Playing a New Tune: 18th-Century Violin Tokenized by Crypto Billionaire Novogratz

Playing a New Tune: 18th-Century Violin Tokenized by Crypto Billionaire Novogratz

Michael Novogratz’s firm, Galaxy Digital, has tokenized an 18th-century violin as collateral. The 316-year-old violin belongs to Animoca Brands co-founder Yat Siu, who bought it at an auction last year. Tokenizing the instrument is expected to enhance liquidity and accessibility for investors.

Galaxy Digital has created a blockchain version of the musical instrument, which is valued at around $9 million. This tokenization will be used as collateral for a multi-million-dollar loan facility, in what is considered one of the highest-profile tokenizations to date. The violin, made in 1708, was once owned by Russia’s Catherine the Great.

According to Bloomberg, Galaxy Digital lent millions of dollars to Yat Siu, who purchased the violin last year. The instrument is now under the care of Galaxy, which has transformed it into a non-fungible token to back the loan.

“By starting with high-end assets like this violin, we’re creating a process that transforms how a whole range of assets are managed, valued, and traded in a digital economy,” said Galaxy Digital CEO Michael Novogratz.

Tokenizing physical assets boosts their value and liquidity, enabling them to be “fractionalized” into smaller units for more accessible trading. The trend of packaging real-world assets as tokens is growing rapidly. Estimates from late 2023 indicate that the total value of on-chain real-world assets has reached a record $118 billion.

Although Yat Siu acknowledged that tokenizing the violin was not necessary, he admitted it would enhance liquidity. Siu, with a background in classical music, noted the significance of tokenizing an instrument of such storied origin. Speaking with Bloomberg, Siu mentioned he is open to fractionalizing the violin, allowing potential investors to purchase a claim, though there are no current plans to do so.

For Galaxy Digital, this initiative sets an example of how investors can access and purchase claims on real-world assets via digital platforms. “By tokenizing this Stradivarius violin, we are not just preserving the legacy of one of the world’s most precious musical instruments, but we are also setting a precedent for how the latent value of real-world assets can be accessed and utilized,” Novogratz stated.

Galaxy Digital’s investment banking’s Digital Labs spearheaded the tokenization process, with technology provided by GK8.

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