Storied auction house Sotheby’s took its years-long embrace of Web3 a step further on Monday, launching a portal on its Sotheby’s Metaverse platform where secondary NFT artwork sales are conducted peer-to-peer and fully on-chain.
The addition to the Sotheby’s Metaverse platform, which initially went live in October 2021, features support for NFT artwork minted on Ethereum and scaling network Polygon, which Sotheby’s described as the “networks of choice for NFT creators and collectors” in a statement.
The secondary sales on Sotheby’s Metaverse are facilitated entirely through automated smart contracts, the auction house said, and allow collectors to pay for art and collectibles in Ethereum (ETH) or MATIC, the token native to Polygon, using their own self-hosted digital wallets.
While OpenSea and Blur are notable examples of broad-scale, peer-to-peer NFT marketplaces that already exist today, Sotheby’s venue is distinct in terms of its offerings, which will consist of a “rotating, curated selection of leading artists” that are handpicked by specialists at Sotheby’s, it said.
Sotheby's said its selection of artists for the secondary marketplace will change every few months. And for its initial wave of artists, collectors can list and make offers on NFTs from 13 creators that the auction house has deemed as leaders in the digital art world, including Claire Silver, Sam Spratt, Tyler Hobbs, and the pseudonymous XCOPY.
The next evolution of #SothebysMetaverse is here! The most trusted and dynamic destination to collect, buy and sell remarkable digital works.
Explore: https://t.co/hZvYIkO3xx pic.twitter.com/dCkaCKlXVm
— Sotheby's Metaverse (@Sothebysverse) May 1, 2023
Sotheby’s Metaverse is powered by Mojito, an NFT tech and commerce suite developed by Serotonin, a Web3 marketing firm and venture studio. Sotheby’s said it became an early investor in Mojito in 2021.
Sotheby’s Vice President and Head of NFTs and Digital Art Michael Bouhanna described the measure in a release as an “important step forward” for the auction house—established in 1744—as it continues to evolve within the Web3 space.
The venue dedicated to secondary sales is also designed in a manner that honors secondary on-chain royalty fees specified by artists. A creator royalty is a fee taken from any secondary sales, typically 5% to 10% of the sale price, that is automatically sent to the artist's wallet. Sotheby's acknowledged that its decision comes amid a broader discussion about resale royalties in relation to NFTs.
NFTs are unique digital tokens that represent the ownership of an item, often digital art. And in terms of tracking their history of ownership, the notion that blockchain transactions are recorded on public ledgers naturally lends itself to provenance.
For example, Sotheby’s recently unveiled a collection of NFTs that consists of artwork seized from the bankrupt hedge fund Three Arrows Capital. Titled “Grails,” the collection not only features work from notable artists and valuable projects, but the previous ownership of the NFTs featured also arguably makes them a part of Web3 history.