When people ask what inspired the Maecenas blockchain project, we always point them toward the current fine art market, which has stayed relatively unchanged for the past three centuries.
Despite the billions moving around the art market on a regular basis, one of the overriding visions people have is of the traditional, stuffy auction house with ultra-wealthy investors raising paddles in the air to secure a valuable piece of artwork.
Though most auction houses have updated their practices to introduce telephone and online bidding, the sad truth is that this image is still relatively accurate. The fine art industry still feels heavily pinned down by the dominance of old, established auction houses stuck in the past.
Though there is approximately $3 trillion of fine art in safe storage, $65 billion of it is traded on an annual basis through art dealers and auction houses. Many well-off individuals like to buy and keep hold of pieces to add to their investment portfolios and potentially grow their wealth.
Considering that both Sotheby’s and Christie’s have 80% of the secondary market volume alone, it indicates a closed shop to millions who would like to delve into the world of fine art and invest their money into a passion as well as a potentially lucrative financial opportunity.
Again though, buyers using Sotheby’s and Christie’s can be charged up to 25% commission, with sellers being charged even more. It really isn’t the ideal picture to paint for a market that deals with some of the most inventive and beautiful pieces of creativity the world has ever known.
So, what’s the best way for investors new to the market, or those who want to explore more options when it comes to fine art, to throw open the doors of opportunity away from auction houses? We believe that the Maecenas blockchain project could be the answer, and we are determined to bring the fine art market into the 21st century with our ground-breaking approach.
How our blockchain project will decentralise the fine art market
There are other problems that exist within the art market, too, beyond the financial aspect of entry.
There are key players within the art market who control information; there isn’t a single ‘art marketplace’ with a suitable price discovery mechanism, meaning that it’s almost impossible to know the fair value of a piece of art. There are no order books or exchanges, and historical information can be scarce throughout the whole fine art industry.
Again, a closed shop, with those who have access to it building strong portfolios of valuable, beautiful artworks and trading amongst each other. This is not the grand machination of any particular party, it is more the result of how the art market has evolved with many styles of art and expertise in its handling meaning a fragmented and hard to enter unless you have the connections and money. The best way to add value to this market and disrupt it for the wider good is to create a shared information market which increases participation for all
The Maecenas blockchain platform is looking to do just that, bringing together a passionate and knowledgeable team of fintech enthusiasts and fine art experts to open the market and allow millions of potential investors to secure shares of artworks that may have previously been beyond their financial reach.
The need for intermediary involvement will be removed entirely thanks to the Maecenas blockchain platform—connecting artists, collectors and investors together with the use of smart contracts. Our blockchain project will help to make transactions more open and transparent, providing better information and market liquidity.
The auction process doesn’t happen in the space of a few minutes with Maecenas. It happens over a predetermined time frame (of a few weeks) to allow everybody in the community to participate. We feel that Maecenas provides a fairer, more open and honest system which will open up the market to a wider audience, increasing the market’s perception and investors trust over time. It’s not only something that investors want. It’s something the wider fine art industry craves, too.
“Increasing investment in art market start-ups demonstrates continued confidence in the growth of the online art and technology industry.”
Deloitte Art & Finance Report 2016
We want to be one of the first to disrupt the fine art market with Maecenas. Our aim is to become the first place investors turn to when purchasing shares in the world’s most stunning pieces of art.
Find out more in our briefing documents.