new record for the most expensive NFT in the world.
Merge also set the record for the highest amount paid at a public auction for an art piece by a living artist. The previous record holder was a 1986 Jeff Koons sculpture called Rabbit that sold for $91.1 million in 2019.
However, not everyone in the art world agrees that Merge broke the record. Those opposed to the idea state that it’s a collection of artworks; thus, it cannot claim the record dedicated to selling a single piece of art. Ultimately, Merge can become a single piece of art if a single crypto wallet buys all the available units of mass.
Pak’s Political Activism After Merge’s Auction
Pak partnered with WikiLeaks founder Julian Assange to release a series of NFTs called Censored for three days in February 2022. The auction aimed to raise money for Julian Assange’s legal defense.
The highlight of the collection was an NFT called The Clock, which sold to a group called AssangeDAO for $52.8 million. AssangeDAO is a decentralized autonomous organization (DAO) or an online community of over 10,000 individuals that pulled together their cryptocurrencies to buy the NFT.
Other supporters of the cause raised $2.1 million for pro-freedom organizations identified by Pak and Julian Assange.
NFTs have been around for quite some time; however, few people paid attention to them until they increased in value significantly. The acceptance of NFTs into traditional auction houses like Christie’s and Sotheby’s indicates that traditional investors consider them a legitimate asset class.
The anonymous digital artist Pak has brought significant publicity to the NFT art world. Their works have generated tens of millions of dollars at auctions; a feat even traditional artists, especially living ones, struggle to achieve. Ultimately, NFTs have gone mainstream. However, it is hard to imagine the future of blockchain-based art and asset classes.