The Inconvenient Truth About Secondary Markets
9 min readNov 6, 2020


The Invisible Economy Crypto Art Group. Session 5.


This was an extraordinary session with special guests, Amy Whitaker from NYU and Massimo Fransceschet, who presented his data analysis of wealth distribution among artists and collectors on SuperRare, whom we thank for making this data available. Bea showed a presentation about secondary markets, followed by a lively discussion with old and new friends.


Many pearls of wisdom in the sidebar chat:

Gus Grillasca: Also called Pareto distribution.

Sebnem: or Power Law.

Arjit Kapoor: Mathew Effect.

Massimo: Cumulative advantage.

Sebnem: hahah.

Massimo: The rich get richer.

Arjit: “For to everyone who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away”.
— Matthew 25:29, RSV.

Massimo: Preferential attachment.

Gus: Interesting to note that this kind of distributions not only apply to wealth distributions but seems to appear in all sorts of natural phenomena.

Sebnem: But these are all models that explain models we built — so as Bea explains, these are not really sth like Natural Law…

Arjit: Most social systems follow power-law distribution.

Massimo: In Nature, the gaussian (normal) distribution is more popular, it’s the norm.

Sebnem: Love it!

Arjit: Nature yes, social and complex system not much.

Massimo: When it comes to talent, you get a long-tailed distribution.

Eleonora Brizi: Bea, like Cuomo ❤

Sebnem: Flatten the inequality ❤

Gus: xD

Ilan Katin: Flatten the fat?

Sebnem: haha

Arjit: Absolutely valid point indeed.

Altered_Data: Avoid ranking could be a good way to avoid to build hierarchies and privileges. Because it affects also the psychology of the top rankers, not just of the lowest ones ranked. This creates huge problems, non just in terms of economy, as numbers and metrics, but the culture of a market. Because who achieves the top ranking place might feel worried about losing it and who is at the bottom works to achieve that top ranking. We race to the top basically, toxic and of course, influence collectors’ choices and maybe taste and value gets polluted.

Judy Mam: Yes. It has deleterious consequences on the cohesion of the community.

Sparrow: It ripples out into the whole ecosystem and that’s when you get toxic behaviours.

Altered_Data: Totally, I agree. it is also a very obsolete way of valuing success, quality, etc etc. It’s just spectacular in some gaming ways but it has some serious consequences.

Ilan: Scarcity creates a city of scars.

Arjit: It’s a narrative designed specifically to concentrate wealth for the few

John Crain: I don’t think wealth is zero-sum :). I, unfortunately, have to jump. ❤ you all and will put down some thoughts soon.

Sebnem: It entirely depends on the rules of the game that is being created. When presented like this — it becomes very clear how Art really is Cultural Commons.

De Dageraad: There should be something different than changing the rules, because you’ll never be able to do that.

Sebnem: and clearly there are positive-sum games that can be created. Oh yes we do.

Ilan: Whatever was written can be re-written.

Sebnem: This is similar to creating over-the-top markets (like we’ve seen with media happening). Ilan is on fire :)

Altered_Data: Strong counter-narratives to the state of the art of the market.

Judy: @De Dageraad We are creating different rules for our system.

Eleonora: Cryptonovellas hahah.

Gus: CryptoDrama never sleeps

Judy: Los ricos también lloran, Gus, haha. There is a soap opera in Mexico called The Rich Also Cry.

Altered_Data: cry of joy 🤣

Judy: cry all the way to the bank.

Ilan: “the poor are fat. the rich are sad.”

Sebnem: keep it real! :D

Lenara: DADA wants to create an experience for the collectors.

Sebnem: that’s a good call for collectors!

Lenara: Like what artists have on dada talking to each other. That’s very special and has extra value. It’s not just about buying and reselling for profit. It’s much more. A lot of it is priceless and extremely valuable.

Sebnem: rare collectors ;). Sooner. Everything happens at digital pace and scale — for better or worse.

Ilan: “we’re not evil” ;)

Sebnem: hahah

Gus: xD

Altered_Data: Well said, don’t use community as an alibi for business.

Jason Bailey: Think that Gus hit on something in that not everyone will ever agree on a single platform or a single approach. It’s important to have a variety of platforms with diverse approaches (same as it is important to have diverse artists). DADA is a particularly important platform in that its ideas are more radical (aka different) from the other platforms. But the other platforms don’t need to go away for DADA to succeed.

Sebnem: Actually, these rules can create systems that “can’t be evil”.

Sparrow: Yes, totally, Judy.

Altered_Data: One’s own business, I meant.

Ilan: It’s exhausting. And boring.

Eleonora: I don’t like exclusion. If there is one good thing about DADA is inclusion, so yes: it should be for everyone. The starting statement is not good: DADA IS NOT FOR EVERYONE. I think. Please do not transform the only platform that is for everybody to something that is not for everybody (answering to Sparrow).

Lenara: yes it’s about creating alternatives.

Ilan: DADA IS FOR EVERYONE (except for speculators)

Sebnem: hahah

Lenara: Come on, speculators might also have a heart (sometimes).

Altered_Data: Innovation of people, of culture, and not just of the media to carry on obsolete toxic market strategies.

Judy: Yes!

Sebnem: It’s not exclusion — it is inclusive — it’s just if you come for other reasons it just won’t deliver, e.g. an artist wants to build an audience, and wants to pick their collaborators, they won’t find those features on DADA — I think that is how Sparrow meant it.

Amy Whitaker: I have to hop off momentarily — great and inspiring to hear the focus on intrinsic motivation. To me, this leads to philosophical engagements with equity as a protective membrane against ‘commensurability’ (the conversion in this case of artistic into monetary value). I’m working on this paper now and am happy to share it when it’s more done. Separately, Lovo and Spaenjers’ typology of collectors might interest you. I would argue one could design governance structures with subordinated collector rights. Amazing group and thank you for inviting me to participate ❤ to DADA and the whole community. From Lovo and Spaenjers p. 755:
• Flippers : An owner is a flipper if he auctions the artwork no matter his distress status σ or the macroeconomic state ω . Flippers are individuals of type e < _e and exist only if e > 0.
• Investors: An owner is an investor if, when not in distress, he auctions the artwork in some macroeconomic states but not in others. If there are at least two different states, investors always exist: they are individuals of type e ∈ (_ e , e ].

  • Collectors: An owner is a collector if he never consigns the artwork to auction as long as he is not in distress. However, there are macroeconomic states in which he will auction off the artwork if distressed. Collectors always exist: they are individuals of type e ∈ ( e , e__ ].
    • Super-Collectors: An owner is a super-collector if he never attempts to sell,
    no matter his distress status or the macroeconomic state. Super-collectors are
    individuals of type e > e__ and

Sebnem: wow Amy!! Amy gotta join the system model working group ❤

Sparrow: When I said it is not for everyone, that means that not everyone will want to participate. Speculators, for example. Or artists who only want to monetize their work. And that is fine. There are already platforms for them. Everyone is welcome in DADA, always.

Lenara: The invisible economy is like the fourth wall separating artists from the horror movie of the market.

Eleonora: Do not make the same mistake as everybody else, which is putting yourself in a ghetto. Speculators can learn from that, can change idea, can contribute… I wouldn’t divide and label groups of people. It should be for everyone who feels comfortable around it. That is what I meant.

Judy: Yes.

Altered_Data: I am building a project with some other artists. The project is called White Page Gallery/s. we are working on new methodologies and practices for online art curating but we are especially working on spreading a new culture in art based on human values such as integration, inclusivity, accessibility, solidarity. We hope to achieve this by shifting the focus from the artwork to the practice, and from the artist to the community. We hope that we could spread this experience and experiment to communities beyond art and make it into a common culture. I will share this recording with the rest of the people involved with White Page Gallery/s, might some will join DADA. We share many ideals and goals, feelings and vibes. I enjoyed to be here, gotta go now but I will join you again. Thank you !!!

Judy: Thank you!

Karen Frances Eng: I buy for my enjoyment and the sense of authenticity between artist and their art.

Sparrow: DADA is and always will be open and that is what we are trying to protect in the Invisible Economy. But it already means that some people are not interested in it, as it now. And what I meant was that it is ok if some people don’t get it and don’t want to be a part of it. If they do want to be a part of it, they will always be welcome. :) Thanks Altered Data!

Sebnem: DADA may be the regenerative “recreational” space :)

Judy: Thanks, Sebnem. I will ask your question about the value of speculation.

Karen: It’s so true — one of the things I think about every day is, did I do at least one thing to uplift another artist and their work today? It’s a daily practice. It helps me to survive the space, haha.

Eleonora: Yeah. I still recognize myself 100% with what Jason Bailey just said. But thank you DADA for doing this! You are pushing the space forward and especially bringing up discussion. Which is the highest value.

Karen: Ilan! :D. Hey, when I first saw Ilan perform I went to talk to him and that is why I’m here today. :)

Judy: So cool!

Kirk [untitled, xyz]: Those are very important points, Jason. Cryptoart needs a healthier balance of empathy for artwork/artists (and real discussion about what the art actually means/intends, not just what it looks like or what software built it) … and less of a general lean towards auctioneering on Twitter. This is why “conversations” on DADA are so important/healthy for the space right now. I think we’ll get there…

Jason: Agree ❤. Artists aren’t just physically starving from lack of money, they are emotionally starving from lack of attention and support.

Judy: Yes.

Jason: We need a support economy.

Judy: Yes, giving attention and support will bring the other.

Sparrow: We are designing that into our system, Jason!

Jason: :-)

Lenara: Support is priceless and extremely valuable.

Gus: I love these conversations. Thanks, everyone :)

Mr. Monk: Love you all! Thanks for all your wonderful thoughts. See you soon.

Judy: Bye Monk! See you in Vancouver!

Karen: Thank you for the presentations — it was fascinating and clarifying.

Fabiello: DADA to me is like a big bottle of fresh air to be drunk together, go on like this :)

Judy: Grazie, Fabiello.

Eleonora: @bea thank you for having us! I don t need to add many opinions after our discussions and bottles of wine in Rome. But for those who don’t know… DADA is my fav project on the blockchain and it will always be. Also speaking in terms of ART, which sometimes we forget about. THANK YOU for what you are doing for the space and all the doubts and questions can just push the discussion forward. You know what I think, I feel that after speaking with DADA I need to go back to reality. But you have my full support to make any change in the space.

Thank you!

— — — — — — — — — — — — — -

I was thinking about Gus’s counter argument that if a system does not play by free-markets rules, the theory goes that it will be outperformed by other platforms. Ie. DADA would be outperformed by Super Rare or Rarible.

I didn’t mentioned it in the call, but I can actually dismantle that argument with just one word:


Here is a segment of our paper: “In his book Drive, author Daniel Pink writes that in 1995 it would have been impossible to find an economist who would believe that the most popular free encyclopedia in the world was made by thousands of volunteers without any special qualifications, and could out-compete and ultimately kill Encarta, an encyclopedia owned by Microsoft and produced by well-paid, highly skilled writers and editors. “The popular observation is that Wikipedia only works in practice. In theory, it can never work” write Sheizaf Rafaeli and Yaron Ariel in Psychological Aspects of Cyberspace.

Wikipedia proved that decentralized knowledge can fuel a different kind of information network that doesn’t rely on market norms, self-interest, scarcity, and competition but rather on social norms, cooperation, creativity, and altruism. More importantly, by outperforming Encarta, built by the world’s most powerful profit-driven company at the time, Wikipedia demonstrated that its model could be more efficient than the markets. Still, Wikipedia operates on a donation-based revenue model.

We believe that information networks can be self-sustaining without relying on donations or traditional business models.”


See you in two weeks!



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