13 Nov Digitizing assets one Stradivarius smart contract at a time
Renowned violinist Niccolo Paganini would be curious about the effort by tech company Mattereum to digitize ownership of a $9 million Stradivarius violin, enabling him it to be purchased by investors.
Sound like a familiar tune?
We’ve been hearing about the potential for blockchain technology to enable digitization of all kinds of tangible assets such as real estate, art, yachts, and collector cars to be securitized, tokenized and sold to investors.
London, UK-based Mattereum is building an open source, decentralized platform for digital management of real-world assets.
The Stradivarius violin is a high-profile way for them to attract attention to their new platform.
Mattereum Smart Property Register
So how does Mattereum work?
Mattereum’s Smart Property Register allows the creation of a digital asset and governance of former-physical and now-digital assets.
Using blockchain technology, the Smart Property Register provides a range of features including:
- legal creation and custody of digital assets, created from physical assets
- asset governance and legal control, including licensing of intellectual properties
- trading of fractional ownership of assets
- use of digital assets as collateral
- secure contracts to reduce counterparty risks
- transparent registration and tracking of ownership rights.
I can own part of a Stradivarius?
Let’s come back to that magnificent $9 million Stradivarius violin.
In very specific terms, Mattereum’s platform assigns legal title of the Stradivarius violin to registrars through a set of blockchain smart contracts.
Now, the violin is a digital asset that will be tokenized and sold in March 2019 to various investors. Part demonstration of technology and part savvy marketing, Mattereum is attracting plenty of interest.
The digital Stradivarius asset can now have aspects of its smart contracts directed by a governance committee of owners. Other aspects of the smart contract can now be enforced, such as directing that the violin is played a certain number of times in performance in specific countries every year.
This may lead to some intriguing intellectual property challenges and issues. For example, artists could sell their work to investors but stipulate that 25% of the time the art would be on public display, perhaps generating revenue or recurring payments to the artist.
In its whitepaper, Mattereum claims this may lead to more liquidity for digital assets as just one positive outcome from its new platform.
Unlocking enormous untapped capital but questions remain
By using smart contracts to digitize physical assets, Mattereum could conceivably unlock trillions of dollars of capital in addition to its $9 million Stradivarius.
Blockchain technology will help Mattereum begin to navigate the complex world of investments, investment law, and regulations.
But it’s not without its challenges.
For example, imagine setting up a committee to manage a single asset such as the Stradivarius and repeating this with every new asset.
What about asset liquidity? Regulatory oversight? Investor protection? Intellectual property rights?
Only 650 Stradivarius violins were crafted by Antonio Stradivari in the 18th century. That makes the Mattereum violin the 10th most expensive violin in the world.
Mattereum will make one billion Ethereum-based QELSTRAD tokens, backed by the violin available for sale starting in March 2019.
It’s savvy marketing, but will you be able to trade your tokens in a liquid market and earn a return that’s music to your ears?
You can learn more about Mattereum by reading its whitepaper.