Lai Shengyu and Yang Xiaogang, who are behind the Hunan artistic duo TaMen, have taken Chinese contemporary art to a new frontier by tapping blockchain technology to show how non-fungible tokens (NFTs) can be used to bust fakes and safeguard artists’ copyrights.
TaMen, which means “they” in Mandarin, are known for their surrealistic paintings that often depict the contradictory nature of societal progression and corruption. The duo tokenised one of their physical paintings and sold an NFT together with the artwork to a Hong Kong-based buyer for HK$180,000 (US$23,168) worth of bitcoin through art brokerage Macey & Sons this month.
Lai and Yang, both in their forties, are helping to bring NFTs back to the basics by using them to establish the provenance and authenticity of their art work. Such a token is non-fungible as each represents a unique asset and is therefore not interchangeable with another. This is in contrast with bitcoin, whereby all the 18.8 million in circulation today can be swapped between two parties at market price, and a buyer is generally indifferent to which bitcoin is being offered.
The TaMen NFT also cuts through the hype created by the skyrocketing prices fetched by artists such as Mike Winkelmann, who is better known as Beeple. Auction houses have raced to host NFT sales after Beeple sold his digital artwork in the form of an NFT for a record US$69 million in a Christie’s online auction in March. Where Beeple’s NFT features art only in a digital format, the TaMen token is pegged to a physical piece of art and establishes its authenticity.
“An NFT is a digital representation of the ownership of the physical assets,” said Scott Thiel, partner and head of technology for Asia at law firm DLA Piper. “As the provenance and authenticity of the piece is established on blockchain, it helps reduce fraud and fake art.”
Macey & Sons has been working with DLA Piper for over a year to tokenise art pieces, which has been made possible by the global law firm’s tokenisation platform. This platform employs about 20 people in Hong Kong, Thiel said.
A blockchain ledger keeps an unalterable, permanent record of transactions. Traditionally, artists sign a certificate of authenticity with the gallery or brokerage helping with a sale, but confusion can kick in when the piece is sold subsequently. Paper certificates often get lost, be tampered with and are not forgery proof.
As all legal documents, including the certificate of authenticity, and the ownership of the piece along with its copyright are embedded into the digital token, all these rights are transferred to the next buyer with the NFT, Thiel said.
The TaMen NFT has also been embedded with a video recording the artists painting their artwork. The painting depicts the famous Shiba dog mascot of dogecoin walking in a spacesuit, with a space shuttle chasing after a flying bitcoin “comet” in the background.
Technology that helps establish art pieces’ provenance could also raise their value as alternative investments. The city’s pool of wealth has long attracted art galleries, brokerages and art fairs.
Hong Kong accounts for a 1 per cent share of millionaires, 3 per cent of billionaires and 2 per cent of the ultra high net worth population – with wealth worth more than US$50 million – globally, according to a survey on high net worth collectors conducted by UBS and Arts Economics across 10 markets at the end of 2020. China accounts for 11 per cent, 18 per cent and 12 per cent, respectively.
Macey & Sons also offers brokerage services for rare whisky and antique silver and plans to accept bitcoin for all other collectibles as well, according to its managing director, Alexandra Yung.
“We have seen a lot of interest from people holding bitcoin in Hong Kong coming to our art exhibitions and talks, after we opened up our art pieces to bitcoin payments,” she said. “We want to receive payments for everything showcased in the brokerage in bitcoin going forward.”
NFTs help artists get a percentage of the revenue every time an art piece is resold, said Jeremy Ng, head of Asia-Pacific at US cryptocurrency exchange Gemini, which has operations in Singapore. Gemini has been operating an NFT marketplace called NFT Gateway that mint digital art into NFTs.
“It’s like a royalty fee now being paid to an owner of an art piece, but now we have moved all these agreements onto blockchain’s smart contract, which will automatically execute the payment transfer between the transaction parties,” he said.