Bringing the $2 Trillion Art Asset Class to Web3

Transcript

take it away thank you Jennifer hey guys the boat is coming any moment everybody's going to the board party yeah I think so so uh I think the clicker is almost working but not quite please work and in the meantime we're going to take a beautiful picture thank you um I see it's it it worked too well okay it's a little bit of a loose Clicker loose clicker and guys don't worry cuz uh um a bunch of us are getting in the boat you won't miss the boat uh the boat's actually been slightly postponed because everything's running late so don't worry about it awesome thank you so uh so this is what this talk is about is about bring

bringing the2 trillion dollar asset class to web 3 we just talked about tokenization fractionalization you know $2 trillion is a big number probably bigger than you thought the that asset class was you probably who knows how big is the treasuries asset class us treasuries it's got to be on everybody's mind at the moment it's like it's like 30 trillion 30 trillion art is a$2 trillion asset class much bigger than most of the people think and this is not art that's in museums right this is only art that is potentially tradeable this is Art in private collectors in private collections this is art that can theoretically be in the open market now it's not a very liquid Market because

every time you trade art the cost of transaction is very high and you know each transaction is pretty high value transaction right so it's about a million dollar piece of art so the question is how to make it more liquid how to make it more democratic how to make make sure that more people participate how to move this two trillion asset class to web 3 and that's really sort of the big question I'll show you how we have been doing it already and uh you know I think this is one of those rwa real world use cases that is going to be among the first ones to take off so when we talk about uh moving this asset class to web 3 what's needed is some kind of a platform that does it so uh it's not just tokenization I think I I want to be make sure that

it's very very clear right all the previous panel was about tokenization fractionalization that's part of it that's not the only way to do it so there is this blue chip Fine Art asset class two2 trillion dollar worth of potentially tradable art sitting on the left on the right is this crypto Community millions of collectors investors speculators Traders not all of these people are art collectors obviously right the majority are investors speculators and Traders and yet right they still buying art already in the crypto sphere they're buying meme meme coins and meme art they're buying nfts they're buying ordinals they're buying runes they're buying all that stuff so the question is how to get them to buy that blue chip fine art that is packaged in some way in a way that makes sense to them appeals to them be that if

they collectors investors speculators or Traders so uh there are so far four ways that we have devised and have introduced well we've introduced three of those and the fourth is on the way the first one is just basically when you trade art physically make sure that all the prominence is in the blockchain which means that well you're moving at least to use case of trading art to the blockchain that's one we did that a couple years ago and it's been running ever since with millions of actually tens of millions of art artworks traded in this way the second one the web 3 studio is all about taking it's kind of like a launch pad for famous artist artists so any artist who is say $200 million in market cap or more which is how much art they have sold well it's

current market value uh any artist like this right because there are basically the market is very concentrated so about 90% of the total tradeable art today is the top 200 artists so really obviously that's where you would start right you wouldn't start with the bottom 10% you would start with the top 90 so those top 200 artists with very very high market cap uh would like to get to three because they want to get to introduced to new audiences they want new monetization opportunities and so on but of course they don't know how so figuring out how is moving that part that slice of the market to web three audiences then of course there is tokenization fractionalization needs no introduction there was a whole panel

about that immediately prior to that and then there are defi products so once you have lots of lots of these little pieces of art be that nfts or ordinals or fractions you can start packaging them up into indices into into funds into ETFs you know make make sure that you can be you can not just spot trade them but also derivative trading options perpetuals Futures all that zoo that has already been created in web 3 can suddenly uh be accessible for web three audiences for this asset class so this is basically what we've been doing we've been funded by binance uh animoca Brands hash key okx Co coin gate all the big guys to basically do this right to bring this uh asset class into into web 3 in

this methodical way so one thing that I hasn't haven't mentioned that is uh clearly also very important to be able to do that is access to those top artists so all of us come are not just Crypton natives since you know 2016 2017 but also uh have worked or in my case sold a company to the big art guys the big Arts like the big tobacco you know there's a big art Christies sades those kinds of guys so I sold the company to Christies as Jennifer mentioned in her introduction so we have access to all of these big artists who already want to get to web 3 in various ways and we have also built this product for you know every asset class needs uh data so we we've built what is now the market

leading product for providing Market data to the Art Market so if you go into any Auction House anywhere in the world you will see people on the live art app checking prices and that's because it's not just uh it's not just like the most comprehensive cover coverage of any any art piece that has ever sold in the world but it's also the current market value of every piece its indices for every artist of for every in in in every way that you can measure this asset class and then on the right here is the way to package up this product for web three audiences be that through the nftc art studio right which is nfts by famous artist or through the art fractionalization Tech that takes physical paintings and then tokenizes

and fractionalize them so methodically moving this uh this this asset class from Legacy to web 3 so uh you know the traction so far is that we've done about $34 Million worth of such things uh we've built a community of about 1.2 million who is buying uh you know little pieces of art about $1,000 pieces half an e or so is the sweet spot for for this community that we have built and we have built this Market leading Tech that is the data provider for the art World both the Legacy art world and the web three art world so let me show you a couple of case studies of how this all comes together so that it's not as abstract as it has been so far so here is one artist

his name is y Jun he's one of the biggest contemporary artists out there right so if you know in Asia he's a rock star around the world not he's a rockstar everywhere really all the major museums in the world collect his artworks you can see they got sold at sbas Christies at you know $7 million mil big big big artists about I would estimate $250 million market cap so that's the total market value of everything that he's ever sold at auction he has sold 150 million probably another 100 million privately so about $250 million market cap so big artist half a billion dollar artist never done anything digital so the question is for an artist like this that's a kind of a big chunk of this asset class how do we

move him into web 3 well uh you start by quantifying the artist so this is in fact the artist Index right that's the market cap for this artist how it changes and how it changes currently uh what is the market momentum right is the artist's price going up or down uh for each individual kind of comparable artwork that you're trying to either tokenize or create uh an nft related to you know you see how its price CH price has been changing and what are the comparable comparable artworks so to go through that sort of analysis first before you start publishing the digital asset that somehow is related to the SST Market or represents a physical painting

in it so that's one the second is uh you choose where to put it and there was a discussion here immediately prior to this about which chain to use different artists want different chains different artists belong in different chains an artist of this caliber would be either ethereum or ordinal so basically Bitcoin why because they seek permanence right for an artist from from his perspective Ive it's like he's used to putting his uh artworks in museums he expects that artworks his artworks will outlive him so it has to be something permanent the only two things that are perceived as permanent today are Bitcoin and uh sometimes ethereum but there are other artists who don't care right and

so there are also fractions you can put in other chains that are faster cheaper and so on but for an artist of this caliber Bitcoin so in this case we actually put him on uh we made an ordinal project out of it so it looks some like this it's there are 1,00 generative artworks that we have created and I will show you how we combine the web 3 sensibility and the Legacy uh sort of sensibility of this artist you can uh it's now magic hidden in case anybody's interested in checking it out so uh what we did is we created a few kind of iconic themes iconic art history themes so you can see this character which is this smiling character which is IC everybody has seen it everybody knows it but put now in different scenarios in

different art historical uh contexts you know everybody has seen the all the star night and the wave like all these things are well known to even the beginner collector right so they are like almost almost like memes in fact I talked to the memcon which is a meme conference about this exact collection in Lisbon last week and so from their perspective from the perspective of meme art collectors this is is mem art but it doesn't matter it's still a way to bring this artist into web 3 so there is Iconic art history there are iconic places there is iconic pop culture references there is Iconic Bitcoin memes right which are familiar to all of you uh basically a way to make this art

relevant to the audience the audience being web 3 the art being is a very established artist with a very iconic uh sort of imagery so it was a 1.8 million Edition so it's 12,000 sorry 12,00 works at about 0.022 BTC each and so that's sort of almost a $2 million Edition and it's not the first time we did it with this particular artist with most artists we do it multiple times and then uh in the process of doing that we build a distribution Channel which is partially retail and partially not retail so it's a wholesale which in this case SES uh I think it was last week Lot number one of the ordinal sale was in fact the Genesis

ordinal of this collection sold at about what is it 30 30% over the over the high estimate so that's uh kind of an example of what we do and then what we do next right once we have this uh collection collector audience for every artist that we introduce we start saying all right what else you interested in in this case uh we created a print series which was um basically every whole older of the nft that is an nft from a previous collection by the same artist or an ordinal can get a print and here you know you can see Twitter is a bz about with people uh uh unboxing videos of those prints that they got and put on

the wall that represents the nfts the digital uh representations of the artworks that they have purchased there are about 1.2 million collectors currently that are in this network that are sort of looking for artists of this caliber to land on their well in this case desk in other case the digital device we've done that for many many artists there are about 200 million uh of artist pipeline that is currently kind of we we're putting through the same uh Channel and as you can see every time we do it we work with a lot of communities right so it's not just about creating super high quality uh kind of art product that is both uh web 2 and web 3 on on the intersection of the two

but it's also the distribution so you see here on the on the right is the distribution through all the communities that are buying other nfts through sades and Christies through many other channels that we currently use so that's case number one right so that's sort of uh how you can launch really famous artists into web 3 and suddenly this Legacy asset class becomes a crypto asset class another way to do it is of course tokenization I won't talk much about it because it's been talked about a lot at this conference but it's the same idea we haven't done this particular painting so this is just an illustration but just an illustration of how it's done with the same audience and with the same methodology so here you can see this artwork being you know presented as an asset class so it's

Quantified you can see what the price trends have been the momentum uh for the last 12 months the artist index for the last 10 years the comparables how the comparables kind of relate to the overall price appreciation of this particular asset class all of that is automatically generated from this data source that I talked about before and then there is an offer right so this is what the uh total sale the reserve price and the current estimate so you're buying it below estimate so it's a good price that's the implication and how the estim expected returns compared to the returns of other asset classes that you may be interested in so that's how it's presented and then uh and then it's fractionalized right so it's tokenized and it's fractionalized there are

different kind of gamified ways of how we fractionalize it nfts which are then uh which you can then do things with to stimulate secondary market trading right so things like you can select the nfts the fractions the pieces that uh that have adjacent positions so you can own a piece of the painting that is larger than individual an individual piece or like pieces of the same color or pie or kind of make a pattern within the artworks there are different ways to gamify it why why bother to do that well to stimulate s secondary trading the more this fraction trade you know the better the liquidity and the more secondary market products and derivative products you can and funds and indices and other things that you can put on top of it so that's um basically the story

that I wanted to portray right there is a giant2 trillion dollar asset class here there is a whole bunch of people who already buying art digitally here in our case 1.2 million but there are probably about 2 or 3 million total currently and that number is growing the question is how to move this asset class from here to here and what are the different techniques that you can use so if you're interested in this topic please follow us on I believe that's X Twitter it's our website telegram Discord you know you know where to go thanks very much thank you so much uh um Boris um I just wanted to um see quickly if there are any questions I actually have one for you all right um and uh uh for those

of you who don't know um what what actually I want to bring your attention back to the communities um it looks like we have 47 seconds left um the there's a Community slide so I'm actually one of the first advisers and investors to the paju Penguins project um also uh I'm a private investor in Anoka and also oh sorry that's why I went back to get it this is a nazuki I have like 18 so I I think all of them are there yeah all of them are there so basically all you guys who are Apes Doodles I have all those who are on the audience um my question is this um and one of the reason I brought you this um identities one a lot of us collect nfts as well as art as well as you know jewelry fine luxury goods as an expression of ourselves um

does the Art Go Up in value if it's a newer artist undiscovered or if it's a dead artist because actually some of the artists that I was looking at today um some of them passed away recently and then the art value shot up and we also know with Picasso um in the city he actually traded in one of his paintings for a drink which I think was very provocative so that was my question for you well I think you answered it the the the highest price appreciation as set as it is to say is of an artist who just died okay cuz the supply is now capped all right so um I didn't mean to answer it I I know it's sort of macra no this is the last the I believe it's the last event of the conference this is

the last we have to we have to we have to we have to end it on a happy note we have to end on a happy note so um actually um enough about the dead artists we don't want to talk about dead artists um there are also live artists and other artists um there a live art one of the reasons why I sent you um actually I didn't send it to you yet um but I did uh the first piano performances on ethereum and I'd love to collaborate with you um let me see uh this is me playing in France uh on the piano but we are the last uh panel um the last keynote for so who wants to be the last question yeah last question the last question of the last panel last question it's a pretty basic question yeah talking to terization hear you

Imes which are created digitally no issue but in the situation where you have a piece of artwork you are digitizing that tokenizing that going back to some of the points by the prev in terms of the enforcement or legitimacy or the ability to maintain value in the token that you have so you've got one of the examp IM kind of components of that how do you stop reproduction how does the token holder know that there won't be reproduction multiple times of that same piece of artwork of the um in which case in the case of tokenization or in the case when

tokenization tokenization so you're talking about Provence or counter that have that or you have a a component nft of that yeah and you think okay you pay x million and you have that it's great again how does that stop someone else froming the same thing because it's just a visual representation well it's it's an nft it's it's that don't not nft is non fungible by definition if you reproduce it it's a different nft so that wouldn't be part of the same collection so it wouldn't represent it wouldn't give the whole the rights to the underlying assets

soical owner of the asset enter into a contract to say there will be no other digital reproduction of this particular asset how does the nft owner know that someone else would get an nft because the physical owner of the asset allows an N reproduction oh the the the asset isn't is is custo so once yeah yeah yeah the asset is taken of the market oh it has to be absolutely absolutely so so right so what happens right it's not like a house sort of sitting there an artwork is actually sitting in the Free Port either here in Switzerland or in in Singapore and Delaware wherever the free ports are and it's completely of the market yeah and vaulted so for my digital assets I Vault everything I put my my you know jewels and safe I mean um

especially actually remember the Punk's and Tiffany's collaboration so basically anyone who had punk you could go get the the one of one at uh Tiffany um of that as well um you know so I mean but that is a very provocative question a great question because it highlights I didn't mention it because I was going there fast but there is a whole ecosystem around that right custodians are very important part of that ecosystem they have to exist and they have to be properly regulated blah blah blah blah blah that's absolutely like the the tokens that you're ising us with SSS regulated tokens and uh uh they you know it's it's an interesting token design but uh you know without going into the details it's like it's very important because these are high price items so it's very important that the digital

thing actually represents that physical thing you know what I love about the community well you you you you pretty much have to and and with art you can like with a house I'm not sure what you do but uh but with art you can do it and it happens all the time already because most of the art in the world is actually sitting in those spring ports 90% of the art it's not on somebody's wall it's not museums it's sitting in those warehouses what's really amazing is actually um so I have some friends who actually have Yun uh uh works right and what's amazing is we're Boris and live art are abling a whole new class of collectors never before can you go get 4.4 Bitcoin this amazing artist right so I think that's actually the power of

like you know this asset class but also this access enabling access and you know I want to give him a round of applause thank you guys um no other questions right we have to leave it at that I'm so sorry we have to go to the boat oh um Boris is the company based in Switzerland uh yeah the the uh the token issuing compan is based in Switzerland yes he just moved to s moved to swiland actually two days ago two days ago I'm I'm a Swiss resident as he's a Swiss resident now yes okay um welcome to see you guys on the boat and other things later thank you very much thank you boat is leaving at 6:15 so you still have a

little bit of time but uh so you can grab your bags everything don't leave anything here take everything think with you to the boat thank you so much Dr sponsors I am C and new hardler for making this happen thank you so much