Sotheby's to Host Record-Breaking Auction of 3AC's Prestigious Generative Art Collection

Generative art has emerged as a prominent sub-section of the NFT space in recent years, captivating both native collectors and high-end art enthusiasts from the traditional art world.

With its dynamic and innovative nature, the art form has found a natural home in the decentralized and programmable landscape of NFTs.

By integrating numerical code that incorporates chance or orderly geometric patterns, generative artists are able to produce artwork that yields unpredictable results each time it is interacted with.

From Tyler Hobbs’ pioneering use of flow field distribution physics in Fidenza, to Dmitri Cherniak’s embrace of algorithmic randomness in The Ringers, generative art is a nostalgic throwback to the spontaneity of 1940s abstract expressionism. 

Whereas once it was Pollock’s action painting and Rothko’s smearing rectangular brushstrokes that captivated audiences, now in the age of the blockchain, the complexities of algorithms have become the source of intrigue, with irregularity still retaining its allure. 

The digital realm has experienced a scarcity of uniqueness and an excessive appropriation of art, a trend particularly evident in the NFT profile-picture (PFP) landscape, where animal-based derivative projects have saturated commonality.

However, generative art collectors actively seek uniqueness. Each piece is effectively a one-of-one work, symbiotically created between a human artist and a machine, offering both the uniqueness and unpredictability of outcomes, similar to what CryptoPunks has provided for PFPs.

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On June 15th, Sotheby’s will present GRAILS: Part II, a live auction in New York that is being touted as the largest ever live auction of digital art, featuring some of the most renowned generative artists in the NFT space.

This auction will showcase a collection of 37 works, including notable pieces such as Dmitri Cherniak’s Ringers #879, colloquially known as The Goose, six works from Tyler Hobbs’ algorithmic collection Fidenza, and three CryptoPunks by Larva Labs.

Sotheby’s, the oldest and largest international art auctioneer in the world, has been actively involved in the NFT market and experienced its strongest financial year in history in 2021, with consolidated sales exceeding $7.3 billion.

These record-breaking sales were partly driven by the growing popularity of NFTs and the influx of new collectors, with 78% of NFT bidders at Sotheby’s in 2021 being new customers, more than half of whom were under 40 years old.

Both GRAILS: Part I and GRAILS: Part II feature artworks that were previously owned by the now-defunct crypto hedge fund Three Arrows Capital and its founders Su Zhu and Kyle Davies, with Teneo, an advisory firm acting as the liquidator, partnering with Sotheby’s to facilitate the sale of the NFT collection

More recently, on May 19th this year, Sotheby’s hosted GRAILS: Part I. All lots within the auction sold for considerably above the estimated price range noted by Sotheby's, generating a total of $2.5 million from an estimated value of between $555,000 - $815,000.

Notably, Tyler Hobbs’ Fidenza #725 fetched $1.01 million, far surpassing its estimated value of $120,000 - $180,000. Private sales within this collection took the total above $6 million.

All artworks from GRAILS: Part I and GRAILS: Part II were previoulsy owned by the now-defunct crypto hedge fund Three Arrows Capital and its founders Su Zhu and Kyle Davies.

After the Singapore-based firm went bankrupt in July 2022, advisory firm Teneo stepped in as liquidator in an attempt to retrieve a small portion of the $3.5 billion owed to creditors by selling off the firm’s assets.

Teneo partnered with Sotheby’s to facilitate the sale of 3AC’s vast collection of NFTs “to realise the value of the NFTs for the purposes of the liquidation.”

ONE37pm sat down with Michael Bouhanna, Sotheby’s Head of Digital Art and NFTs, to discuss the 279-year-old auction house’s outlook on generative art, their artistic selection process and the rise of estimated auction prices. 

Bouhanna, who joined Sotheby’s in 2017, has played a crucial role in their foray into the NFT art market. In June 2021, Bouhanna organized Sotheby’s first curated NFT auction, Natively Digital, which achieved a total sale of $40 million across three editions.

“Generative art has always been a movement within the digital art space that really interested us”, revealed Bouhanna, “from the post-war period of the 1960s and the first artists that used computers in their process of creation, to now with blockchain technology and its whole younger generation of collectors.”

“I think with generative art we see an ecosystem that is closer to traditional art. We see both traditional art collectors who are already interested in conceptual art such as minimalism, but also a younger generation of collectors from the NFT space,” he added.

In a 1974 feature article published in Studio International, pioneering British artist Harold Cohen speculated on the proposition that machines possessed the potential to enhance the creative purpose, and process of artists in their pursuit of computer art.

Cohen was the inventor of one of the first AI art computer programmes, AARON. In its early iterations during the 1970s, the software could produce black-and-white drawings which were then plotted onto a page by a small robotic turtle-shaped device.

For a present-day audience, the artistic level of these drawings resemble the mindless illustrations of a toddler, but at the time, AARON showcased extraordinary possibilities for the future capacity of computer technology.

“Whether the machine can serve the artist’s purpose is more redundant than unanswerable”, remarked Cohen. From his perspective, a future era in which modern art was the collaborative process between human hands and computer code was quite simply “inevitable”.

For Bouhanna, selecting a roster of generative artists to showcase at Sotheby’s is a process which requires the consideration of many factors.

"We're really focused on the high-end of the market, so we look at the established artists—the ones whose work has been collected by some of the top collectors—but then we also balance that with looking at their work: technique, process, how they're innovating, which helps with the narrative of explaining the importance of the work."

Sotheby’s generative artist roster includes 20th century trailblazers such as Vera Molnár, Charles Csuri and Roman Verostko whose works have been converted into NFTs, as well as a new generation of Erick Calderon, IX Shells (Itzel Yard), Tyler Hobbs and Dmitri Cherniak, among others.

Cherniak’s iconic piece “The Goose” will go under the hammer during GRAILS: Part II with a $2-3 million estimate. In Bouhanna’s view, “it’s not just the most famous art piece in generative art, but maybe also in the world of digital art.”

“It’s really hard to guess how much, but I’m pretty sure it will outperform the estimates we’ve listed it for,” he predicted.

Canadian artist Dmitri Cherniak introduced his NFT project The Ringers to the art world via ArtBlocks in February 2021. As described by Sotheby’s, the 1000-piece collection consists of uniquely designed representations of a string wrapped around a set of pegs.

“Cherniak’s art balances control and randomness, creating a dialogue between the artist, algorithm, and observer”, says Sotheby’s.

Ringers #962 found a home in the Los Angeles County Museum of Art after prestigious NFT art collector Cozomo de’ Medici donated 22 works of art from their Medici Collection to the museum for permanent display beginning mid-July this year.

As for The Goose, Bouhanna believes that “it’s one of the better representations of what a long-form generative art can do.” Turned clockwise, the work portrays the image of a goose, an algorithmic coincidence that exceeds a one-to-one-million probability. 

“It’s a piece in which there is an immediately recognizable figurative subject”, says Bouhanna, an identity which “shows the importance of the machine, the algorithm, and how it has actually surpassed the artist in this exact output.”

Pre-bidding for GRAILS: Part II has been open online since June 1st, with the live auction commencing June 15th. Private sales are also available. 

Speaking on how Sotheby’s will define success of the auction, Bouhanna concluded that “it has already been a success in the way we’ve paid tribute to this new movement of generative art, and with all the educational material you can find.”