Asif Kamal wants everybody to be able to own a Picasso — or at least a piece of one.
The global art market sees $65 billion to $70 billion in sales annually, primarily filtering through six major institutions, including Sotheby’s, Christie’s, and Bonhams. Investing in blue-chip art can be lucrative. However, it has been impossible for regular people who don’t have the ability to spend millions of dollars on a single piece of art.
Kamal thinks it’s time for that to change. Over the decades, Kamal points out, it’s become possible for individuals to invest relatively small amounts of money in commodities like precious metals, bonds, securities, and equity. The goal behind his company, Artfi, is to turn high-end art into another asset class that’s accessible to the masses.
Artfi, which launched earlier this year, is using the blockchain to democratize art investing. By leveraging Sui’s unique object-oriented data structure, zkLogin, Kiosk, and other technologies, Artfi is transforming the way art investment works and is bringing Web3 capabilities to a historically low-tech industry.
“Sui's unique object-oriented mechanism not only makes the process super fast and smart but also ensures safety for all parties involved while maintaining immutability,” said Kamal. “In addition, the Move programming language enhances the security, efficiency, and functionality of smart contracts and digital assets on Sui.”
The Artfi platform lets anyone review original artworks and buy an NFT that serves as the title to an identifiable portion of that work. Imagining an art investment renaissance
Kamal has been in the art business since he was 19 years old and living in New Delhi, India. Over his career, he’s worked in galleries, run auctions, hosted exhibitions, cataloged artworks, and promoted artists, primarily focusing on the South Asian modern contemporary art segment.
In that time, one thing always bothered him: Investing in high-end artworks was highly exclusive. It was only feasible for people who already had a great deal of wealth and was out of reach for regular folks trying to diversify their portfolios.
When the Covid-19 pandemic struck in 2020, Kamal had been following the evolution of blockchain technology. But as physical art galleries and exhibitions suddenly shut down, it gave him time to consider how the blockchain could be used in a new way — not just for cryptocurrency and NFT trading, but to address some of the inequities in art investing.
“If you look at the new era of technological advancement that we are witnessing, I think a lot can be achieved for the art business at large,” said Kamal. “By fractionalizing blue-chip art, we can make it accessible for regular people who never imagined they could participate in this lucrative and luxurious asset class.”
Artfi's innovative investment platform allows people to buy shares of high-end artworks they wouldn’t be able to buy outright as individuals. It uses NFTs to represent real world assets, tokenizing and fractionalizing an art piece into 10,000 different fractions. Each fraction has its own coordinates and fraction number, which is minted as an NFT and stored in an investor’s wallet. This NFT, representing a portion of an artwork with verifiable worth, can then be showcased or sold on the secondary marketplace.
Investors on Artfi claim areas of an artwork from a grid, personalizing the concept of investing as people can choose the part of the work they like the most.
A third-party foundation handles and preserves the physical artworks, and works with galleries and museums that can showcase them for the public. Collectors who buy fractional art via Artfi become part of a DAO that can collectively decide what to do with the piece and whether to sell it in the future.
Artfi focuses on blue-chip works from artists with a history of strong monetary appreciation. Artworks sold on the site have included pieces from world-renowned artists such as Pablo Picasso, Salvador Dali, Claude Monet, Banksy, and Jean-Michel Basquiat, as well as many of the biggest names in South Asian art, including Salman Khan, Raja Ravi Varma, and Jamini Roy.
This system benefits investors, who can buy a portion of an artwork they couldn’t otherwise afford. But it also benefits art owners in a few ways. First, it gives them the ability to sell off fractions of an artwork they feel will keep appreciating and that they don’t want to let go of entirely. In addition, when an owner consigns a piece through Artfi, they become part of the royalty structure of the art. Sui Kiosk supports writing royalty policies that automatically send a specified percentage of an NFT's secondary sale to the address of its original creator. Automatically enforced royalties on Sui ensure the artist benefits as their work increases in value, and its fractionalized NFTs become hot commodities.
Democratizing art investments with Sui
Artfi was initially built on Polygon, but recently transitioned over to Sui.
Kamal identified Sui as the best fit for Artfi because “its object-oriented approach makes the fractionalization of real-world assets more practical, secure, and efficient, providing a robust platform for managing digital ownership of physical assets,” he said.
zkLogin lets new users log in and create a digital wallet with the simplicity of a traditional, Web2-style log-in process. Through zkLogin, Artfi can appeal to users who have no interest in learning about Web3 and blockchains, but just want to appreciate art and participate in an ownership community.
Artfi works with emerging and established artists, such as Sacha Jafri, who has exhibited in the world’s most prominent museums.
Using NFTs, which on Sui are programmable data objects which use an image file to represent themselves, Artfi can easily divide ownership of the physical assets into fractions, enabling more people to invest in and own portions of these highly lucrative and valuable works. When an investor clicks the Buy button under an artwork on Artfi, they are presented with an image of the artwork overlaid with a grid. The investor can select the exact part of the artwork they want to purchase, creating a connection with the original work.
Sui's highly performant network also means that transactions and changes in ownership or updates to the digital object can be executed quickly and efficiently compared to the onerous methods in the traditional art world.
Each NFT on Sui can be programmed to represent specific attributes of the physical artwork it represents. The dynamic nature of NFTs on Sui means they can be given updates to ensure that the digital representation accurately reflects the current state of the physical asset.
As Sui records every transaction in its ledger, it maintains an unalterable ownership record for each artwork, guaranteeing provenance.
Advancing art through technology
Kamal sees Artfi as a natural evolution in the art industry, which he notes has benefited from other technological advancements in previous decades. He points to breakthroughs in websites, apps, and virtual reality, which have all helped bring massive amounts of exposure to lesser-known artists, break down geographical barriers in art appreciation, enhance visitor experiences at galleries and museums, connect people with artists personally and give fans a glimpse into the artistic process, and even allow people to bid in art auctions on their phones.
Through Artfi, they can now invest in artistic masterworks. And soon they’ll be able to do even more. Artfi's upcoming protocol, Artinals, creates a no-code experience for users, letting them exert fine control over their digital assets. Through its interface, users will be able to set royalties, letting them benefit from asset resales, and ensure compliance. Leveraging Programmable Transaction Blocks, which batches multiple actions into a single transaction on Sui, Artfi will ensure low fees and efficient resource usages.
The real world assets segment of the blockchain industry has incredible potential, and Artfi is an early adopter in the field. Its democratization of fine art investing dovetails perfectly with the overarching theme of decentralization on Sui.
