Late last year, Pepe the Frog creator Matt Furie decided to hold an NFT auction, offering an image of the ambiguous character that featured him waist-deep in a pool with his buttocks peeking out over the surface of the water.
Pepe the Frog appeared in the early noughties in an independent comic book called “Boy’s Club” by California artist Matt Furey. The series about the company of “stoned animals” first came out as hand-printed black-and-white zines (“Zines” is an amateur small-circulation independent publication), and later – in full-color collections of the main independent publisher of comics in the USA Fantagraphics.
In the midst of the U.S. presidential election campaign, Pepe became the subject of a scandal that would have been unimaginable before: the image of the frog was used in their campaigns by right-wing radicals who supported Donald Trump.
To be able to monetize his art, Matt Fury formed a decentralized autonomous organization (DAO) called PegzDAO, which in October 2021 put one of the frog artworks as an NFT token up for auction. Before the auction began, the artist promised that the 99 remaining NFTs would never go up for sale. According to him, they were created “to emphasize the rarity of the main NFT art”.
At the end of the auction, the image went to collector Halston Thayer, who paid 150 ETH (approximately $537,000 at the current exchange rate at the time) for the purchase.
Halston Thayer, in his words, “was thrilled with his unique purchase”. Until a couple of weeks later, PegzDAO gave away 46 of these other 99 NFTs, which, remember, are exactly the same image as the one Thayer paid half a million dollars for, for free.
A lawsuit filed by buyer Rob Freund’s attorney against Matt Fury and related companies notes that the free release “significantly depreciated the plaintiff’s Pepe NFT to less than $30,000.”
Everything about this story is perfect. Both the image itself, the price for it, its “uniqueness,” and the subsequent lawsuit, the core of which is not the very paradox of the situation and the breach of contract, but the “depreciation” of the NFT.