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Renowned auction house Sotheby’s increased the scope of its NFTs (non-fungible tokens) offerings on its ‘Metaverse’ and enabled complete on-chain peer-to-peer secondary trading.
In 2021, the art gallery created Sotheby’s Metaverse to provide digital collectors with a carefully chosen selection of NFTs.
Sotheby’s Metaverse Facilitates Digital Ownership
The global art business will feature a “rotating, curated selection of leading artists hand-picked by Sotheby’s specialists.”
Notably, Ethereum and Polygon blockchains will execute the NFT sales.
The auction house stated in a release that Sotheby’s intends to offer knowledgeable context and direction for each property. It includes anything from thematic presentations to artist spotlights.
In addition to the peer-to-peer transactions, Sotheby’s will honor artist resale royalties directly on-chain. Marketplace smart contracts will honor the royalties for secondary sales carried out on the Ethereum and Polygon blockchains.
The release notes the sales will continue to attract a 2.5% seller fee and will give the original owner royalties. This point is especially crucial, given the ongoing controversy over royalties in the NFT market.
The Royalty Debate Within the NFT Community
Ever since OpenSea, one of the top NFT marketplaces, imposed artist royalties on its platform in November 2022, there has been an ongoing debate within the community. While some supported OpenSea, the company was criticized for collecting creator fees from existing creators.
Nevertheless, NFTs have been crucial in sustaining art auctioneers throughout the Covid-19 pandemic. Sotheby’s has grown to become one of the largest brokers of fine and decorative art and collectibles worldwide, thanks to its website and mobile app’s robust online presence.
Sotheby’s is a leading fine art auctioneer and a major player in the global art market. According to reports, it dominated Hong Kong and Milan markets in 2022. It also ranks second place behind Christie’s in most markets. In 2021, Sotheby’s and Christie’s collectively accounted for over half of the global value of the secondary art market, with Sotheby’s contributing 26% of that value.
This year, Sotheby’s has made headlines by announcing that it will auction non-fungible tokens. The collection was among the assets the defunct cryptocurrency hedge firm Three Arrows Capital owned. In consideration of the art’s context and format, Sotheby’s conducted live, online, and other sales channels auctions of NFT artwork from 3AC’s GRAILS collection.