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By rebuilding background of Charlie Russell painting, Utica native isn’t letting the ghost town die

By rebuilding background of Charlie Russell painting, Utica native isn’t letting the ghost town die

Richard Hugo, the poet and patron saint of Montana’s ghost towns and abandoned places, said it best: “You might come here Sunday on a whim.”



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A sign explaining the history of Utica and Charlie Russell’s tie to the area welcomes visitors to Don Waite’s reconstructed main street. 




That line comes from “Degrees of Gray in Phillipsburg,” Hugo’s ode to the tiny town in the mountains near Anaconda. But he could be talking about hundreds of communities that dot Montana’s massive plains. There are places here that you don’t go to unless you’re planning on it. And you never really get a reason to visit. It’s hard to just pass through.

One of them is Utica. It’s in Judith Basin County in the foothills of the Little Belts, where Waite Creek (remember that name) and Courtneys Creek flow together to form the Judith River. Utica’s main drag is called Pigeye Road.

When Hugo wrote “Degrees of Gray in Phillipsburg” in 1973, Phillipsburg and Utica had a lot of similarities. It was silver that brought people to Phillipsburg, but in Utica it was two things. First there was the cattle, driven up the prairies from Texas to gorge themselves on the sweet grass of the Judith Basin, which stays green long into the year, well past the time most of the Great Plains have turned yellow. But what really put Utica on the map was Yogo sapphires, the brilliantly blue gemstones that can only be found in Yogo Gulch, a small fold in the Little Belt Mountains. Utica was the closest thing that passed for a town near Yogo Gulch.

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Rain clouds threaten Utica’s main drag. 




There’s an old story that Yogo sapphires are part of the Crown Jewels of England. It’s probably not true, but the myth’s prolificacy is a testament to the gem’s power in Montana’s imagination. The sapphires are our great claim to legitimacy, the priceless jewel you can’t find anywhere else. Miners flocked to the area to try and find the “blue pebbles.”



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Don Waite explains the significance of Charlie Russell’s “Western Scene,” one of the first paintings he did in Utica. 




It didn’t last. In September 1959 organized mining in Yogo Gulch came to an end. It’s become a place of hobbyists, and despite some rare success stories, widespread mining of Yogo sapphires has never really picked back up.

Phillipsburg’s mines dried up sooner, ending most economic activity in the town by the First World War. When Hugo visited in the 1970s he saw a town in disrepair, a ghost town just barely holding off its death rattle.

He wrote of the “two stacks high above the town / two dead kilns … that won’t fall finally down.”

Then a funny thing happened. Phillipsburg came back. The town rebranded itself as a tourist hub. Nowadays Phillipsburg is best known for being home to one of the state’s best and most prosperous breweries. There’s a candy store folks drive from miles away to peruse, as well as art galleries and upscale eateries. It’s a trendy wedding destination for movie stars, a sort of pretend Old West. For a few bucks, visitors can try their hand at mining for sapphires, the former life and death struggle turned into an Instagramable vacation moment.

Utica is still stuck in its degrees of gray. In fact, it’s worse off than Hugo’s Phillipsburg ever was. The poet bemoaned that, “One good / restaurant and bars can’t wipe the boredom out.” But Utica’s only got one, a bar and grill called the Oxen Yoke Inn where you can get a cold beer and a hamburger roughly the size of a hubcap.



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When driving into Utica, you can’t miss this sign beckoning people to visit Don Waite’s replica Charles M Russell buildings. 




Utica’s streets are dusty — the pavement turns to dirt after a couple hundred feet. And the residents’ mailing address is Hobson, whose population of 179 (enough to make it a city) have absorbed Utica’s 23 (still stuck as an unincorporated community). There are a few signs that mark historic buildings, but many are old and sunbaked, the metal clamshells protecting the words are falling apart. There’s a museum, but the hours posted in the window are from summer 2018.

But one man has dedicated himself to telling Utica’s story. His name is Don Waite. He’s now 83-years-old, but in his time Waite worked a series of federal jobs that brought him to Saudi Arabia and Indonesia. Currently, he lives in Spokane. But he keeps coming back to Utica.



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Don Waite’s big creative liberty is that he included the Judith Hotel, which was once owned by his grandfather. 




For almost 20 years, Waite has been building in his hometown. His work is now the most prominent thing in Utica, and if you drive by, you can’t miss it. He’s constructed a series of buildings that now line Utica’s main street. It’s difficult to say exactly how many there are because they all blend together, like something off of a western film set. There’s a hotel and a café, a pair of saloons, and a prominent general store with a big false front.

Those buildings might look familiar. That’s because Waite based them on the most famous depiction of Utica ever made. Waite based them on the structures you can see in the background in Charlie Russell’s painting “A Quiet Day in Utica,” which the painter, whose western works are so iconic they’ve become the images most people see when they imagine what the old west looked like, finished in 1907.



Charlie Russell’s painting “A Quiet Day in Utica” was reportedly done on commission for the owner of the General Merchandise store in the background, Charles Lehman. The painting includes Lehman and Russell as onlookers.






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One of the exhibits Don Waite has put together includes this breakdown of Charlie Russell’s “A Quiet Day in Utica.”




Waite has filled the buildings with paintings and pictures, telling the story of Russell and his connections to the Utica area. He’s built a great museum to this specific place, way out in the middle of nowhere, not on any major highways and at least 75 miles from the nearest interstate. Waite is so invested in the story of Utica because it’s also the story of himself.

Waite was born in 1939, and he grew up in Utica. He was raised in a small cottage that’s the first building on your left when you drive into town, across the street from his reconstructed buildings. 

“We had fun,” Waite remembered of his childhood. “We’d go down to the Judith River and hunt magpies. They’d give you a penny for a magpie egg, and five cents for two magpie feet. It was the darndest thing. We’d be gone all day and our mother never worried about us.”



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The Waite Photo Gallery is an open air museum of Utica history. 




“A Quiet Day in Utica” captures a gang of cowboys “tin-canning” a dog, which was a pastime where bored people would tie tin cans around a dog’s tail and watch the animal run around, clattering about. It feels too old timey to be true, but Waite remembers seeing it happen on the streets of Utica when he was a kid, years after Russell made his memories here.

The Waite family goes in deep in Utica. His first cousin twice removed, Jack Waite, came out here first. Shortly after, in 1882, Don’s grandfather Walter Waite followed Jack, who was his cousin. Utica was a rough and tumble cow town back then, full of cowboys who would drive stock out from Bozeman to feast on Utica’s grasslands. Walter took a look at the little town and saw a need.

“He decided to build them a big, fancy hotel,” Don Waite said.

So Grandpa Waite, along with a business partner, did just that, finishing the Silver Dollar Saloon in 1888. It was a grand place, with a bar in the front and an upstairs for dancing. There was a barbershop, and the saloon eventually expanded into a large livery stable. They even sold coffins out of the back.

Back then, Utica was on the main stage road through central Montana. Freighters needed a cool spot to store their perishables overnight, and Walter Waite obliged by building a pair of cellars.

The business was so profitable that they expanded into a full hotel, called the Judith.

“This was a first class operation,” Don Waite described. “They had 15 rooms, and a dance hall. You could eat, go to your room, go dancing, go to the bar.”

Waite can rattle all of this off the top of his head. He’s a student of Utica, full of endless stories. Sometimes one tangent will interrupt another. Waite knows so much about this place it’s hard to keep it all strait.

Russell, like Waite, knew Utica. It’s him, not sapphires, not cows, not even hamburgers, that gives Utica its great claim to fame. Russell was born in Missouri, but at age 16 he grew tired of the east and moved to Montana. He spent some time on a sheep ranch but quit, eventually winding up as a night herder on a ranch near Utica.

Being a “nighthawk,” as the cowboys call it, was a lonely job. Russell had plenty of time to think. Pretty soon he started to put the images in his head onto paper. His first major sketch, ”Waiting on a Chinook,” is of a skeletal cow freezing to death in the legendarily tough winter of 1886-87, which Russell spent on the O-H Ranch near Utica. The sketch became something of a phenomena in pre-statehood Montana, and pretty soon the night herder started taking painting seriously.



Waiting for a Chinook Charles Russell

“Waiting for a Chinook, The Last of 5,000” is a work by Montana artist C.M. Russell.






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This sign explains the history behind “Waiting on a Chinook,” Charlie Russell’s first major artwork, which he painted in Utica. 




His first makeshift studio was in the Shelton Saloon, which is one of the buildings Waite has dutifully rebuilt.



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Don Waite reconstructed this version of the Shelton Saloon, which was Charlie Russell’s first studio. 




He started the project in earnest in 2006. The buildings are made with reclaimed lumber that he found in broken and decrepit shacks along the Judith Basin plains. Those logs had been split decades, maybe a century ago, and used well. But with nobody left to live in them, Waite turned them into something else.



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Don Waite points out details in “Breaking Camp,” an early Charlie Russell painting from Utica. 




He also went into the mountains to cut down lodge pole pines, and got some shingles from an old church in Lewistown.

Waite does copious research to reconstruct these buildings. He’s got a packet of writing he’s done about the area. And he’s not alone. His older brother Walt wrote two books about Utica history. And his father Charles left a note in an early biography of Russell that misidentified the Shelton Saloon, confusing it for another building in town.

“Wrong!” Charles Waite wrote underneath the photo. He signed the correction and dated it 1948.



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Don Waite’s father Charles left this note in a book about Charlie Russell which misidentifies the painter’s early studio. 




Russell churned out art from the saloon. His early paintings bear little resemblance to the majestic work he’d do later in his career. They’re sparse and flat, clearly done by a greenhorn who has yet to fully learn about life on the plains.



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Don Waite has annotated Charlie Russell’s 1887 painting “Cowboy Camp During Roundup,” which includes many early Utica residents. 




But they’re full of character. Waite has many of them printed out and on display in his replica buildings. One, an 1887 work called “Cowboy Camp During Roundup,” captures Utica at its early cow-town peak. The painting includes portraits of many of his friends on the range. Waite has taken the time to annotate the painting, labeling each figure. They’ve got great cowboy names like Kid Antelope and “Slack” Jackson.

Waite is done with his buildings now. Truthfully, he only spends a few weeks a year now in Utica. The buildings are locked when he’s away, but you can admire them plenty from outside, and he’s installed an open air gallery full of pictures and writing about Utica’s history, which included icons like Calamity Jane in addition to Russell. And his phone number is on the sign that welcomes people to the buildings. He’s always willing to talk Utica. 



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Calamity Jane was an early resident of Utica, getting into a spat with Don Waite’s grandfather Walter. 






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Don Waite stands with a depiction of “James Earle Fraser’s “The End of the Trail” painted by his wife Nancy Little. 




Why does he do this? Why has Waite, the world traveler, dedicated this much time to the tiny town he grew up in?

“I’m crazy,” he admitted, before doubling over in laughter. “Well, at least some of the ranchers around here think I’m crazy. But people are really enjoying it. And I did it for the community.”

“Charles Russell is huge for Utica,” he continued. “He’s huge worldwide. He got his start right here.”

But it’s deeper than that. If you compare Waite’s buildings to the ones in Russell’s painting, you’ll see a couple discrepancies. The structures he’s built in Utica are just a little bit different from Russell’s painting. That’s because he’s included the Hotel Judith and the Silver Dollar Saloon, which were on the opposite side of the street from Russell’s point of view. These buildings are about Russell, of course, but they’re about the generations of Waites who have roots here, too, including Don’s two daughters, Karla and Kim.

“I did this for my granddad and my pioneering family that came here and weathered all of this,” he said. “I did this to share it with people. In 50 years, people can come by and learn that all of this happened here in Utica, Montana.”

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RTÉ suspends hiring €240K Fair City photographer amid backlash

RTÉ suspends hiring €240K Fair City photographer amid backlash
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RTÉ has suspended plans to hire a Fair City photographer amid a backlash against the spending.

The Irish Examiner revealed that the public broadcaster was to spend €240,000 over four years retaining a professional photographer to capture still images of the soap while in production.

The role was to require a 20-hour week from the successful candidate, over the course of three days, for 50 weeks of the year, to produce a minimum of 16 stills of the show.

In a statement on Sunday, RTÉ said it has “decided to suspend the current public tender process for Fair City photography.” 

The statement said the decision comes following last week’s announcement from Director General Kevin Bakhurst that an immediate recruitment freeze was being put in place as well as stopping all discretionary spending.

“RTÉ will pause the tender process and take time to review the volume of photography required and length of the contract, among other considerations. A revised tender document will issue once these decisions have been made,” the statement read.

Mr Bakhurst said that given the fall in the licence fee and the uncertainty over interim funding, and following last week’s announcements, RTÉ has decided to halt the current tender process for Fair City photography.

He said in a statement: “While quality professional photography is essential to enable us to promote our programmes and engage audiences, it is not possible for RTÉ to commit to a four-year contract or to this level of spend given the challenges we now face.

“So, we have decided to take time to consider the best way to balance the needs of the series with the need to reduce costs where we can.

“We will continue to explore how we can cut costs and maximise funding of our public services through commercial revenue, while also working hard to restore trust in RTÉ.” 

The fresh statement today comes just three days after the national broadcaster moved to clarify the nature of a contract and said it “cannot overstate” the importance of that role.

The matter was raised at the Oireachtas media committee on Wednesday where Mr Bakhurst along with RTÉ Executives and the Board were facing questioning about cost-cutting at the station.

Mr Bakhurst told the committee that he wanted to “know more about that” when quizzed about the Fair City contract.

“I have asked that question. I want to know exactly what the deal is,” he said, adding that he could “not believe that, on the face of it, it is as published”.

“I cannot believe it is just for the work as described in one line,” Mr Bakhurst said.

In a statement on Thursday however, RTÉ said of the contract that “popular soaps, such as Fair City, with multiple characters and multiple unfolding storylines have a sustained need for high-quality imagery across the year”.

Executive producer of the soap, Brigie de Courcy, added: “I cannot overstate the importance of high-quality, highly-curated photography in promoting Fair City in the busy landscape of press and digital publicity.”

How to use ChatGPT to learn photography

How to use ChatGPT to learn photography

photography

photography

This guide is designed to show you how you can use ChatGPT to learn photography. In an era where technology permeates every facet of our lives, the field of photography has also witnessed a transformative shift. Gone are the days when mastering photography meant spending hours in darkrooms or attending expensive workshops. While these traditional methods still hold their charm and efficacy, the digital age has ushered in a plethora of innovative learning platforms. Among these, ChatGPT, a conversational AI model developed by OpenAI, stands out as a unique and powerful tool for aspiring photographers. This comprehensive guide aims to explore the multifaceted ways in which ChatGPT can be employed to elevate your photography skills, from grasping fundamental concepts to mastering intricate techniques.

The Rise of ChatGPT as an Educational Tool

ChatGPT has evolved significantly since its inception, with each iteration becoming more nuanced and capable. It has transcended its initial role as a mere chatbot to become a versatile learning assistant. Its applications span a wide range of subjects, and photography is no exception. The model’s ability to provide detailed explanations, simulate creative brainstorming, and offer constructive criticism makes it an invaluable resource for photographers at all skill levels.

Laying the Groundwork: Understanding the Basics

Deciphering Photography Jargon

The world of photography is replete with specialized terminology that can be daunting for beginners. Terms like “aperture,” “shutter speed,” “ISO,” and “depth of field” are fundamental to understanding how to take great photos. ChatGPT can serve as a reliable glossary, offering not just definitions but also practical examples and analogies to help you internalize these concepts.

Navigating the Equipment Maze

The market is flooded with a dizzying array of cameras, lenses, and accessories, making it challenging to decide what to purchase. ChatGPT can simplify this process by offering tailored recommendations based on your specific needs, skill level, and budget constraints. Whether you’re debating between a full-frame DSLR and a compact mirrorless camera or wondering which lens would be best for landscape photography, ChatGPT can guide you through the decision-making process.

Skill Enhancement: From Novice to Pro

Step-by-Step Technique Guides

While hands-on practice is irreplaceable, understanding the theory behind various techniques can significantly accelerate your learning curve. ChatGPT can provide detailed, step-by-step tutorials on a wide range of techniques, from the basics like the “Rule of Thirds” to more advanced methods like “focus stacking” in macro photography. Each tutorial can be broken down into digestible segments, allowing you to grasp the nuances before you even pick up your camera.

Creative Challenges and Prompts

Every artist encounters creative blocks, and photographers are no exception. ChatGPT can act as a catalyst for your creativity by generating unique and challenging photography prompts. These can range from abstract themes like “capturing solitude” to specific technical exercises like “experimenting with high-speed sync flash.”

Feedback Loop: Refinement and Troubleshooting

Constructive Criticism Through Descriptive Analysis

While ChatGPT lacks the capability to visually assess your photographs, it can still offer valuable feedback if you describe your compositions in detail. Whether you’re struggling with framing, lighting, or color balance, ChatGPT can provide actionable suggestions to improve your work.

Problem-Solving and Technical Guidance

If you encounter specific issues like lens flare, chromatic aberration, or motion blur, ChatGPT can help you diagnose and resolve these problems. By discussing the settings you used, the environmental conditions, and any other relevant factors, the model can pinpoint the likely causes and recommend adjustments.

Beyond Photography: Networking and Career Development

Crafting an Impactful Portfolio

An impressive portfolio is your ticket to professional opportunities. ChatGPT can offer strategic advice on how to curate and present your work effectively. From selecting your most compelling pieces to sequencing them in a way that showcases your range and storytelling ability, the model can guide you through the entire process.

Staying Ahead of the Curve: Industry Trends and Marketing

The photography landscape is ever-changing, with new trends, technologies, and business models emerging regularly. ChatGPT can provide insights into the current state of the industry, tips for breaking into specialized fields like wedding or wildlife photography, and even strategies for effective self-marketing and brand building.

Summary

ChatGPT has emerged as a versatile and accessible tool for learning photography. While it can never fully replace the tactile experience of shooting photos or the nuanced feedback from a seasoned professional, it offers a rich supplementary resource for both beginners and experienced photographers. With its ability to explain, guide, critique, and inspire, ChatGPT is poised to become an integral part of the modern photographer’s learning journey. We hope that you find out guide on how to use ChatGPT to learn photography helpoful and informative, if you have any comments, questions or suggestions, please leave a comment below and let us know.

Image Credit: Aditya Wardhana

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Confronting the Unbelievable

Confronting the Unbelievable

When the photographer Irina Rozovsky moved from Boston to Athens, Georgia, she began taking walks around her new neighborhood. She’d push her daughter’s stroller to a nearby wooded path, trying to get the baby to sleep, and photograph what she could along the way. One day in 2018, after a storm, the path was flooded. A young girl stood in the bright sun at the edge of the murky water, observing the strange new scene before her—“confronting the unbelievable,” as Rozovsky puts it. The image reminded Rozovsky of the fairy-tale trope of a child getting lost in the forest. “It’s both a romance and a nightmare,” she told me.

Rozovsky’s untitled photograph will be on display this fall at the High Museum of Art in Atlanta, as part of the exhibition “A Long Arc: Photography and the American South Since 1845.” In an introduction to an accompanying book, the Atlantic contributing writer Imani Perry reflects on the 21st-century photographers who capture the region’s distinctive landscapes with compositions that evoke a 19th-century sense of the sublime. In the South, Perry writes, “nature takes over everything that humans create and destroy.”

Rozovsky insists that the work is not making an environmental statement. As a mother, she worries about the role that humans have played in warming the world her daughter will inherit. But as a photographer, she told me, she was drawn to this particular scene for its “serene and surreal” beauty, its unsettling scale.

A relative newcomer to the South, Rozovsky has been struck by the high drama of its nature. “It can be so wild,” she said, even just down the street in Athens. She’s not religious—but when trees fall, or a path floods like this, Rozovsky said, it can feel almost biblical. “There’s something larger than us.”


This article appears in the October 2023 print edition with the headline “Confronting the Unbelievable.” When you buy a book using a link on this page, we receive a commission. Thank you for supporting The Atlantic.

Requiem For Royalties: NFT Exchanges Abandon Recurring Compensation For Artists

Requiem For Royalties: NFT Exchanges Abandon Recurring Compensation For Artists

OpenSea, once the leading marketplace for non-fungible tokens, was built on a promise of perpetual royalties for digital artists. Then came upstart Blur, whose no-fee, trader-friendly platform put the focus on pricing and costs.

By Maria Gracia Santillana Linares, Forbes Staff


It only took a few months to kill the art world’s utopian dream of long-lasting income streams for content creators.

As of September 1, OpenSea, once the leading marketplace for art linked to non fungible tokens, rescinded its policy of mandatory royalty payments to NFT creators. The decision came after it lost its dominance to no-fee competitor Blur, which only appeared on the scene in October but then quickly gobbled up market share by not charging platform processing fees and became the top NFT trading site in February. Overall NFT trading volume has plummeted from about $5.36 billion in January 2022, according to The Block, to $410 million in August. OpenSea’s share of the struggling NFT market has plummeted to under 30%.

Besides the lack of platform fees, Blur does not force sellers to abide by royalty agreements, which creators who launch their works on OpenSea and a few smaller marketplaces can require on transactions in their artworks after the initial sale. OpenSea, which did police such arrangements, said it would no longer do so after August 31, and it seems unlikely that many buyers will offer the payments.

Without the guarantee of a long-term royalty stream, the appeal of creating works linked to NFTs lessens, and prices for the kind of computer-generated art often linked to the tokens are plunging anyway. So why should artists bother with NFTs?

“Making art is an act of risk-taking,” says Amy Whitaker, associate professor of art business at New York University. “It makes sense, therefore, for artists to share in the upside that they helped to create.” She termed OpenSea’s decision to abandon royalties “unfortunate.”

Digital works encoded onto blockchains rose in popularity in 2021 after the artist Beeple sold a collection of images previously published on his Instagram page for $69 million. Seeing the big bucks to be made in a seemingly simple process–just upload a digital file to an NFT marketplace, which would encode it, for a fee, onto a blockchain–hundreds, if not thousands of artists joined in. NFT aficionados, including artists and collectors, claimed that blockchain-linked art would democratize access to a murky and difficult-to-break-in market, making the opaque system of well-connected galleries and deep-pocketed buyers obsolete. The decentralized system for royalty payments, they contended, would also ensure that artists would directly participate in the appreciation of their works, typically earning a 10% cut on each subsequent sale.

Each marketplace maintained its own policy for awarding royalties to artists. Beeple for example, famously would sell his “drops” for $1 each, but as they were bid up and resold on NFT marketplace Nifty Gateway for hundreds of thousands of dollars, he earned tens of thousands in royalties on each transaction.

In its brief life, NFT-linked art has largely been digital, often in series of similar images with various unique features that make some more collectible than others. But anything can be linked to a token–traditional art, real estate, even musical instruments–and then tracked on its associated blockchain. So, the technology could speed transactions and cut out middlemen in many industries.

The fight for royalty payments has largely played out in the court of NFT marketplaces, websites that allow creators and sellers to list their pieces in primary and secondary transactions. In order to better compete with Blur, OpenSea launched what it called its operator filter, which allowed creators of NFTs to prohibit their tokens from being sold in marketplaces that did not enforce royalties. In other words, the filter blocked OpenSea’s competitors and required collections to trade either on its own marketplace or others that did enforce royalty payments, keeping them away from Blur.

Market forces did not cooperate with OpenSea’s strategy. Free trades and optional royalty payment policies quickly drew sellers, which in turn attracted buyers. Since prices and volume were controlled by traders, seeking quick, if marginal, returns, voluntarily paying royalties to artists were easily dismissed by them.

OpenSea’s trading volume plummeted to 27% in August as Blur’s skyrocketed from a mere 5% to 60% in the same time frame, according to data from The Block. Even OpenSea Pro, OpenSea’s no-fee aggregator and direct competitor to Blur which launched in April, has been unable to take market share from Blur, accounting for only 33% of trading volume on NFT aggregators in August (63% of trades happened on Blur), according to data from Dune Analytics.

But the playing field is not level for OpenSea. With no marketplace fee, Blur is living mostly on its $11 million in venture capital funding and a hefty supply of blur tokens, reward tokens given out to its founding team and traders as rewards for using the platform. While Blur has attempted to grow its customer base with the launch of its lending products (Blend) and more uses for its token, how long its dominance will last will depend on its reliance on its token model, which could make it susceptible to regulatory action.

Ultimately, OpenSea has not only lost market share to Blur, but it is taking a smaller piece of a smaller pie. After peaking at $16 billion in January 2022, NFT trading has plummeted, with only $559 million worth exchanged in August in 3.2 million transactions, a more-than-60% volume decrease from last year, according to industry research firm DappRadar. Even then, only 15% of unique active wallets contributed to August’s NFT transactions. In July, only 4% of wallets traded the NFTs.

Few transactions and even fewer users (measured by the number of unique wallets) points to a new normal in NFT trading which is bad news for digital artists: traders rule the market, and most refuse to pay royalties.

Blur’s predecessors, aggregators like X2Y2 and LooksRare which listed NFTs available in various marketplaces, set the standard for royalty-free marketplaces geared toward traders by offering quick no-fee transactions. Others, like Magic Eden, the largest marketplace for NFTs on the Solana blockchain, and Ethereum-based OpenSea, had to respond to draw customers back to their platforms, lowering costs one way or another. Magic Eden took the first step, moving to a royalty-optional model in October as trading declined, preceding OpenSea by two weeks.

The royalty policy changes at OpenSea and other marketplaces should send a loud wake up call to Bored Ape Yacht Club maker Yuga Labs. Since it debuted in April 2021, Yuga has received $58 million in royalties from the resales of its Bored Ape collection. Its Mutant Ape Yacht Club and “Otherdeed” collection brought in nearly $100 million more. Chiru Labs, which designed the anime-inspired Azuki collection, and Doodles, purveyor of pastel-forward illustrations are also likely to take big revenue hits.


TOP 10 ROYALTY GENERATING NFT COLLECTIONS

Through August 2023, profile picture collections have received the most in total royalties since launch, garnering millions in fees from secondary trading. But when it comes to effective royalty rates, metaverse and gaming NFTs, with rates of 8% to 9%, are the winners.


Even prior to OpenSea scrapping royalty payments, 10% royalties were more of a goal than a reality. According to Nansen, the average royalty for the highest earning collections was between 2% and 4%. Top-performing gaming collectibles were earning 5% to 10%.

Though they stand to have the most dollars to lose, some big creators are insulated by the brand recognition they’ve garnered, including shows at traditional museums, and can still claim the big bucks on primary sales. Chiru Labs, for example, raised $38 million ahead of its much-anticipated “Elementals,” although investors ultimately thought that collection of characters with almost identical designs was a flop.

The most dire consequences of the loss of royalties are likely to fall on the smaller creators whose monthly payments have been in the hundreds or low thousands of dollars but who have included the income in their financial planning, according to Calderon.

At the $6.7-million collection Rektguy, the loss of royalties is having tangible results, says co-founder Ovie Faruq. “We’ve used royalties to pay a moderator, to put-on real-life events, to build different competitions and build our website and community,” he says. “So, when you strip that out, it changes the business model.”

Combined with the evaporating royalties, NFT participants face new U.S. regulatory issues. The Securities and Exchange Commission last month required Los Angeles-based Impact Theory, a digital media studio which raised $30 million from its NFT sales since 2021, to revise the smart contract underlying its Founders Keys NFTs to eliminate any royalty payment the company may receive from future secondary market transactions. The SEC alleges the company sold unregistered crypto securities through its sale. Because Impact collects and profits from the royalties (set at 10%), rather than the digital artist, the SEC contends, its NFTs are securities. This week, the SEC also fined the creators of the Stoner Cats collection $1 million over the sale of unregistered securities.

Impact Theory’s NFTs offered a number of exclusive opportunities to holders, including discounts and early access to videos and gaming content. To settle charges that it was selling unregistered securities–the first SEC enforcement action against an NFT issuer–Impact Theory also agreed to destroy its remaining supply of the tokens and pay a $6 million fine.

If the SEC is looking at royalty payments as a potential criterion for treating the tokens like securities, NFT studios, collectors and even the marketplaces they’re traded on could be susceptible to the same kinds of enforcement actions the agency has been taking against cryptocurrency companies. The way the Impact Theory NFTs were structured may have made them especially susceptible.

“There’s a pretty good argument for the artists receiving royalties downstream, based on certain case law,” says James Walker, co-lead of Perkins and Coie’s fintech enforcement and compliance team referring to the way the entertainment industry compensates musicians, actors and screenwriters, for example. “But there’s a stronger argument [that NFTs are securities] when you have a company [like Impact Theory] that isn’t involved in the creation that is getting royalties downstream from certain NFTs issued.”

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