How is AI reshaping NFT and digital art?

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, image, and video are becoming the virtual paintbrush of human creativity.

And the convergence of AI and Web3 is revolutionizing digital art and NFT, opening up new possibilities for 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 NFT?

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

Botto, a generative AI art project managed 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 generating 350 drafts, also known as "shards," each week, and the DAO community votes on their favorite "shards" to be minted each week and sold on SuperRare. Botto generates revenue through weekly art sales, royalties from secondary transactions, and sales of project collections. Proceeds are distributed within the community in accordance with $BOTTO's revenue distribution methodology to reward the community for participating in the growth and evolution of the project. To date, Botto has generated over 944 ETH of revenue and 1,264 ETH of total sales.

Bicasso, a new AI art tool developed by Binance and recently launched to users, offers a new way to create images and cast them as NFTs. bicasso draws inspiration from popular AI art programs such as Midjourney and DALL-E, enabling users to generate images by entering text or uploading existing images to iterate. What sets Bicasso apart is that it seamlessly integrates with Binance's BNB Chain, allowing these AI-generated images to be minted directly on the chain as NFTs. Further demonstrating users' enthusiasm for this innovative approach to creating art.

Alethea AI is also making waves in the Web3+AI space, developing a decentralized protocol that allows users to generate and create interactive and intelligent NFTs (iNFTs) based on linguistic descriptions using a multi-modal AI system. alethea AI is opening up a whole new world of digital assets. With $31 million raised to date, the team is working to redefine storytelling and interactivity in the metaverse, enabling creators to develop unique and engaging experiences for users while increasing interest in NFT as a medium for artistic expression. However, adoption of Alethea AI is relatively small compared to other platforms, with only 1,402 active wallets per day, 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 streamlines the game development process, but also preserves the individual artist's voice and ensures that their creative vision is not diluted by generic AI tools. After announcing the closing of 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 the waitlist. Pricing for use of the tool will be based on usage, starting at $20 per month, with plans to offer the service to a higher number of customers. Their mission is to unlock the opportunities that AI brings to the games industry: exponential growth in production, a dramatic reduction in workload, and a completely unrestricted creativity of AI collaborative artists.

Mirror World is changing the GameFi landscape by using AI-powered NFT as an asset for 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 use player favorite characters to create 'Web3's Nintendo'." The company recently raised a $4 million seed round of funding from Galaxy Interactive and Republic Crypto, as well as many other investors. mirror World plans to use this round to accelerate the launch of its first three games - ARPG (Action Mirror World's overall NFT trading volume is hovering at 179.75 ETH and has struggled to scale since 2022. The goal is to bring a better gaming experience to players while promoting more sustainable economics and a "well-framed" economic system. The ultimate goal is an open, autonomous, sustainable and interoperable gaming 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 avatars for Web3 games and metaverse. FIFA recently launched the beta version of its "World Cup AI League," a mobile strategy game powered by ASM that uses AI to create its characters and game components, Delphi Digital, Outlier Ventures, and Flamingo DAO, among other top investors, to raise an $11 million seed round.

While AI-driven projects and use cases in the NFT space are still in their early stages, their impact extends far beyond current applications, setting the stage for future innovation. AI-generated content platforms, decentralized AI protocols, community-driven art auctions, and interoperable gaming assets each offer unique opportunities for growth and advancement in the digital art and gaming space.

While the 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 NFT raises questions about the ownership of creative output, the potential for plagiarism, and the manipulation of AI-generated content. Recent allegations against companies such as Stability AI and Midjourney for alleged copyright infringement during the training of their algorithms have only heightened concerns. Addressing these issues will require collaboration between technologists, policymakers, and the broader community to develop ethical guidelines that strike a balance between innovation and accountability.

As AI and NFT continue to converge, they will undoubtedly reshape areas such as digital art and gaming, opening up new possibilities and inspiring further exploration of the dynamic and evolving world of Web3.