Art investors, collectors and owners will be able to trade shares in fine art for the first time on a unique online marketplace powered by blockchain technology.
Maecenas is a new platform that will match art owners with investors, creating a fair and open market, reducing costs and bringing transparency to a traditionally opaque world. It will also allow any investor to have a fractional share of a masterpiece.
Its creators are using blockchain technology to create an open exchange where works of art valued at more than $1 million can be traded in real time as liquid financial units.
Through the use of cryptography, blockchain will enable transactions using digital ledgers that provide transparency, trust and security – aspects of the art market that have long been missing but are now finally possible.
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Expensive and illiquid artworks can be now be converted into smaller and more liquid tradable financial units, very much like shares of a company, which could then be traded frequently through an open exchange. Portfolio managers could then price their positions more accurately, and could diversify their risk by investing in a range of different art assets as opposed to having their funds concentrated in a handful of pieces which can be hard to sell.
Co-founder and CEO Marcelo Garcia Casil is CEO of DXMarkets, a start-up company building blockchain-based products for the financial services industry in areas covering capital markets, investment, payments and digital identity.
He said: “We want to create a fair and open marketplace where investors and art owners can meet without intermediaries. We are using technology to revolutionise the art finance market, reducing costs, introducing transparency and creating liquidity. We are creating a new way to invest in fine art. Our ambition is to make the art industry a better place for everyone.”
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“It is time for art to be become a first-class citizen within capital markets, and to have rich market data feeds, order books, indices and even derivative markets. A blockchain-enabled marketplace can make it happen.”
Investors will be charged a fee of just 2% per transaction while owners pay 6% of the listed amount for their piece of art – this compares with auction house fees of up to 30%. Its founders believe the fine art market has been largely unchanged for more than 300 years and is ripe for disruption, with increasing interest in art as an alternative investment.
It will democratise access to the art market, allowing investors to own shares in a wide range of high-value pieces of art, creating a diverse portfolio which they can adjust whenever they want. Meanwhile, art owners, collectors and galleries will have much cheaper access to capital, allowing them to raise finance without losing ownership of their asset as they can only list up to 49% of its value.
Maecenas is the brainchild of experts in financial technology and the art world who are bringing their skills together to create an innovative art-tech business. Its four guiding principles are:
– Creating an open platform where owners and investors can meet directly.
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– Giving peace of mind by guaranteeing provenance documentation for every work of art, protected by cryptography.
– Bringing transparency to the art market by listing professionally vetted works of art and providing historical price guides so they can be accurately benchmarked.
– Reducing costs by charging low fees to the platform’s users while simultaneously building and managing a liquid market, from which investors and owners can both benefit.
The platform, which is currently crowdfunding, is targeting sophisticated investors who want to have art in their portfolio – a category that includes 88% of family offices, 75% of high net worth and ultra-high net worth individuals and 64% of banks, according to recent research. Investors must put in a minimum investment of $5,000 to part-own a piece of art listed on the platform and pay an initial deposit of $50,000 to open an investor account.
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