How One NFT Project Is ‘Blurring The Lines’ Between Artwork And Assets

Non-fungible tokens (NFTs) can be used to represent almost anything—and while to date, they’ve mostly been associated with digital artwork, there’s no reason that they can’t be used to represent physical objects.

Now, an NFT project based in Malta is testing the boundaries of what’s possible with these unique digital tokens, with an NFT representing a bundle of digital and physical assets—and tackling head-on the thorny question of what legal rights ownership of an NFT confers on the holder.

ETH in Mellieħa consists of an NFT representing a painting by local artist Debbie Bonello, depicting a street scene in the Maltese village of Mellieħa. After being digitized, the original artwork was destroyed in a clifftop ceremony—meaning that the NFT is the only visual record of it.

But it’s what’s depicted in the painting that distinguishes this NFT: grabbing the eye immediately is a car in the foreground, sporting the number plate “ETH”. And that number plate is an integral part of the NFT; alongside the artwork, the NFT confers ownership of the ETH number plate seen in the painting—a process that proved surprisingly complex, as the project’s pseudonymous creator mlh.eth told Decrypt.

Legal eagles

While there have been sales of NFTs that purport to confer legal ownership of an item on the holder before, the actual legalities are rather more unclear, mlh.eth explained. In many cases, the NFT is simply bundled alongside an item that’s being sold, and has no legal status to speak of.

Instead, the ETH in Mellieħa team wanted to ensure that the NFT and the legal right of ownership were indisputably linked. “We don’t want this to be a gimmicky thing,” he said. “We really wanted it to be, there’s no getting out of the fact that the NFT will always be associated with the plate.”

To that end, the team engaged leading Maltese law firm Mamo to work with Transport Malta, drafting terms and conditions that would clearly establish that ownership of the NFT is tied to the ETH number plate. “We are setting a precedent for NFTs with underlying assets in Malta,” mlh.eth said. In future, he added, “lawyers will be much more comfortable taking on a task such as this.”

The art of the matter

For all the legal and technical challenges involved in creating the ETH in Mellieħa NFT, creating the artwork itself was more straightforward; Bonello told Decrypt that she “decided to just tackle it as a normal commission.”

“I had no idea what an ETH project was,” she told Decrypt. After researching NFTs, she added, “I thought it exciting and felt also honored to have the possibility of being involved in such a different project from the norm.”

Destroying the physical artwork wasn’t originally part of the plan, mlh.eth told Decrypt. “I called Debbie the moment we decided we’re gonna burn it,” he said. ” I told her, for this to be really unique, we cannot have an original piece sitting somewhere. It would take away the uniqueness of the NFT—and so we have to destroy it.”

“I don’t think it would’ve been her first choice,” mlh.eth conceded. But, he said, “I think she was very game, honestly.”

For her part, Bonello told Decrypt, “I was totally okay with it.” Although the physical painting was burned, she pointed out, “the image stays forever in the blockchain, so really and truly it was the same as selling a painting to a client; it’s no longer mine, but it hangs on someone else’s wall. This is how I explain it to myself!”

The whole package

So is ETH in Mellieħa a painting? A legal contract? An NFT? Or a physical asset? The artwork, its creators argue, consists of all three elements together. The inclusion of the ETH numberplate, said Bonello, “almost bridges the physical world to the more abstract one.”

“That’s how the concept came about,” explained mlh.eth. “Gradually, we wanted to blur some lines and then wanted to blur more lines, and then it became a whole story.”

The auction consists of “the whole package,” said mlh.eth. “The art comes from combining the whole experience.” That experience includes, alongside the NFT itself, a short documentary and nearly 400 photos of the creative process that will be gradually released over the coming months.