Non-fungible tokens (NFTs) have taken the crypto market by storm, from the Bored Ape hype to the recent Reddit avatar trading phenomena. While NFTs are mainly known for similar profile picture avatars, there is much more to the technology. By pairing NFTs with fine art, regular investors can have increased access to traditional art pieces that are usually out of reach for the average person. Artfi is one platform that aims to simplify the process of investing in fine physical art, and we will look at how the platform works.
What is Artfi?
Artfi is a blockchain-based platform for investing in fine art. The platform enables users to tokenize their works of art and sell them to prospective buyers. The platform is built on the Polygon Layer 2 scaling network for Ethereum, so transactions are faster and more affordable for users.
When it comes to investing in fine art, there are several hurdles for investors to go through, including dealing with brokers and auction houses. Investors also need to be sure they are purchasing authentic art pieces, which can be costly and time-consuming.
By using blockchain technology to tokenize works of art, the platform aims to make it easier for regular people to invest in fine art. One way they plan to do this is by using fractional NFTs to reduce the costs for investors. Fractional NFTs are non-fungible tokens that can be divided into different pieces, each fraction representing part ownership of the NFT.
The platform also aims to improve the liquidity of the fine art market through tokenization. Instead of dealing with brokers and auction houses, users will be able to buy and sell artworks (or pieces of art) almost instantly via the platform.
How Artfi works
The Artfi platform enables the tokenization and sale of fine art pieces. The platform can tokenize high-value paintings on behalf of an artist before listing them on the platform for sale. These tokenized art pieces can be sold as fractional NFTs, making it easier for investors to own a piece of the art. The platform works by users connecting their crypto wallets to the platform and making a purchase directly, without any middlemen or intermediaries.
Artists are able to earn royalties on the sales of their art pieces. This is similar to traditional NFT projects that enable artists to earn recurring fees for sales on the secondary markets. However, with Artfi, royalties are earned on the initial sales of the art. At this time, it is not clear if artists will be able to earn royalties on secondary sales. Royalties are paid out to the artists by smart contracts as soon as a sale is made.
The platform also has a physical gallery space in Dubai where art pieces can be viewed in real-time. This way, physical art pieces can be paired with their digital counterparts, improving trust and transparency for prospective art investors.
The ARTFI token
The platform is powered by the ARTFI token, the official currency for buying and selling art on the marketplace. ARTFI is a Polygon-based token inheriting the network's low fees and fast settlement times. The token can also be staked to secure the network, earning holders additional tokens in return. As a result, holders will also be able to earn some of the trading fees generated by the marketplace. Additionally, the token has a burn mechanism that reduces the supply over time, increasing its scarcity.
Conclusion
Artfi is a blockchain-based marketplace and platform for creating, buying, and selling tokenized art pieces. By enabling the fractionalization of NFTs, the platform aims to make it easier for regular investors to own pieces of fine art.