Art owners, investors and collectors will soon be able to trade shares in fine art for the first time on a unique online marketplace utilizing Blockchain.
The use of distributed ledger technology to recreate the fine art market has come about through the melding of experts in financial technology and art.
With a presence in the U.K., Switzerland and Singapore Maecenas is a new marketplace for fine art investment that uses blockchain technology to revamp what its founders claim to be a market that has largely remained unchanged for more than three hundred years.
A Simple Idea
The use of blockchain has allowed the new firm to create an open platform where owners and investors can meet directly with peace of mind that provenance is guaranteed and documentation for every work of art, is protected by cryptography.
The use of blockchain also dilutes costs allowing the company to charge lower fees to the platform’s users while simultaneously building and managing a liquid market, from which investors and owners can both benefit.
Democratizing Fine Art Ownership
On the Maecenas platform, expensive and illiquid artworks are converted into smaller and more liquid tradable financial units. The platform allows art investors, collectors and owners to trade shares of artworks – very much like they would trade shares of a company.
Maecenas matches art owners with investors and creates an open market where both parties can meet directly, eliminating the need of expensive intermediaries. Investors are charged a 2percent fee per transaction while owners pay 6percent of the listed amount for their piece of art. Auction house fees can be as high as 30 percent.
The firm claims it will democratize access to the art market and lower entry barriers by allowing investors to own shares in pieces of art.
The Art of The Deal
Blockchain technology also enables real time digital settlement of transactions and creates tamper-proof verifiable provenance, bringing transparency.
The Maecenas platform only lists art pieces worth $1 million and above. Currently, only accredited investors can invest through the platform. The minimum investment is $5,000 and at least $50,000 must be deposited in order to open an investor account.
Each piece of art goes through a validation process that involves external independent and trusted third parties. The validation process includes provenance analysis, document validation and physical inspection.
Once the validation process is satisfactorily complete, the piece of art is listed on the platform and investors can bid for it, choosing the amount they want to invest and their desired price.
