The ART WARS saga has become one of the most high-profile NFT launches to date. Rarely do you see a project launch itself into the stratosphere, and then crash and burn with such velocity.
For obvious reasons, people could not resist investing in this project. It seemingly had a direct relationship with Starwars, which insinuated Disney’s affiliation. The artwork itself was placed upon Stormtrooper helmets, one of the most iconic assets from arguably the greatest movie franchise in history.
It appeared to be the stuff you only dream about as an NFT investor.
What Could Go Wrong?
Unfortunately, almost everything.
If there’s any lesson to learn from NFTs at this stage, it’s that this technology is really new, the international laws are incredibly obscure, and most people aren’t even familiar with what an NFT is, much less how to invest in one. This asset was designed for a very niche market. It’s a tale as old as time, and where there is smoke fire isn’t far behind.
In A Galaxy Far, Far, Away
In order to tell this story properly, we need to go back a bit.
Andrew Ainsworth of Shepperton Design Studios was the original creator of the stormtrooper helmet and armor for Star Wars in 1976. In 2004, Andrew won the right to reproduce the helmets from litigation as a manufacturing loophole in the very high-profile lawsuit against Lucas Films. There were a few very important clauses that would later cause confusion and complication. First, he was not to sell the helmets as artwork. Also, they were not to be sold as official Starwars merchandise. Lastly, he could not sell any of the items in the United States. His friend and long-time collaborator Ben Moore had some other ideas. Ben Moore is a London-based artist and curator, best known for his live art exhibitions, called Art Wars. The exhibit has been around for several years, and in its own right became hugely successful in the art community for its use of the Stormtrooper helmets repurposed and redesigned by renowned artists around the world.
A New Hope
The Art Wars NFT project launched on November 6th, 2021 as a digital version of the helmets like the ones held at the live art exhibits. The collection was a limited supply of 1138 NFTs, with a mint price of 0.75 Ethereum, or the equivalent of $4000 dollars USD. The company, The Defi Network, which was behind the technical aspect of the project, also offered a drop pass to any would-be investor who wanted to secure their spot to ensure they could purchase on launch day, they were sold for an average of 2.5 to 3 Ethereum per pass. The Stormtrooper helmets immediately garnered attention as the main marketing tool, in addition, there was the promise of receiving a 1-of-1 collectible art piece and a real live-action stormtrooper helmet. In addition, the project gained even more momentum from all of the world-famous artists that were supposedly willing collaborators, including Damien Hirst and Mr. Brainwash to name a few.
The project had a built-in scarcity mechanism, and tons of allure, nostalgia, and novelty.
For reference, most NFT collections have upwards of tens of thousands, no reputable brand attached to them, and there are no physical products. This was going to be very rare indeed. Few people had access to such a hyped project, the expectations were high, and the inventory was low.
It was designed to sell out immediately and the Starwars fans did not disappoint.
The official collection sold out within 5 seconds of the launch. As a result, most investors were required to buy their helmets on the secondary market from OpenSea for an average price of 2.5 to 3 Ethereum or between ten to fourteen thousand dollars USD, and up to two hundred Fifty Ethereum. Then, the project immediately fell off the rails, here’s why.
Not The NFT You’re Looking For
Investors expected to receive a custom 1-of-1 Stormtrooper helmet made by world-class artists. To their surprise most helmets were made by an in-house team of unknown artists, using budget-friendly materials and novice-level presentation. Some investors reported having helmets that were copies of clipart, and random stickers, others just sheer copies of helmets in the collection. This was supposed to be a very high-end asset and the team just did not deliver.
In addition, the artists who did have prestige and notoriety had no idea their respective brands were being used with these helmets. There were no prior agreements and most of the artists didn’t find out about their suggested involvement until after the project launch sold out. These artists reported this issue to Opensea, the largest NFT marketplace in web 3, and they were forced to immediately take down the project. It never recovered, and the investors were left out to dry. The launch generated over seven million dollars in sales in less than a minute, and all that money went to the curator and his technical team.
Pay Me You Will
The artists weren’t paid. In addition, the team was undocumented and untraceable, using nicknames on all social media profiles, and shrouded in secrecy. Now, only the Ethereum wallets that housed all of the investor’s money are visible. For investors, every emotion you could imagine surfaced on the internet with pleas for help, upset, outrage, and revenge, but little could be done to ease their pain. Technically they received their NFTs, but those assets would become almost worthless within a matter of days.
According to film director and award-winning artist, and Art Wars NFT investor, David White, “my suspicions were immediately raised after joining the community. I asked the moderators and management about the details of the copyrights, but would either be ignored or they couldn’t provide any relevant information or legitimate documentation.”
David is now the co-host of Project 1138, a podcast dedicated to finding the culprits and bringing light to the dark days of the launch and how it impacted investors. His hope is that one day the NFTs will have some value to future collectors and Starwars fans following the journey. If there is anything to understand about NFTs right now, it’s that it is a high-risk high-reward scenario.
Unless you’re involved you can’t really benefit from where technology is headed.
Regulation is unclear and rules are loose to put it lightly. If you’re not careful, you can really get hurt.
However, technology is here to stay. For those willing to explore there are opportunities that can be life-changing in terms of wealth but keep your wits about you, as the Art Wars investors had to learn the hard way. There is an ongoing investigation into the project, the artists, and the team behind the launch.
