Andy Warhol’s 14 small electric chairs may perplex you, not least because of its valuation of some $5.6 million. But what may be more perplexing is the fact that 49% of it will now be tokenized, with Maecenas, a blockchain project specializing in tokenizing high end art pieces, stating:
“The final auction price for each painting share will be determined by a Smart Contract run on Ethereum.”
We thought our detective skills had failed us as we could not find the smart contract itself, but Marcelo García Casil, CEO and co-founder of Maecenas, says the smart contract is “not deployed yet.”
He stated the smart contract will deploy “on the day of the launch” itself, which is this 20th of June 2018. Moreover, our curiosity could not be satisfied in seeing just what an art smart contract may look like as the Andy Warhol tokenization will “be the first of its kind.” So there are no previously deployed similar smart contracts.
And to get a little bit more feel for the technical underlinings – we’ve gone to Solidity School so we can now pretend we have a clue how all this works – we could not browse github either because “it’s closed source for now but we will open source it as soon as we’re ready,” Casil tells Trustnodes.
Finally, the last time we spoke to Casil in May 2017 he said that it was “an ethereum fork for now and may move into public ethereum once the network is more scalable.”
We asked to clarify whether it is still on an ethereum based private chain, or on the public chain, with Casil stating that “smart contracts will be on public ethereum chain, tokenised asset on a private chain.”
We asked for clarification on the latter part and he stated that “Warhol tokens will be on Maecenas chain, not on public ethereum. This is due to regulation restrictions.”
We then wondered what role the smart contract plays, but Casil stated he was very busy at the moment, so it remains unclear at this stage.
Which means we know very little about this project at a technical level. This private chain is clearly not open source, the tokens are not on ethereum but on this private chain, and ownership passes only in a technical, legal, sense as the painting is held on trust. Maecenas says:
“Once an artwork is listed on the platform, the art owner becomes the legal custodian of the asset. As an investor, you acquire asset-backed certificates that give you financial participation in the art piece.
The certificates are protected by a strong legal framework that guarantees your rights over the asset while it remains in expert hands to guarantee its safety and proper care.”
We will hopefully see the smart contract when it is published, but with the token on a different chain we can’t quite really see what function it would perform.
They do, of course, already have a smart contract for their ICO which they undertook in 2017. That gave rise to an ART token that is apparently traded on Idex.
They’re seemingly attracting some trading volume, but the private blockchain aspect does make it less interesting as you wouldn’t quite have the liquidity that tokenization promises.
In regards to ownership, however, DigiX is sort of pioneering the tokenization of physical assets, in their case gold. There is a whole complex process underneath, but as far as the end user is concerned you have a token and a smart contract that goes with it, linked to IPFS, which looks something like:
So here, the token can then be the ownership, especially if it is a non fungible ERC-721 token that takes with it all the paperwork and everything else when it moves.
That of course may have problems if you lose the token, etc, but the public blockchain would have a trusted record of all transactions.
The gold is of course physical and held in vaults, with the token so representing ownership, but not possession. But that ownership can easily move just as can any other token across the world in seconds, making the underlying asset a lot more liquid.
Which is why so many are excited about tokenization where it is on the public blockchain as then history can be fully trusted, but it will take some more months until ethereum addresses scalability. In the meantime, we’re still at the stage of dipping your toes to test the water.