How can physical artwork become an NFT? A new company has spent $ 12.9 million on Banksy trying new ways to transform reality into virtual.
Important reason: The art market has an annual trading volume of about $ 60 billion worldwide, almost all of which is the trading of objects. Art insiders, including former Christie’s c0 chair Loic Gooser, are looking for ways to monetize their physical paintings without necessarily relinquishing their physical ownership.
News promotion: Gouser said he spent $ 12.9 million on Sotheby’s in May to buy an estimated $ 3 to $ 5 million in Banksy paintings. He is currently exhibiting his work at Art Basel Miami Beach with the support of Particle, a company that intends to turn his work “within the comprehensive structure of collective ownership” into 10,000 NFTs.
Reality check: NFT owners do not have significant collective ownership of physical paintings. To do so, Particle must be registered as a securities issuer.
- Particle claims to have “chosen to legally destroy” the work by donating it to a non-profit organization called the Particle Foundation, which promised to never sell the work. However, there is no legal destruction.
Yes, but: As Particle Managing Director Harold Eitan told Axios, “NFTs are changing the way people recognize ownership.” NFT’s global value drivers are not based on contract law, but on community and consensus.As long as there are enough people believe The fact that they intend to own part of Banksy allows them to trade with that belief.
Line spacing: The Cryptographic Revolution is based on Satoshi Nakamoto’s successful method of creating a cryptographic method that guarantees that a given token will never be used twice.
- That intuition pervades the world of NFTs, and Eytan states that “value cannot exist in two places.” If he wants to create digital value, he needs a credible claim that physical painting has lost similar value.
- An aspect of the NFT community also comes from the Foundation, which seeks to build a certain level of enthusiasm around a collection that exhibits works and can compete with boring apes and the like.
Big picture: Gouzer told Axios that the value of an NFT has something to do with the amount he paid for the artwork, but many other factors, such as the strength of the community and how to invest money. use.
- Particle will sell NFTs at a price that will recover the cost of the painting. After that, every time the NFT changes, you will benefit from resale royalties.
Be wise: Museums can do something similar In their permanent collection, Gouzer predicts that the amount raised will only partially depend on the monetary value of the work in question, says Gouzer.
- “If MoMA wants to build a new wing with such sales revenue,” he says, the crypto community may return “less value” to its NFT than they have a collection close to their hearts. “.
Conclusion: Gouser made a very visibly overpayment to Banksy, with a move that only helped to improve the status of the work as a meme compared to that estimate. However, it is not yet known if that is enough to generate more than $ 13 million in demand for derivative NFTs.