In the latest example of art market disruption, a prominent former auction executive teamed up with cryptocurrency experts in May to purchase Banksy’s 2005 painting “Love Is in the Air” for 12 , $ 9 million and now plans to sell 10,000 coins of it in the form of NFTs, or non-fungible tokens.
The executive, Loïc Gouzer, who upset the format of traditional auctions while he was at Christie’s – notably by orchestrating the sale of a Leonardo da Vinci painting for 450.3 million dollars at an auction of contemporary art in 2017 – helped found Particle, a platform that fuses art and technology with the goal of reaching a wider pool of potential buyers.
“When I was a kid and looked at auctions and catalogs, I always felt that it was impossible to participate financially and that I was by definition excluded,” Gouzer said in a telephone interview. . “Splitting the work into 10,000 NFTs allows a much larger audience to be part of a collecting experience.
“Of course, you can appreciate art when you go to a museum, but the pleasure of art also comes from owning it,” he continued. “That’s why people collect. “
If successful, the business could help fuel a burgeoning competitive category in the art market, with consortia of multiple buyers challenging the preeminence of billionaire collectors at a time when the pandemic has accelerated trade. in line. NFTs have become increasingly popular, accounting for a third of online sales, or 2% of the overall art market, according to the Artprice database.
Last month, thousands of cryptocurrency fans – calling themselves ConstitutionDAO – pooled their money to bid on an original print of the Constitution at Sotheby’s (having raised around $ 40 million, they lost to the collector and hedge fund mogul Kenneth C. Griffin, who paid out $ 43.2 million). Last March, digital artist Beeple (aka Mike Winkelmann) sold his NFT “Everydays: The First 5,000 Days” for $ 69 million in an online auction from Christie’s.
Longtime collectors remain skeptical of NFTs, and art experts say the Particle business is just the latest iteration of a virtual art world that has yet to be proven. “A work of art is a unique object and art-loving collectors want to own the object itself,” said Megan Fox Kelly, president of the Association of Professional Art Advisors. “The NFT is a separate entity from the object. I think we’re still in the very early stages of understanding the existence of these NFTs as works of art, ”Kelly added. “Right now they appear to be investment vehicles, with potentially very large returns, and the conversations around them center around that.”
Banksy’s physical painting “Love Is in the Air”, which depicts the image of a bomb thrower throwing a bouquet of flowers, is to be exhibited from December 3 at the Institute of Contemporary Art in Miami, during the Art Basel week.
The Banksy has been split into a 100 x 100 grid, resulting in 10,000 unique squares, or particles, which will be sold as NFTs for around $ 1,500 each. Each particle represents a minority property in the painting and will be accompanied by a collection card that shows the entire work as well as the location of the particle on the painting.
Gouzer said his experience last April selling artist Urs Fischer’s first NFT – a unique digital token encrypted with the artist’s signature and individually identified on a blockchain – for around $ 98,000 on his app Fair Warning auctions had prompted him to explore similar auctions. “I noticed that so many people were interested in art, but had no way to be a part of it,” Gouzer said.
Former president of post-war and contemporary art at Christie’s, Gouzer started the new venture with Shingo Lavine and Adam Lavine, the co-founders of ethos.io, recently renamed Voyager, which connects financial institutions to the blockchain. The other founders are Philip Eytan, co-founder and chairman of Voyager, and Oscar Salazar, founder and chief technology officer and chief architect of Uber.
Particle has raised $ 15 million in seed funding and Gouzer said they will raise more to expand their inventory. The group was encouraged by the recent example of ConstitutionDAO, which upped Ether cryptocurrency for its losing bid. (According to The Verge, the group is now trying to repay the money to the backers and are facing high transaction fees.)
“It showed that people want to be a part of something bigger,” said Shingo Lavine. “There is a huge appetite to be able to tap into fine art masterpieces and expensive relics. “
The founders said they were also responding to the widespread desire for ownership. “There is a difference between the person who has this image and uploaded it and the person who owns it and says ‘It’s mine’,” Shingo said, adding of NFT buyers: “People accept this new story of owning things. “
But the legal issues of hacking and fraud in the NFT market have not been considered by the courts, creating an element of risk. It is also unclear whether other countries will recognize the validity of an NFT sale. “Since you have these markets, third parties with their own contracts and currency issues, it’s a lot more complicated from a legal standpoint,” said Diana Wierbicki, Partner and Global Head of Art Law. at Withersworldwide.
The company has established the Particle Foundation, a non-profit organization that will keep its purchased works of art and visit them for exhibitions. One percent of its purchases will be donated to the Foundation, which will act as a so-called protective shine, ensuring that no one can claim possession of the physical painting. “The work can never be resold,” said Gouzer.
Interested buyers can apply from December 13 and in the meantime can register on the waiting list at particlescollection.com. The sale of Banksy’s shares begins the week of January 10 and will take place on the Avalanche blockchain platform. The Particle company says it will try to ensure that units are split between different buyers rather than having an individual buyer acquire more than one.
“We are not selling you the image of the painting,” said Harold Eytan, Managing Director of Particle. “We sell you this concept of ownership of a piece of painting. While some platforms allow you to purchase “shares” of artwork, we make it easy to purchase unique pieces of artwork. It’s a different experience, focused on fundraising and not on investment.
As to starting with Banksy’s work, Gouzer said the rebellious spirit of the painting was a fitting metaphor for what Particle herself is trying to do – challenge the status quo.
“It’s a piece for the revolution,” Gouzer said. “We’re not trying to change the world here, but we’re trying to reach a new community and compete with some of the world’s greatest collectors.”