How AI can reshape NFT and digital art?

Original source | GCR DAO

Compilation of the original text | Baize Research Institute

AI is taking center stage in this wave of transformative technology—from GPT-4 to Midjourney V5 to Runway's Gen-2, AI innovations across text, images, and video are becoming the virtual brush of human creativity.

The fusion of AI and Web3 is revolutionizing digital art and NFT, bringing new possibilities to creators, changing the way digital assets interact, and shaping the future of digital art creation. Will this rapid advancement in AI lead to increased adoption and demand for digital art and NFTs?

To better understand the impact of Web3+AI, let's delve into some of the most promising use cases currently emerging in the digital art and NFT space.

• Botto, a generative AI art project governed by a DAO around the $BOTTO token, pushes the boundaries of community-driven creativity at the intersection of AI, DAO, and DeFi. Since October 2021, Botto's art engine has been producing 350 drafts, also known as "shards," per week. The DAO community votes for their favorite "shards" to be minted and sold on SuperRare each week. The voting data is then fed back to the AI, which learns from it to generate artwork that is more in line with the tastes of the community. Botto generates revenue through weekly art sales, royalties from secondary transactions, and item collection sales. Proceeds are distributed within the community according to the $BOTTO revenue distribution method to reward the community for participating in the growth and evolution of the project. To date, Botto has generated over 944 ETH in revenue and 1,264 ETH in total sales.

• Bicasso, a new AI art tool developed by Binance and recently rolled out to users, offers a whole new way to create images and mint them as NFTs. Drawing inspiration from popular AI art programs like Midjourney and DALL-E, Bicasso enables users to generate images by entering text, or upload existing images to iterate on. What sets Bicasso apart is its seamless integration with Binance's BNB Chain, allowing these AI-generated images to be minted as NFTs directly on-chain. As an artistic tool that can demonstrate the potential of Web3+AI, 10,000 NFTs of the beta test were minted by 9,212 users in less than three hours, further demonstrating the enthusiasm of users for this innovative method of artistic creation.

• Alethea AI is also making waves in the Web3+AI field, developing a decentralized protocol that allows users to generate and create interactive and intelligent NFTs (iNFTs) using multimodal AI systems based on language descriptions. Alethea AI is opening a whole new world of digital assets. Raising $31 million to date, the team is working to redefine storytelling and interactivity in the Metaverse, enabling creators to develop unique, engaging experiences for users while increasing interest in NFTs as a medium of artistic expression. However, adoption of Alethea AI is relatively small compared to other platforms, with only 1,402 daily active wallets according to Dune Analytics.

In the world of GameFi, companies like Scenario, Mirror World, and Altered State Machine (ASM) are using AI to generate game assets and transform the Web3 gaming experience.

• Scenario is a game art generator that enables game artists to automatically generate thousands of new assets in their unique style. This AI-driven approach not only simplifies the game development process, but also preserves the individual voices of the artists, ensuring their creative vision is not diluted by general artificial intelligence tools. After announcing Scenario's $6 million seed round, co-founder Emmanuel de Maistre shared that 5,000 creators have signed up for the platform, with 20,000 more on a waiting list. Fee-for-use pricing for the tool will be usage-based, starting at $20 per month, with plans to serve higher volumes of customers. Their mission is to unlock the opportunities that AI brings to the gaming industry: exponentially higher production volumes, dramatically reduced workloads, and completely unlimited creativity for AI co-artists.

*Mirror World is changing the GameFi landscape by using AI-powered NFTs as assets for in-game characters. "Mirror World is the first AI-powered virtual playground that brings crypto rewards to people," said Chris Zhu, Founder and CEO of Mirror World, "We want to create a 'Nintendo of the Web3' with characters that players love." The company recently raised a $4 million seed round with participation from Galaxy Interactive and Republic Crypto, among many other investors. Mirror World plans to use this round of financing to accelerate the launch of its first three games - ARPG (action role-playing game), PvP Arena (player versus player) and SLG (simulation game). Mirror World’s overall NFT volume hovers at 179.75 ETH, struggling to scale since 2022. Mirror World is currently working with Republic Crypto's economics team to design the tokenomics and DAO around the gameplay of the three games. The goal is to bring players a better gaming experience while promoting more sustainable economics and a "well-framed" economy. Eventually become an open, autonomous, sustainable and asset-interoperable game world.

• Altered State Machine (ASM) is pioneering a new AI ownership model with a decentralized protocol that allows users to own, train and trade AI-powered "brain" NFTs that can be used as virtual virtual machines for Web3 games and the Metaverse avatar. FIFA recently launched a beta version of its World Cup AI League, an ASM-powered mobile strategy game that uses AI to create its characters and game components. ASM raised $11 million in seed funding in 2022 from top investors including TCG, Coinbase Ventures, WMG, 6th Man Ventures, Delphi Digital, Outlier Ventures and Flamingo DAO.

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While the adoption of AI-driven projects and use cases in the NFT space is still in its early stages, their impact extends far beyond current applications, laying the groundwork for future innovations. AI-generated content platforms, decentralized AI protocols, community-driven art auctions, and interoperable game assets each present unique opportunities for growth and advancement in the fields of digital art and gaming.

While current criticism of AI art by some may be based on fear, there are ethical questions surrounding the creation and use of these tools. The convergence of AI and NFTs raises questions about ownership of creative output, potential for plagiarism, and manipulation of AI-generated content. Recent allegations of alleged copyright infringement against companies like Stability AI and Midjourney in the training of their algorithms have only fueled concerns. Addressing these issues will require collaboration between technologists, policymakers and the wider community to develop ethical guidelines that strike a balance between innovation and accountability.

As AI and NFT continue to merge, they will undoubtedly reshape digital art, games, and more, opening up new possibilities and inspiring people to further explore the vibrant and evolving Web3 world.

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