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Sotheby's luxury auction house has introduced an on-chain marketplace, enabling the purchase of secondary NFTs by digital art collectors.
The company has developed a fully on-chain sales system on the Ethereum and Polygon networks, where users can buy curated NFTs. While there are already many pre-existing NFT marketplaces that host peer-to-peer sales of digital artworks, the auction house aims to distinguish itself by offering a "rotating, curated selection of leading artists hand-picked by Sotheby's specialists."
Sotheby's Metaverse platform exclusively uses smart contracts for NFT sales, enabling buyers to pay with either ETH or MATIC. The art house is committed to paying artists royalties through smart contracts on the secondary sales platform, based on their chosen rate.
According to Sotheby's, the platform will launch with works from 13 prominent digital artists, including the pseudonymous artist XCOPY, Claire Silver, Tyler Hobbs, and Hackatao. In April 2021, Sotheby's entered the NFT market by auctioning off the work of a pseudonymous digital artist named Pak. Following this debut, the auction house has achieved several record-breaking sales of digital art.
Sotheby's achieved a remarkable sale of $11.8 million in June 2021 by selling a scarce CryptoPunk, which was famously referred to as "Covid Alien". Sotheby's auction house achieved a successful sale of 101 Bored Ape NFTs, generating a total of $24 million, three months after its first appearance in the NFT market. The auction house also conducted the largest NFT charity auction to date in November 2021, selling 140 rare NFTs to raise funds for the nonprofit healthcare organization Sostento.
Sotheby's move into the NFT market is significant because it is one of the oldest and most prestigious auction houses in the world, with a history dating back 279 years. The company's entry into the NFT market has helped to legitimize the concept of digital art ownership and has contributed to the mainstream adoption of NFTs.
The new on-chain marketplace developed by Sotheby's is expected to provide a more secure and efficient way of trading NFTs, which have previously been criticized for their lack of regulation and transparency. The platform's use of smart contracts ensures that all transactions are recorded on the blockchain and that artists receive royalties on secondary sales. With this new marketplace, Sotheby's is expected to continue to play a leading role in the rapidly growing NFT market.