Genesis

We started Foundation with the vision of empowering digital creators with crypto. We were guided by the belief that tokens and smart contracts would become powerful tools in the hands of creative people on the internet. In our minds, the artists, musicians and storytellers of the world would realize crypto’s true potential.

It turns out we were right. Since our founding, Foundation has facilitated the sale of hundreds of millions of dollars of digital art across every medium and genre imaginable. Memes, music videos, animation, generative art, illustration, photography and AI-generated imagery have all found a vibrant home on Foundation.

In early 2020, when Foundation was first getting off the ground, our vision felt distant because there were very few artists seriously engaged with crypto as a medium. Crypto was an alien technology with little to no mainstream appeal. To make the technology more palatable, we attempted to abstract it away — to make it invisible.

In the process, we learned an important lesson: crypto wants to be seen. Abstraction led to poor user comprehension, and, in turn, poor engagement and retention. In an abrupt pivot, we opted to invite our early community to engage with the technology directly, and something marvelous happened: things started to click. One by one, artists and collectors started to see crypto’s true promise: immutable, eternal provenance, digital ownership, and global markets denominated in a currency native to the internet.

When compared with 2020, the space has made enormous progress but we also acknowledge that the space hasn’t grown tremendously since its big bang moment in 2021. We believe the space is ready for its next leap forward. And the next leap forward entails moving the digital art ecosystem to Ethereum L2.

Ethereum L2

Ethereum, the substrate from which NFTs are spawned, is itself changing. The Ethereum community isn’t settling for a world in which users need to pay $50 or $100 to transact. That was never the vision. Ethereum’s roadmap dictates that it will evolve beyond its origins as a single, all-purpose chain into a network of rollup chains.

These rollups create new layers for experimentation, exploration and discovery, unbridled from the prohibitive expense of mainnet while still inheriting its technical architecture, security and base currency.

While the digital art market is still rooted on Ethereum mainnet, its future is inevitably on Ethereum L2 where orders of magnitude more collectors will be able to transact, participate and grow enamored with digital art. What’s clear from the exploits of xcopy, Zancan and Jack Butcher is that collector interest has never been higher. What’s been in the way has been transaction costs. Crypto doesn’t just want to be seen, it wants to be used, and high gas fees are at odds with such a clearly stated desire.

Crypto’s broadband era

People often look to the physical art world as a comparison to guide their thinking about what’s possible in digital art. There’s certainly credence to that approach. Digital art and physical art are both bound by provenance. But it’s not sufficient. NFTs are equally internet as much as they are art. And the internet has unique properties that set it apart from the physical world.

Crypto is undergoing a transition that has clear precedence in previous cycles of technological evolution. The mainframe preceded personal computing. Dial-up modems preceded broadband internet. L1 to L2 is a transformation on the same scale, which should invite enormous confidence in the future of web3 and digital art because on the other side is a step change increase in adoption, utility, and societal impact.

Very few early internet users could have predicted how ubiquitous and far-reaching the internet would become once we all had broadband internet connections. L2 will be similarly impactful.

L2-first

Foundation has always operated with the assumption that L2 would scale Ethereum and become the default user experience for the vast majority of users.

It’s why we elected to put our marketplace and creator tooling onchain despite the cost to both us and our community. We understood that onchain was the right long-term architecture and that gas costs would be addressed by innovation at the L2 layer. That’s precisely what happened with EIP-4844, which went live on March 14, enshrining rollups on L1 and dropping gas fees to pennies on L2.

It’s why we experimented with xDai early in our journey to understand the limitations of the technology at the time. What we learned in 2020 served us for years: artists and collectors first needed to appreciate the value prop of L1 before making the conceptual leap to L2. You can’t sell someone on a faster car if they don’t understand why they need a car in the first place.

All of which is to say, we’re all in. We have every reason to believe that the time to move to L2 is now. Rollups have made significant technical progress. They operate in production with billions of dollars at stake. And most importantly, the digital art community is hungry for a new frontier.

Inaction isn’t in our DNA

L2s aren’t perfect:

• It’ll take time for sequencers to fully decentralize

• Bridging presents new security risks

• There are UX challenges to overcome with wallets

But these are all solvable challenges. The risk of doing nothing is far graver. The number of people interested in collecting digital art on L1 is stagnant (and has been for years). Without embracing L2, we’d be forced to accept that the digital art market would remain confined to its current size, which feels like a failure of imagination when L2s exist and continue to evolve at a breakneck pace.

Inaction isn’t in our DNA. We’re committed to growing the space. The decision to expand beyond the restrictive confines of Ethereum L1 is imperative, which is why starting today, Foundation is committed to becoming L2-first.

A commitment to explore the medium fully

L2s challenge us to answer new and interesting questions:

• What were artists and collectors not doing because of high gas costs?

• What does a digital art ecosystem with millions of participants look and feel like? How does it diverge from what we’ve prototyped on L1?

• What sacred truths no longer apply?

We’re committed to answering each of these questions. We’re committed to exploring the medium fully.

Just as early internet pioneers fiddled with modems to log on to an early internet that any modern citizen would find unimaginably slow and limited, so too will future crypto citizens look back at our early days on L1 in a similar light.

L2s open the door to crypto’s broadband era. Today, we pass through it, never to look back. In 2021, crypto wanted to be seen. In 2024, crypto wants to be used.

Thank you to Nat Emodi of Highlight and Jacob Horne of Zora for their help in crafting some of the language laid out in this article. You both have been true pioneers of Ethereum L2.