Do you remember Banksy’s shredded painting “Girl with a Balloon”, which destroyed itself the moment it was sold for $1.4 million at Sotheby’s? Well, ArtSquare.io does the same thing with artworks, but using Blockchain.
London-based fintech startup ArtSquare.io is using the blockchain’s potential for transparency and democracy to create a free platform for trading tokenised works of art.
On ArtSquare.io, art lovers and crypto holders can buy and trade fractions of real-world contemporary paintings, sculptures, and other collectibles turned into tradable shares, with a minimum investment of €1.
ArtSquare.io relies on the blockchain to open the art market to a new category of users, replacing the high entry barriers to the industry with a new model based on affordability and sharing.
Buying works by masters of contemporary art almost invariably means throwing money at one single object at the time, effectively excluding those groups of buyers who don’t have a six-figure budget or those who are versed in crypto investments, a universe that the art world has tried to keep at a distance and is only recently gaining popularity.
What is more, art buying often comes with the time-consuming and expensive hassle of having to liaise with art galleries or bidding savagely at auctions. Most people don’t even know where to begin in the process of buying an artwork.
ArtSquare.io is set to change all of this by subjecting artworks to a process of asset tokenisation, fractionalising the value of artworks and issuing shares for them (digital art shares) that can be purchased and traded using fiat currencies within the platform’s own stock exchange.
Shares of artworks are tokens that operate on the Blockchain, meaning that they can be securely bought and sold, and that what they represent is immutable, legally valid, and secure.
Together with the tokens of artworks, ArtSquare.io issues a modular smart contract that is set up between the platform’s own body of art experts and the owner of the artwork. The smart contract contains the terms and conditions of ownership of tokens of the artwork, including any special benefits for the top art investors in our community—those who own the greatest number of digital art shares for an artwork.
“Buying and trading a fraction of an artwork is a sort of a mental exercise. You’re not purchasing an actual piece of the object or a percentage of its surface but are investing (financially and emotionally) in a fraction of its value”
says Fabrizio D’Aloia, CEO and Co-founder of ArtSquare.io.
The platform is on a mission to build a community of art lovers and retail investors who understand the benefits of such a Blockchain-based process of democratisation of the art market, including the value of art as an asset in a well-diversified portfolio.
The user in ArtSquare.io is a co-investor of art: they can buy digital art shares of artworks during a live listing and then trade them with the rest of the community on the ArtSquare exchange, the platform’s own secondary market. Artworks on ArtSquare.io are accompanied by traditional legal documentation, such as its authenticity certificate and provenance record, provided by the platform’s art experts partners.
In this way, art investors are not only made aware of what they are buying but also encouraged to learn about and get to know the object in which they are co-investors.
The new model of enjoying the art market promoted by the platform is primarily about sharing, smart trading, and anticipating the future.
D’Aloia is confident that
“In fifty years only fractionalised and listed artworks will be perceived as good assets in an investment portfolio. Moreover, when followed by around-the-clock trading, the digital listing of artwork is able to replace discontinuous processes of price formation that holds the art market hostage (and ensuing liquidity gaps and obstacles of divestment) with an uninterrupted flow of supply and demand. What’s even more interesting is that unlike what happens now, these processes will be finally entrusted to the informed decisions of the community and not to a few elite marketplaces.”
Executive Director and Co-Founder Francesco Boni Guinicelli (included in the 2018 list of Forbes’ 30 Under 30 in the Venture Capital section) thinks of ArtSquare.io as a “tool for traditional market players to expand their demographic and reach millennial, retail investors, and crypto holders as well as other categories who are looking to diversify their portfolio by investing part of their capital in art.”
On October 31st ArtSquare presented the Beta version of its platform (available on desktop and mobile) and launched the live listing of its first listed artwork, Andy Wahrol’s Kiku, during an event sponsored by Italia4Blockchain and OGR Tech in Turin.
The event drew the attention of experts in the blockchain and crypto sector as well as lovers of art who stormed to the city for Artissima, Italy’s most important international fair for contemporary art. The 1984 screenprint by Pop Art genius is making headlines as the first in history to be entirely tokenised and available to buy in fractions for its full value (€28,000).
With ArtSquare.io, users can compete to buy their way to the top of the Art Investors scoreboard, become the artwork’s majority shareholder and bring it home for six months. The new art market is here, and blockchain is making it happen.
