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Client Background:
Our client was a North Asian art gallery with an exclusive collection of Asian artworks from emerging and established artists. They were interested in exploring the potential of creating a non-fungible token (NFT) collection for distribution over various NFT marketplaces and were seeking our advice on the viability of this idea and the potential risks and rewards.

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Consulting Firm Approach:
To assess the viability of the NFT collection, our consulting firm followed a three-step process:

 

Step 1: Market Research
The first step was to conduct market research on the NFT industry, including its history, current state, and future trends. We also analyzed the marketplaces where NFTs are sold, such as OpenSea, Rarible, and SuperRare. This research helped us understand the opportunities and challenges that the client would face when creating and selling their NFT collection.

 

Step 2: Technical Feasibility
The second step was to assess the technical ease of creating and selling the NFT collection. We evaluated the client's existing digital art collection to determine which artworks were suitable for NFTs and advised them on the best ways to prepare the files for minting. We also reviewed the client's IT infrastructure and provided recommendations on how to securely custodize the NFTs.

 

Step 3: Financial Analysis
The third step was to conduct a financial analysis of the potential revenue and costs associated with creating, storing and distributing the NFT collection. We evaluated the fees associated with minting and selling NFTs, as well as the expected demand for the client's digital art. We also analyzed the competitive landscape to determine how the client's NFT collection would compare to other collections on the market.

 

Results and Recommendations:
After completing our analysis, we advised the client on potential demand for NFTcollectalbes that related to parts of their collection while arriving at the conclusion that while the absolute revenue generated from the sales of these collectables would be modest, such a sale would increase exposure of the works while also making them more accessible to a younger audience. We also cautioned that the NFT market was still relatively new and volatile, and that the ultimate risk for the Gallery was reputational in nature.  This analysis helped our client decide on their next move and provided them with a roadmap for success if they chose to move forward.