The renowned auction house Sotheby’s has broadened its engagement with Web3 technologies, introducing a platform within its Sotheby’s Metaverse for conducting peer-to-peer, fully on-chain secondary sales of NFT artwork.
Launched on Monday, this new portal on the Sotheby’s Metaverse platform, which initially went live in October 2021, supports NFT artwork minted on Ethereum and the scaling network Polygon. These networks were described as the “preferred choice for NFT creators and collectors,” according to a Sotheby’s statement.
Sotheby’s Metaverse facilitates secondary sales entirely via automated smart contracts, allowing collectors to purchase art and collectibles using Ethereum (ETH) or MATIC, Polygon’s native token, from their self-hosted digital wallets.
The next evolution of #SothebysMetaverse is here! The most trusted and dynamic destination to collect, buy and sell remarkable digital works.
— Sotheby's Metaverse (@Sothebysverse) May 1, 2023
While OpenSea and Blur are established peer-to-peer NFT marketplaces, Sotheby’s platform differentiates itself with a “rotating, curated selection of leading artists” selected by Sotheby’s specialists. The roster of artists will be refreshed periodically, and the initial wave includes 13 digital art pioneers, such as Claire Silver, Sam Spratt, Tyler Hobbs, and the pseudonymous XCOPY.
The Metaverse platform is powered by Mojito, an NFT tech and commerce suite developed by Serotonin, a Web3 marketing firm and venture studio. Sotheby’s became an early investor in Mojito in 2021.
Michael Bouhanna, Sotheby’s Vice President and Head of NFTs and Digital Art, described the platform’s launch as a significant progression for the auction house, which was founded in 1744, as it continues to adapt and evolve within the Web3 environment.
The new venue also respects on-chain royalty fees determined by artists, a fee typically ranging from 5% to 10% of the sale price, automatically directed to the artist’s wallet from any secondary sales. This move comes amidst wider conversations about resale royalties in the context of NFTs.
NFTs, or unique digital tokens signifying ownership of a particular item, frequently digital art, naturally align with the concept of provenance due to the public recording of blockchain transactions. For instance, Sotheby’s recently unveiled an NFT collection comprising artwork seized from the bankrupt hedge fund, Three Arrows Capital. This collection, named “Grails,” is arguably part of Web3 history due to its previous ownership.
The “Grails” collection, apart from its intrinsic artistic value, holds a historical significance in the Web3 space, with each piece carrying an immutable record of its past ownership. The public ledger of blockchain transactions not only ensures the authenticity of these artworks but also provides a transparent chain of custody, reinforcing the value and uniqueness of each piece.
The move by Sotheby’s to facilitate secondary sales of NFTs underscores the auction house’s commitment to embracing digital transformation and its recognition of the growing relevance of NFTs in the art world. By doing so, Sotheby’s is positioning itself at the intersection of tradition and innovation, thereby reaffirming its role as a leading global art business.
The incorporation of the Ethereum and Polygon networks into the Sotheby’s Metaverse platform also signifies the auction house’s understanding of the technological preferences of NFT creators and collectors. These blockchain platforms are known for their robustness, security, and scalability, making them ideal for the minting and trading of NFTs.
As Sotheby’s continues to expand its digital initiatives, the auction house is also focusing on ensuring a fair and transparent compensation system for artists. The on-chain royalty fees mechanism is a testament to this commitment, as it provides artists with a passive income stream from secondary sales of their work.
In conclusion, the launch of the on-chain NFT marketplace for secondary art sales is a bold step forward by Sotheby’s. It not only showcases the auction house’s adaptability to new technology but also emphasizes its dedication to artists and collectors in the rapidly evolving digital art space. The future of art trading is undoubtedly being redefined, with Sotheby’s playing a key role in shaping its direction.