Art has so far (and still in the present) has been a very costly affair. Only those Art Connoisseurs, curators & collectors who have the financial backing have been able to afford the artworks.
Tokenizing an Art means that the art's cost of ownership is ascertained, the rights to own it is digitized into multiple tokens and sold to the interested buyers. Since each token is backed by Art's value and right to ownership, it implies that you own a portion of the art for that particular value. Art asset-backed tokens have a ceiling limit as to how much units of tokens they can sell, so the quantity is limited and the value increases over time without getting diluted.
The primary advantage of tokenizing an artwork is that it lowers the entry barrier for everyone who might be interested in purchasing the artwork but may not have the funds to purchase the artwork. The concept of Tokenized art allows a group of individuals to collectively invest in the artwork by purchasing few of the tokens that are equated to a certain value. The holders of these tokens can trade(Buy or sell) the tokens in asset exchanges that support them to make profits.
Any artwork can be tokenized using an Art Tokenizing platform. In a few steps, they can create art backed tokens easily.
Why is art tokenization important to the Artists and everyone in general?
The art world is tightly controlled by certain groups that determine the pricing of an artwork, and it suffers the same fate as many cottage industries that get shadowed by monopoly and middlemen (Art dealers).
To understand this, you'd need to know how an Artwork is priced before it reaches a gallery.
The price of an artwork is influenced by certain factors like the size of the artwork, reputation of the artist, the reputation of the art dealer, the medium etc. In a regular scenario, the art dealer buys out the art from the artist and based on his reputation, establishes a price bracket to price the artwork. The gallery which displays these works operate on two main business models, It either buys out the artwork directly from the dealer, displays it or works with the art dealer on a Profit sharing model.
Model 1: Directly buying the artwork, makes sense when the artwork is negotiable and the art dealer wants to let go of the artwork or the artwork is bought in more quantities. The gallery would then store the artwork or loan it to other galleries or exhibit to increase the value of the artwork (Just like how advertising works, the more you see it. The more you become familiar, which is directly proportional to the value of the artwork increasing.)
Model 2: Profit sharing model, for artworks that are created by reputed artists and are backed by reputed art dealers, the gallery operates in this model where the auctions are held in a profit-sharing basis when the art is sold. If there was no sale, to absorb any loss, the gallery may take a minimum guarantee before the auction or exhibition event.
Eitherways, mostly the dealer and the gallery stand to make more profit than the artist. As the artists only get a portion of the profit made or if they've sold the artwork outright, they may have sold it for a lesser price.
Tokenizing the artwork allows an artist to potentially thrive without depending on multiple layers of middlemen or they can directly choose to work with tokenization platforms to tokenize their artwork. This ensures that their work is recognized, the actual value is evaluated transparently and the artist gets the maximum benefit. Art tokens can potentially change the lives of artists who can then focus on creating more works that they can sell directly to customers, without the fear of running out of funds.
How does art tokenization work?
The first step to creating a tokenized art involves converting them to art tokens that can be tradeable on the compatible exchange platforms.
Before the art tokens can be created and distributed, there are certain precautions, compliance checks that have to be carried out.
Compliance and undertaking:
Before creating the art tokens, the compliance agency checks the authenticity of the artwork (for already created artwork), does a background check on the artist and an undertaking letter that the artist is responsible for its completion and other liabilities (In case the artist is raising crowdfund for the artwork they are yet to create.)
Partnering with a platform:
Often it would be easier for the artists to partner with a platform that they can work with to carry out all the legal formalities, hold the escrow for the artwork and take care of the miscellaneous formalities required before the art tokenization
To tokenize the Artwork, an art tokenization platform or an art token development company is used, where all the necessary formalities are filled out and then the tokens are created with the smart contract and transferred to the artist who would their artwork tokenized.
Once the tokens are created, a reputed escrow agency is set up to handle the future transactions, track the milestones to release the payments in a timely manner to safeguard the investments of the investors and to ensure a smooth payment process between the artist and the investors.
Listing on a Tokenized art asset Exchange
Before listing the art tokens, the exchange carries out a check for all the necessary compliance and the details about the escrow. Once the exchange approves the art token, it is listed for trading. Anyone can buy/sell or HODL them.
What are the features of the Art Tokenization platform?
The Art tokenization platform offers the ability to create, market and distribute your tokens to interested investors. The smart and thoughtful features that have been built into it allows you to conduct a Security Token offering or an Initial Token offering easily. Some of the features
Accept payments using Stripe, Paypal, Bank Transfer, Bitcoins, and Altcoins.
Send tokens easily to those who have paid for the tokens right from the dashboard. All the data with the proof is received from the user and displayed here for you to verify easily.
Custom Token price change event:
Set the price to automatically change at a pre-defined time. The new price will take effect till the next price change event. You have the option to notify your users before the date too.
Send email campaigns and SMS campaigns to people who have purchased your tokens, to those who haven't or both. Notify users of new events, Show them the progress of your STO related events
Send Now or Schedule it later. Leaving somewhere? Just save and Pick up where you left from the drafts.
Track Campaign performance:
Right from your dashboard, you can track the individual campaign's performance easily, see if a user has received, opened, unsubscribed from the campaign. Campaign Bounce has been handled as well. If a user unsubscribes, they won't receive campaigns any further, this reduces your spam rate.
Company's Income / Expense Tracking:
Built-in Income and expense tracker allows you to create income-expense reports right from the dashboard and display it to your investors to garner trust.
Dividend Payment Configurator:
Configure dividend payment cycles, half yearly or every quarter. Set the ex-dividend date, cum-dividend trading period and the percentage you will be paying your users. The system automatically calculates the amount you will have to pay and displays it in your admin panel at every interval set.
Making your STO truly compliant with government regulations, now you can notify your users of the dividends you have paid them. All from your dashboard.
You can now display a mandated GDPR message to the user on the site. Set it on the dashboard.
Thanks for reading our Content. To know more about our Services, kindly Visit our Website: