Race and NFTs
As the LarvaLabs Meebits project swelled to $75 million in sales yesterday many buyers who had minted a Meebit they disliked dumped them on to OpenSea bargain prices. There was one thing in common with the vast majority of those Meebits: they were all dark skinned and often female.
Many of those Meebits are still for sale at more than 30% off their original purchase price.
I’ve long debated whether writing this article would be of any value. As a white male I get to benefit from a system stacked in my favor. However when something is so apparent it seems inconsiderate not to state the gigantic elephant in the room.
CryptoPunks, Avatars, And Race
For context, we need to look back at Cryptopunks. I have covered the project ad nauseum on this site primarily through interviews with Cryptopunk owners. However for those who are unfamiliar (because you are not a subscriber to this site which is unacceptable), Cryptopunks was the first project out of LarvaLabs.
They are now acknowledged as the first NFT, originally built using ERC-20 tokens (in contrast to the current NFT standard ERC-721). The founding of the project is less relevant to this article however. Instead, what’s most important is how the Cryptopunks are being used by their owners: as avatars and online identities.
When it comes to selecting an avatar, we tend to default to something that either looks like us (in my case a white male avatar) or makes a statement (an Ape, Alien, or Zombie Cryptopunk which is incredibly rare and also coincidentally worth millions now).
While there are many minority owners of Cryptopunks, the price distribution was historically skewed against dark skinned avatars (this is based on my own observation). Nowadays, things look slightly more evenly distributed.
That distribution is not even for Meebits.
What About Dark Skinned Meebits?
As people raced to buy all of the Meebits yesterday at an average of 2.4 ETH (or ~$8,000 at the time) they found themselves engaged in a lottery system. Independent of price, you were going to get one randomly selected Meebit. For many, the hope was that they would mint an ultra rare piece or at least one that they liked before running out of money.
In order to fund continued lottery tickets, many buyers were flooding OpenSea with bargain basement prices for quick liquidity. While that sparked an opportunity for savvy buyers, it resulted in the dumping of Meebits who don’t look like the minters: namely dark skinned and mostly female.
Still today, if you go an look at the lowest priced Meebits for sale on OpenSea, you’ll see the exact same thing. Additionally, yesterday’s consistent arbitrage opportunity was straight-forward: buy a white male avatar for less than 2ETH. If I had more ETH in my wallet at the time I would have executed on that plan. Do I feel guilty about it? Yeah, it’s fucked up.
It’s partially that feeling which led me to write this article. In even greater transparency I wound up with a pretty dope dark-skinned male with a jersey on. Yet the moment I got him I thought one thing: he doesn’t look like me. Combined with the fact that dark-skinned Meebits continue to sell for below purchase price, I had a sense of buyers remorse.
What Does This Say About The World Of NFTs?
To be fair, $8,000 on an avatar is a steep price for anybody. Receiving one that has no resemblance to you or isn’t some slick fictitious character that you are proud to display is disappointing.
Additionally, there is speculation that these Meebits will be used across the metaverse even deepening the association with one’s identity. So why would I want one that I don’t associate with?
That’s my justification for being racist.
The reality is that the market reflects the demographic bias which exists within the world of cryptocurrency and the entire system. When you look at the OpenSea marketplace it’s ugly.
So do we have any obligation to do something about it?
One could argue that the ugliness of the marketplace is actually a positive thing. It places a spotlight on how wildly biased the upper-end of the NFT market is at the moment. It makes it difficult to turn a blind eye.
For myself, prioritizing women and minorities that are doing awesome things in this space and interviewing them is one very tiny thing I can do.
But for the industry this is a tough question. Are the people we are hiring minorities? Is there more we can do to get minorities involved? Is it completely out of our hands?
If you listen to people like Tony Herrera who literally helped undocumented immigrants gain access to cryptocurrency, there are small pockets for change. Additionally, when I look at artists in the world of NFTs it is wildly diverse (at least among those who have access to the internet).
However the diversity stops when it comes to those with enough money to afford 4-figure avatars.
Personally, I’m not sure what steps we can take if any. It’s hard to feel on an individual level that we can really do anything about it. However shining a spotlight on how biased the system is does feel like at least one tiny thing we can do.
Now back to trading NFTs.