In a first-of-its-kind, a painting of Andy Warhol has been tokenised and sold on the blockchain, signalling the first step in democratising access to the art market.
Warhol’s 14 Small Electric Chairs painting was sold to qualified participants on Maecenas, an art investment platform built on the blockchain. The auction attracted more than 800 sign-ups within weeks, exceeding the expected number. The tokenisation of Warhol’s painting was also aided in partnership with London-based Dadiani Syndicate, a fine art gallery.
The auction started on Wednesday, 25 July 2018, and closed after four weeks, two weeks ahead of schedule.
Last year, it was reported that Maecenas was a new marketplace for fine art investment. What makes it different, though, is that the founders are using the blockchain to revamp a market that they say has remained unchanged for over 300 years.
Focusing on masterpieces and proven successful artists, Maecenas is lowering entry barriers by widening the scope of who can participate and own fine art. The move to tokenise Warhol’s painting marks an historic moment, and according to Marcelo García Casil, CEO of Maecenas, this marks the start of “an era in which tokenisation of assets is something real and not hypothetical.”
“As a company, Maecenas now has a working platform processing real money transactions and handling real assets, which is incredibly exciting,” Casil added speaking to CoinJournal. “This is the first step in our journey to democratise access to the art market. From this position, we will grow and expand our ecosystem to reach out to the whole crypto community.”
The auction raised $1.7 million for 31.5 per cent of the artwork at a valuation of $5.6 million. The objective was to sell at least 25 per cent of the painting and reach the reserve price. However, according to Casil, the goal of the first auction was not to raise as much money as possible, but to validate and prove that the tokenisation process is sound and that artwork in the range of $5-6 million can be sold through smart contracts on the Ethereum platform.
“We still have a long journey ahead of us, but I can see shared ownership of fine art becoming more popular, and people’s relationship with art evolving for the better,” he said. “This is a market that so far has excluded the masses, and we’re now widening the scope of who can participate and own fine art.”
This, in turn, he adds makes people more engaged and interested in experiencing art.
Maecenas tokenised 14 Small Electric Chairs by converting it into tamper-proof digital certificates or “fractions” based on the Ethereum network. Buyers then purchased fractions of the painting with Bitcoin, Ether or the ART token, a cryptocurrency created for Maecenas. The highest bid in the auction was $6.5 million and more than six million ART tokens were used.
Using Warhol’s painting to tokenise it on the blockchain was the strongest statement that Maecenas and Dadiani Syndicate could make. Moving on from that Casil said that they have “works from blue chip artists that we will be listing on the platform in the coming months.”
The Maecenas blockchain means that buyers can access artworks that have been verified and are stored securely. Casil states that “authenticity and trust are quintessential to the art market” and that “the use of hashes and cryptography to ensure documents are not tampered with is very much needed in the art world.”
Believing that the use of the blockchain is bound to become a de-factor requirement for any art transaction, Casil also mentioned to CoinJournal that the platform is working at launching their own exchange so that investors can trade their art tokens with each other.