Artmarket.com: Pak allows thousands of collectors to buy part of a work whose total price reaches $91.8 million
PR93629
PARIS, Dec. 10, 2021 /PRNewswire=KYODO JBN/ --
The idea of buying an artwork collectively goes back a long way and has been
entertained in various schemes and formats. But the problem of how to resell
your ‘shares’ was always a complicated obstacle.
However, according to Artprice, this problem has finally found a solution with
NFTs. Anonymous artist Pak put "mass units" up for sale on Nifty Gateway for 48
hours. The final work, titled The Merge, is made up of 266,445 “units” that can
be sold separately and instantly on the blockchain.
[https://imgpublic.artprice.com/img/wp/sites/11/2021/12/Invader-Joconde.jpg]
thierry Ehrmann, CEO and Founder of Artmarket.com and its Artprice department:
“Blockchain and NFTs have at last made it possible to design properly effective
forms of securitization on the art market. Non-fungible tokens open up endless
possibilities for the acquisition of shares in a work, as Pak has demonstrated
with this extraordinary sale. This represents a veritable paradigm shift for
the art market”.
28,000 collectors
From now on, the unknown factor is no longer the sale price (fixed in advance)
but rather the number of units purchased. Moreover, Pak and Nifty Gateway
developed a whole strategy to boost demand during the 48 hours that the sale
lasted:
- initial price of $299 for loyal collectors of Pak and $400 for new entrants
- increasing price by $25 every six hours
- for 10 units purchased an eleventh is free; for 1,000 units purchased 300
more are free
- a continuous real-time ranking of the best buyers (under pseudonyms)
- the work Alpha Mass offered to the largest buyer
In total, 266,445 “mass units” were purchased for $91.8 million by 29,000
different buyers. This makes an average price of $316 per unit and an average
of 9 units acquired per buyer. According to Artprice by Artmarket, the result
is a genuine ‘community’ that the artist has brought together to create a
gigantic and dematerialized work, in which everyone is free to resell their
shares at any time.
Typically, works of art are auctioned off as one-offs rather than as a series.
Jeff Koons’ Rabbit sculpture (1986) made Koons the most expensive living artist
in 2019 when it sold for $91.12 million.
One or more works?
In April 2021, Pak organized a sale with Sotheby’s called The Fungible
Collection. For three days, for only 15 minutes each day, anyone could acquire
“cubes” at a fixed price:
- 1st day: 19,737 cubes sold at $500 = $9,868,500
- 2nd day: 3,268 cubes sold at $1,000 = $3,268,000
- 3rd day: 593 cubes sold at $1,500 = $718,500
While the cubes in each buyer’s wallet were linked, the 23,598 cubes did not
make a total work per se: each purchaser acquired his own set of cubes with an
average purchase price of $587. Similarly, Beeple’s The first 5,000 days (sold
at Christie’s in March 2021 for $ 69.4 million), is theoretically made up of
5,000 full works, the average price of which is therefore around $14,000.
By way of comparison, the sale of the Macklowe Collection on 15 November 2021
at Sotheby’s New York raised $676 million from 35 works; that’s an average
value of $19.3 million per lot. The comparison doesn’t make a lot of sense
except from the point of view of the homogeneity of the works and their
securitization. Imagine you’d been given the opportunity of acquiring a share
in Mark Rothko’s No. 7 (which entered the Macklowe Collection in 1987) for
$500. After its sale for $82.5 million, you would own a 165,000th part of the
painting.
However, Pak’s approach is the opposite since the work, The Merge, did not yet
exist at the time of the sale. No-one knew what it was going to look like. By
buying a part of this unknown work, each collector contributes to it.
Encouraged by a low starting price but also encouraged to acquire the largest
number of units in order to receive a reward, The Merge is a game that brings
together technology buffs, cryptocurrency and NFT devotees and art enthusiasts
increasingly fascinated by this universe.
Artists have now moved into the primary position around which the art market
revolves.
According to Artmarket.com, NFTs represent a genuine grassroots movement that
has created its own ecosystem, with a virtuous economy and exponential growth
potential.
Indeed, the turnover generated by NFTs so far this year (to 9 December 2021) –
as measured by ERC 721 and ERC 1155 Ethereum smart contracts relating to the
art market and collections – is 26.9 billion dollars (source Chainalysis).
Image:
[https://imgpublic.artprice.com/img/wp/sites/11/2021/12/Invader-Joconde.jpg]
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[https://imgpublic.artprice.com/img/wp/sites/11/2021/11/Biographie_thierry_Ehrma
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Artmarket is a global player in the Art Market with, among other structures,
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