How it works

The Art Exchange combines three categories of instruments to build a comprehensive financial solution for the art world:

  • Instruments for collective ownership (“tokenization”);

  • Instruments for risk-sharing (future sales, guarantees, bets, etc);

  • Innovative instruments to transfer verified prices of selected artworks to blockchain

The workflow

Risk-sharing:

  1. The Art Exchange experts cherry-pick the most interesting artworks among those to be offered on the evening sales by one of the auction houses and transfer the price to the blockchain database

  2. On the platform, registered users can “bet” against each other, hedge the risks or create complex financial contracts on the outcome of the future sale

  3. After the picture is sold the contracts are self-executed and the winning party receives the money

Tokenization:

  1. A collector brings in an art piece to be either sold fractionally or to borrow money against it. The artwork is tokenized and listed on the platform with the desired specifications

  2. Multiple investors either buy fractions of the artwork or lend money to the collector

  3. The collector pays off the loan with the accumulated interests to the investors. If the piece of art was offered for sale, The Art Exchange team sells it in the most favorable moment to fetch the higher price. The proceedings are shared with investors in proportion to their share of ownership in the artwork

Money flow

Risk-sharing:

  1. A user creates an account and deposits money to The Art Wallet through a third-party authorized organization or from a cryptocurrency wallet

  2. On the platform, two or more registered users create a financial contract on the outcome of a future sale or fluctuations in the underlying asset. The transaction is signed by the wallet and the platform puts a hold on the amount of the funds, necessary for contract execution

  3. After the piece of art is sold, the contract is self-executed and the winning party receives the money

Tokenization:

  1. A collector brings an art piece to either sell it fractionally or to borrow money against it. The artwork is tokenized and listed on the platform with the desired specifications

  2. Multiple investors either buy fractions of the artwork or lend money to the collector.

  3. The collector pays off the loan and the accumulated interests to the investors. If the picture was offered for sale, The Art Exchange team will sell it at the most favorable moment to fetch the higher price. The proceedings are shared with investors in proportion to their share of ownership in the artwork