Last November, art advisory Winston Art Group announced its partnership with Artory, a blockchain-based art registry, with the joint aim of bringing tokenization to the art market. In due time, their first offering has arrived: on July 20, Artory/Winston released “Psalm 116: Dilexi, quoniam” by Damien Hirst on Republic, inviting buyers to purchase fractionalized shares in the work, which are then recorded and registered by Artory on a blockchain. Financial stakes start at $500 and go up to $5,000 with benefits such as invitations to exclusive exhibitions and a private consultation with experts from Winston at higher tiers.
The 2008 work was selected through a series of high-quality evaluations by Winston, which is responsible for the due diligence on the investment. Works in Hirst’s Psalm series have previously fetched more than $300,000 at auction, while the contemporary artist himself has been making a name for himself on Web3 with his collection, The Currency. This Artory/Wintston offering also represents Republic’s first venture into the art market.
Nanne Dekking, Founder and CEO of Artory, and Elizabeth Von Habsburg, Founder and Managing Director of Winston, share more about the fractionalized investment and how it might democratize art collecting.
What are the key objectives of Artory/Winston?
Von Habsburg: I’ve always been someone who’s very keen on tech and tech’s place in the art market. Artory, with Nanne’s tech initiatives, was the perfect joint venture for us because we wanted to jump into doing funds, we wanted to do something that was best in class, which is what both Artory and Winston always do.
Dekking: There are certain attributes that contribute and add value to an asset, or trust system, that have to be correct before people really believe in the value of certain objects. To be collaborating with Winston, a group of independent people who act on behalf of clients, adds tremendous value to our products because our product is only as good as the input. Blockchain only works with the right ecosystem and with the right people signing off on the information, and it has to make sense why you use blockchain technology as well.
What about Republic stood out to you?
Dekking: We wanted to make sure that we collaborate with a trading platform that believes in the same kind of due diligence as we do, but then at a different level. Accredited investors know their investors, they have an investor base, and we teamed up with Republic because they have that. The investor base for people that can invest with $500 is already there.
How do you see the value of democratizing an art investment?
Von Habsburg: Rather than calling it “democratizing the art market,” I’d say it’s more providing confidence to a new group of investors in the art market. Investing in art is not a new concept. This is just broadening out, and giving confidence to investors that a particular work of art that they couldn’t afford to purchase on their own can be invested on with a token or share.
What should buyers look out for when they’re purchasing a financial stake in art?
Von Habsburg: I would say they should look very closely at who is doing the due diligence behind each work of art. The reason why some funds have not been successful is that the funds have some financial geniuses raising money, but they don’t have internal expertise, so the fund will go externally to find that expertise. We made sure that in this case, the expertise and technology are internal. So there’s no conflict of interest between those of us who are participating internally and our external investors.
Dekking: Ultimately, knowledge of the space, and whatever you invest in, is so important. We always say it’s great to see what happens with the artworks that are sold at auction, but it’s also important to understand what is the buy-in ratio of the same artist or of a specific period of time for that artist. Are these artworks actually always sold at auction? Or do they sometimes fail to sell?
What are your closing thoughts on the emergence of digital art as an asset class?
Dekking: Artists will always use new technologies, different technologies. If there is a way to use new technologies, artists will do it, sometimes just to provoke. That provocation, at a certain moment, becomes a new standard in using a certain kind of medium or technology. I can’t wait for the day when we can add some of the really good NFT artists as well. We realize, by also following that space, that there are opportunities to be made for investors in the future as well.
Von Habsburg: I find it extremely exciting that NFT’s are encouraging a younger demographic to jump into buying works of art. [NFTs are] volatile right now in terms of value, because any new area of the art market that is developed always has its growing pains; but as Nanne said, I think they’re here to stay and I think that certainly down the line we will be looking at NFTs to include in our future funds.