MAECENAS | The art investment platform
MAECENAS | The art investment platform
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What The Art Market Looks Like In 2018

The state of the art market is precisely why we have created Maecenas, a blockchain based project devoted to bringing the industry into the 21st century. The fine art market has been notoriously resistant to change over the decades, with the majority of transactions taking place between auction houses and brokers.

Little wonder when considering the capital that’s present within the fine art sector (hint: it’s trillions of dollars). In fact, according to Deloitte’s Art & Finance report 2017, auction sales in the first six months of 2017 were up by an impressive  18% from the same period in 2016.

 

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Admiring assets you can love.

In the same timeframe auction sales of modern, impressionist and contemporary art rose by US$912 million with huge growth also seen in particular Asian and European markets, most notably China and London.

Staggeringly, by 2026, the estimated wealth allocation to arts and collectibles of ultra-high-net-worth investors (UHNWI) is expected to be US$2.7 trillion. Overall, the art market looks in bullish form.

Who for, though? More than anyone, those UHNWI who can afford to invest millions on beautiful artworks and hold onto them to keep their wealth intact.  

 

 

“A new online marketplace promises to give art lovers the chance to buy shares in famous paintings.”

The Telegraph 2018

 

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Why We Want A Change

This is one of the major reasons why we want to totally revolutionise the entirety of the global art market with our project, Maecenas.

There are millions of potential investors desperate to invest in the world of fine art and put their finances into some of the world’s most beautiful, stunning and powerful paintings and sculptures. With Deloitte predicting an increase of 43% of UHNWIs in the next decade though, the opportunities look few and far between for the average art lover.

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Decentralising the Art Market.

Consider also the power held by traditional auction houses. Sotheby’s and Christie’s alone have approximately 80% of secondary market volume. Buyers going through particular auction houses may often have to pay as much as 25% commission.

As well as the financial power they exert, auction houses also control key information. The lack of a single art marketplace means there is no proper price discovery mechanism, meaning it can be hard to get a fair price for artworks. No order books, no exchanges, and scarce historical information all add to the perception that the art industry is a closed shop.

We believe we can throw the doors open with the Maecenas blockchain project.

"The only way the art market can support more businesses is by increasing the number of buyers and investors."

Art Basel and UBS Art Market Report 2018

 

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How Maecenas Works

All of those problems and more can be solved through the Maecenas project. The very nature of the blockchain project revolves around decentralisation; introducing transparency to auction processes, making the bidding process fairer, negating the need for intermediaries, saving investors money, increasing liquidity, building community trust and much more.

Most importantly, the Maecenas platform has been designed from the ground up to help investors from all backgrounds break into what can be an intensely private market, allowing them to buy shares in some of the world’s most famous artworks.

 

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A fully-curated, transparent art platform

The Maecenas blockchain project isn’t just useful for buyers. Sellers can also approach the community to raise funds from a syndicate of investors, using their own art collection as collateral. At its core, Maecenas is a fully-curated, transparent art platform with full transparency, security and increased liquidity in mind.

Through Maecenas’s innovative ART token, our blockchain platform can tokenise artworks, converting them into small financial units that can be bought and sold through our transparent marketplace. This can only be achieved through the crypto security the blockchain can provide, with our financial technology experts, art advisors and historians working in tandem to create the perfect balance for potential investors.     

"As the focus of publicity shifts to galleries and artists at the superstar level, the art market appears increasingly out of reach of new buyers."

Art Basel and UBS Art Market Report 2018

 

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Use Cases

So, how can the Maecenas blockchain platform work in practical ways? Take a look at our small sample of use cases to see how it can potentially save investors money, generate funds and introduce new buyers to the fine art market.

Instead of having to invest in a short- or long-term art-secured loan at high annual interest to add a specific piece to a collection, a gallery owner could instead list some of their works for a set one-off fee to save money on the overall purchase.

If a family office is given a budget to invest in fine art to enhance a portfolio, chances are that a large portion of that budget will be hit by auction houses’ buyers’ premiums. Investing through the Maecenas blockchain project though could increase a portfolio with smaller fees involved.

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Bringing the Art Market into the 21st century.

A qualified investor who isn’t interested in long-term maturity terms or can’t build a fine art fund will, again, likely be stung by buyers’ premiums through an auction house, potentially as high as 25%. They could instead invest in art from as low as 2% through the Maecenas blockchain project.

Collectors looking to raise funds could also use Maecenas to raise capital so they don’t have to sell any pieces of take out a loan by offering shares in one of their more valuable pieces of art, raising capital at much lower rates.

It is “pretty clear” that the safest way of buying art is to purchase work by the very top echelon of artists.

Jussi Pylkkänen Financial Times 2017

 

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Disruption Potential

We’re so excited by the Maecenas blockchain project because we believe it isn’t disruption for disruption’s sake, as many practitioners of the technology are looking to do today.

Some, for instance, are looking to disrupt thoroughly modern industries. We’re looking to disrupt an industry that’s been in desperate need for evolution for decades upon decades. Coming back full circle, the necessity for blockchain technology in the art field is something that was highlighted in the Deloitte report.

“With Blockchain we could revolutionize the art industry by resolving questions of provenance, and improving transparency, copyright and ownership issues.”  the report says. We believe we’re already there with the Maecenas blockchain project and can go a long way to solving those inherent issues.

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Disrupting and democratising the art market

Finally, Deloitte also mentions the top five challenges facing wealth managers in terms of embedding an art investment fund into a bank’s offering. Those challenges are market-to-market valuation, due diligence, lack of a track record, regulation and a lack of liquidity.

Again, these issues and more are all addressed by the Maecenas blockchain platform, opening the market up to all and consigning a long stagnant industry to the history books.

Over the next decade, there will be disruption as significant as the Internet was for publishing, where blockchain is going to disrupt dozens of industries, one being capital markets and Wall Street.

Patrick M. Byrne CEO of Overstock.com

Please read the following disclaimer >

This blog post is illustrative and for informative and general education and discussion purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) MAECENAS is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently.. MAECENAS does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and any material with regards to investment decisions. You may not rely on the material contained herein. MAECENAS shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this document may be reproduced in any manner, in whole or in part, without the written permission of MAECENAS except for your internal and/or personal use. This material is being provided to you at no cost and any fees paid by you to MAECENAS are solely general educational purposes. All of the foregoing statements apply regardless of (i) whether you now currently or may in the future become a user of MAECENAS’s platform or products and (ii) the terms contained in any applicable contract between you and MAECENAS.

Download our briefing documents here

Briefing documentsThe Maecenas platform is opening up the Art Market fo everyone. Get a free copy of our briefing document for more information. We want to create a curated, and transparent marketplace for art. Access Maecenas’ online platform and browse professionally vetted and curated artworks. Compare historical prices and performance against market benchmarks. 

 

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