Streetwear legend Bobby Hundreds thinks NFTs are a scam – and the future
Fashion designer, writer and photographer Bobby Hundreds has been playing at the forefront of culture for 20 years now. His streetwear label The Hundreds has helped define a model for the community and mainstreaming of cultural mashups. (The Hundreds recently celebrated its 20th anniversary with a Warner Bros. collection that brings together Looney Tunes and DC Superheroes and reissues old designs that reference cult classics such as Kentucky Fried Movie.)
So, Hundreder’s initial interest in NFTs made perfect sense, as did his timing before the beginning of the hype cycle. He first became interested in NFTs in late 2020, at the time seeing them as a way to offer digital collectibles to fans of The Hundreds. He and his team developed what is known as a profile picture (PFP) collection inspired by the company’s logo character, the Adam Bomb Squad. But by the time the NFT collection was launched, the sector had already changed from the digital underground to the center of popular culture. Bored Apes traded for hundreds of thousands of dollars, and potential investors were looking for the next big jpeg collection that they could quickly flip through to make an astronomical profit.
The market has obviously cooled considerably since then. Hundreds fought valiantly for artist rights last year (helping earn The Hundreds a nod as one of the most innovative companies in crypto), but the market has largely shifted to a model that doesn’t prioritize compensating artists when an NFT is resold. Overall interest in NFTs has fallen sharply as trading has dried up – NonFungible Data shows that daily NFT sales are down 83% since January 31 this year, and that’s after a sharp decline in the second half of 2022 in the midst of the larger pullback to crypto winter.
Through it all, Hundreds took notes and wrote a series of essays that reflected his thinking and the development of digital collectibles. These essays will be published on 16 May as NFTs are a scam/NFTs are the future. Fast company spoke with hundreds to discuss the future of NFT technology, what building a community really means, and where things went wrong for speculators looking to make money.
Fast company: These essays represent your thinking over a period of approximately 18 months. At the beginning of the book you say that some of your early theories did not hold up. What are some things you misjudged?
Bobby Hundred: At the end of 2020, I was really hopeful – and I still am – about how this new technology could change the relationship between brands and consumers. I also saw an opportunity to change the way we treat artists and reward them properly for their work. I think we’re still seeing the first: The Nike dotSwoosh program is one to watch because they’re doing something interesting in terms of rewarding the community. People submit their designs and if one of their designs is produced, they will receive royalties for that work.
On the other point, in terms of artists receiving royalties from their work, I was more hopeful in late 2020, early 2021. I also thought we would bring a lot more people into the NFT space during those last couple of years than we actually did.
FC: Why are you less hopeful now?
bra: Almost all of us were under the impression that the Web3 technology and culture was based on the idea that we would use smart contracts to ensure that creators receive royalties forever on their work. It was more or less a promise, if not a social contract, with the marketplaces. But as soon as the bear market hit crypto, marketplaces essentially canceled that promise. They—I’m talking about some marketplaces like OpenSea—decided that creators would get zero royalties to preserve their bottom lines. It was quite disappointing.
FC: Was the idea that buyers would save money by not paying royalties?
bra: So collectors must pay 4% on every secondary sale of one of our Adam Bomb Squad NFTs. Some marketplaces started letting people pay 0% in royalties, and buyers left OpenSea to save money. In a bull market when everything is going well and you can buy a jpeg for $100 and flip it for $5000, everyone was happy to participate. In a downturn, when people were losing money, they didn’t want to pay creators anymore.
This is bad for the lifespan of the space. You want to pay artists and creators, because if they are not incentivized or compensated for their work. . . why would they continue to work on projects? Eventually, they’re going to leave because they can’t or won’t work for free.
FC: How has your NFT project – Adam Bomb Squad – been affected by the downturn?
bra: We launched during Bored Ape Summer, i.e. the summer of 2021, but we had been working on our project in February. In that time, much had changed about what people expected and wanted out of an NFT. At first, they—and we—were just like, “it will be fun for our community to have collectibles.” We saw them as membership cards to reward our community.
But by the end of the summer there was an influx of people who had collected Bored Apes or made a lot of money trading CryptoPunks. Our project of 25,000 NFTs sold out in 40 minutes. These high-profile traders had come in and picked up a bunch of them. Because everyone can see what’s going on, others started buying them, thinking the project would make them rich. It was not what we ever intended to do.
We’ve built brands that have taken decades to mature, and we looked at NFTs the same way and hoped for organic growth. It was antithetical to what people wanted out of NFTs at the time. Many day trader types immediately left when they realized they weren’t going to make money overnight, and eventually much of our endemic community left.
FC: What do you think of the collection now?
bra: The Hundreds is more or less just a brand that continues to build in Web2 and Web3. I believe over time these collectibles will become more rare and valuable. I’ve seen sneakers do this, where for 10 years no one cared, and then suddenly they do. I also collect cards and art. The biggest factor in all of this is time.
FC: People in the NFT space often talk about being part of a community. What does community mean to you?
bra: Overnight, after we released the NFT collection, we had about 8,000 unique collectors in our “community”, and if you went into our Discord, you had thousands of people in there. But it wasn’t really our society. People confuse having high numbers with having loyal supporters, but many of those who joined were just opportunists.
The biggest trap I see in marketing and branding in recent years is that everyone talks about community when what they really mean is their customers. For me, community can only be one person I have a connection with. We are on a first name basis with many of The Hundred’s strongest advocates and loyal supporters. It’s the community. I don’t have any metrics, but I do know that every time we open a store or take a drop, I want to be out there greeting people that I know by name.
FC: Some companies like Starbucks or Nike use NFT technology, but call it by a different name, like digital collectibles. How do you feel about the level of abstraction?
bra: I think that is perfectly fine and fair. The term NFT carries a lot of stigma, and some of the brands that truly believe in the technology and see its power just don’t want to be associated with that stigma. I mean, a digital collectible is much easier to understand than a non-fungible token. It might be helpful for people to start using a different terminology.
FC: You alluded to the fact that early on NFTs seemed like a way to bring more marginalized identities into the tech space. How do you feel about it now?
bra: I thought NFTs were kind of a side door to tech and finance communities. When I started with NFTs, I was invited to dinners with technical leaders for the first time in my life. We have been sold this lie that artists have to struggle and starve and be poor. I thought for the first time, through NFTs, minorities or marginalized communities could come in and steal some power. This is how it looked in the beginning. You saw many minority entrepreneurs and female founders start projects like World of Women.
It turned out to be a lot of virtue signaling. People would buy a World of Women NFT and say, “I have this NFT, I love women,” and then behind the scenes they were just trash against women.
FC: You have used NFTs for ticketing purposes. Are there any practical applications you are excited about?
bra: I think token gating is really cool. Tokenproof, the leader in token-gating mechanics, did a project with Adidas where anyone who came could get an NFT that you could create on the spot, and once you had it in your wallet, you’d get a discount code for when you shopped on the Adidas website . It is a very practical use of the technology that people can understand as consumers.
FC: Tell me about the title of this book: NFTs are a scam is quite provocative.
bra: The title of the book is NFTs are a scam. It pissed off so many people in the NFT community, including some of my closest friends. I ask them to promote the book and I can tell they just hate the title. We’ve done a couple of pranks—bought a billboard in Times Square that says “NFTs Are A Scam” during NFT NYC—and then staged a fake protest the following year. We wanted to disarm people. It really struck a nerve. I think if you can say, “Yeah, I get it, some of this is pretty stupid,” you’ll convince more people to be on your side than initially being an NFT Bible thumper.