Falempin’s comments were made following Tokeny’s announcement it is partnering with blockchain art registry Artory.
Artory will have access to Tokeny’s white label platform, allowing the company to compliantly bring liquidity to the traditionally illiquid art and collectables market.
Artory already uses blockchain technology to tokenise art. Their certified asset tokens are used to wrap artwork into digital financial product offerings, such as funds. Now, the company wants to tokenise art investments at scale.
Art investors using the Artory-branded platform will be able to receive tokens representing ownership in investment vehicles backed by fine art and collectibles. The tokens can then be deposited in a wallet and transferred between investors.
Artory selected the market tokenisation standard ERC3643, previously known as the T-REX protocol, to expand their tokens. ERC3643 is an open-source suite of smart contracts that enables the issuance, management, and transfer of permissioned tokens. More than $28 billion (€24.4 billion) of assets around the world have been tokenised using the protocol.
According to Falempin, a major advantage of the ERC3643 tokenisation standard is that it is not restricted to one trading platform. Historically, the tokenised market for fine art and collectibles has been heavily fragmented with marketplaces operating in silos, making it difficult for investors to trade assets with one another.
Falempin said using the open-source protocol will facilitate greater market liquidity. “Thanks to this standard, the tokenised assets are compatible by default and investors can access many more distributors across multiple marketplaces,” he said.
The total global value of art and collectables, in terms of total available market, is estimated to be worth $1.7 trillion (€1.5 trillion), according to Deloitte. Traditionally, investment in the art market has been limited to the ultra-rich. However, securitisation and technological improvements have made it easier for retail investors to get exposure to the art market without having to purchase and store entire pieces of art.
Art has arguably been a better investment than traditional equities over the past 20 years. The Artprice100 index, a portfolio of the world’s top-selling artists based on auction revenue over the previous five years, shows that blue-chip art has outpaced the S&P 500 since 2000.