In a world-first, an artwork worth millions of dollars has been tokenized and sold on blockchain.

14 Small Electric Chairs, a two-meter high painting by the late renowned American visual artist Andy Warhol, was sold on blockchain-based art investment platform Maecenas to qualified participants. Approximately US$1.7 million was raised in the cryptocurrency auction for a 31.5% stake of the artwork whose total valuation was US$5.6 million. More than 800 bidders signed up for the auction which was conducted entirely using a smart contract.

The bidders were mostly drawn from Asia and Europe and were a mix of cryptocurrency enthusiasts, sophisticated investors, and fine art professionals. Maecenas conducted the cryptocurrency auction with assistance from Dadiani Syndicate, a fine art gallery based in London.

ETH, BTC or ART

For the blockchain auction 14 Small Electric Chairs was tokenized by being converted into Ethereum-based digital certificates enabling buyers to purchase portions or fractions of the artwork using ETH, BTC, or Maecenas’ own cryptocurrency, the ART token. Over six million ART token were utilized by the Ethereum smart contract in the course of the auction which registered US$6.5 million as the highest bid.

Being the first time that a renowned painting by a world-famous artist has been tokenized and successfully auctioned using blockchain technology, the CEO of Maecenas, Marcelo Garcia Casil, said that the technology had the potential to radically transform the art market.

“Tokenisation of assets is the most prominent and exciting use case of blockchain technology, and we’re proud to be pioneers in this space,” Casil said in a statement. “This Warhol painting is the first of many more to come and we are looking forward to seeing and leading the financial revolution for the art market.”

Democratizing the Art Market

The crypto auction, which began on July 25, had initially been announced in early June as CCN.com reported. At the time the reserve price for the artwork had been set at US$4 million. As reported then the goal was to introduce new buyers into the art market which has earned a reputation, deservedly or not, of being a preserve of the elite.

“We aim to render the future of fine art investments to global reach,” Eleesa Dadiani, the founder of Dadiani Syndicate, said. “The cryptocurrency will broaden the market, bringing a new type of buyer to art and luxury.”

If the success of the crypto auction can serve as a pointer to the future, it was a good start as the auction not only exceeded the reserve price but also closed two weeks before the scheduled date.

Editor’s note: The article has been updated to remove a previous erroneous figure of qualified participants involved.

Featured image from Shutterstock.