Max actually works full-time in advertising and film production, but, as he says himself, he has always been enthusiastic about innovations in the technology sector. We were able to talk to him about this beautiful project and have him explain how the underlying processes work.
Zaster: How did you approach the subject of NFTs?
Max Penk: The subject of NFTs first came to the fore in the media in March this year when the ‘Beeple’ artist sold his collection at auction at Christies for US$69 million. I then wanted to know more about what it was about and why a single person could make so much money with it. At the same time, I wondered if you could do something good with it.
What exactly are NFTs?
Penk: NFTs can be used to attribute digital files, i.e. images, videos or pieces of music, to an owner. It works in such a way that the owner is written to the blockchain for everyone to see. Blockchain is a universal, decentralized network that also uses cryptocurrencies such as Bitcoin and others. Indeed, NFTs are the title of ownership of a digital file.
The reason why NFTs are now mostly associated with art images is simply that the art industry is always at the forefront when it comes to technological issues. NFTs are of great interest to the art industry for two reasons, first, history can be used to trace who the artist is and who subsequently owned the artwork. On the other hand, you can be sure that it is an original and not a copy.
How did you come up with the idea of selling these NFTs for the benefit of animal welfare?
Penk: At first, it was not so easy for me to understand how NFTs actually work. In the end I was able to understand everything very well with my cats as a parable. I have three cats, but each is unique in its own way. This means that if someone dies I can’t just replace them with a new cat and have the same three cats again, I pretty much lose the emotional value. For me, this animal parable was so simple that I thought to myself, NFT and animals, that made sense.
After having concretized my idea more and more, I spoke about it to various actors, of which the WWF and the agency Publicis. After the project was approved by WWF following internal consultations, things moved relatively quickly. We first pitched the idea in May 2021 and were ready for launch at the end of October 2021, so to speak. In the meantime, it was necessary to find the artists, write contracts (which hide some pitfalls, especially in the financial sector) and of course introduce the subject of crypto and Web3 from scratch in one of the largest NGOs around the world. The implementation of the entire campaign, including the website and communication, was then carried out by the Publicis agency.
What are your buyers’ intentions? Is it mainly bought for investment reasons or is it more in the interests of animal welfare?
Penk: In fact, some of our buyers had never purchased NFTs before. That’s why we used the various social media channels to do a lot of publicity and education on this topic. Moreover, the purchase process itself is very simple, in the end you can buy an NFT from us with a credit card. Because we have implemented a process where you can create a wallet in one click and enter your credit card in the next click, so that you can then buy an animal directly. I guess it ended up being 70:30. In other words, 70% of buyers had previous contact with crypto and 30% were absolute new buyers.
Maybe some buyers see it as an investment project, but I would still say that many buyers can relate to animal welfare. Because it is clearly communicated everywhere that the proceeds of the sale go directly to the protection of animals and species.
Was it important to you that the artists also matched the project in terms of content?
Penk: Yes, we definitely did the classic background check on everyone. Our artists are often people who are already involved in the field of species protection or sustainability or who have even made animal works. Furthermore, the artists have made their images available on a voluntary basis, which is why they usually have a personal interest in the subject of species protection.
Is it complicated to create an NFT? And do the artists upload their own works?
Penk: In principle, an NFT is an addition to a digital file and it can be anything, i.e. a JPG or an MP4. This digital file is then the starting point you need to create an NFT. You then “mine” the file, which means that the file is linked to a value on the blockchain. This gives this file an attribute that can be found on the blockchain. What was also special about us is that we wrote the whole file on the blockchain, a lot of other projects don’t do that, they just write a reference to the blockchain. So, in the end, the artists sent us the digital file and we wrote it on the blockchain.
Is it also conceivable that other organizations fund projects via NFTs? Is this a future model?
Penk: I think it’s an incredibly relevant topic, but we’re not just talking about NFTs in the sense of works of art, we’re talking more about the function of an NFT. Because an NFT is just proof of ownership of something digital. An NFT can be anything, including WWF membership. Many NGOs are carrying out projects in this area, WWF has definitely been a pioneer here and the success proves them right, so far we have recorded nearly 200,000 euros in revenue. Thanks to Web3, it is now also possible to involve the community, and all NGOs now want to extend and integrate this into their decision-making processes.
I believe that around 98% (!) of pure art projects will lose their value in the long term, nevertheless the function of NFTs is very useful and will probably be found in all of our lives in the long term.
Have you already sold all the works?
Penk: Two works of art are already completely sold out, the Vaquita and the Saola. Both were only available in very limited quantities, there were 22 Vaquita pieces and 100 Saola pieces. All other works of art still have copies, but they are fewer and fewer every day, and when they are sold out, they are sold out, and then no new ones are created. The Vaquita, for example, was sold after 20 minutes and is already traded on the secondary market, which means it is already sold and resold there. It’s also very good for us, since 10% of all secondary market revenue also goes to WWF.
The project was highly publicized, was it also useful for WWF apart from income for aid projects?
Penk: With this project, the WWF has slipped into the technology leadership role to some extent, which means that it has suddenly been flagged in other areas. As a result, WWF took place on tech blogs or in crypto magazines, making the subject of animal and species protection accessible to a completely different group of people. In this regard, we were able to pay more attention to the issue of species protection.
Crypto is generally considered a climate killer. How did you solve this problem?
Penk: The bad reputation comes from the fact that, for example, a lot of arithmetic operations are needed to produce a Bitcoin and the same goes for the Ethereum currency. The problem initially was that most of these NFTs were on the Ethereum blockchain and were also sold with Ethereum. That’s why I did a lot of research in the beginning on how this process could be made more energy efficient and maybe even CO2 neutral. The classic purchase of CO2 certificates, which many companies practice, was out of the question for me, because I think it’s more window dressing, because then the environment is degraded anyway. In this regard, I was looking for more environmentally friendly blockchains.
Then I came across blockchains that work according to the so-called “Proof of Stake” method, which is much more environmentally friendly. I found what I was looking for in a blockchain called “Polygon”, which was precisely on the topic of low power consumption. Moreover, we did not use Ethereum as a currency, but USDC, a cryptocurrency linked to the US dollar exchange rate and therefore very stable. This energy-conscious approach was also particularly important for our artists. As a result, the underlying process was nearly climate neutral.
An article by Pauline Brinkmann