Art collecting during a pandemic doesn't sound like the right mix for the average person. And yet, a company like SuperRare is making great strides in 2020, even though millions are stuck at home most of the time. With SuperRare, you don't purchase physical art that hangs on a wall. Instead, SuperRare focuses on the concept of digital artwork being sold as non-fungible tokens.
If you've never heard of non-fungible tokens, you're not alone. Until a few weeks ago, I had no idea what this particular type of cryptographic token was all about. After some exciting research, I found that it's used to create verifiable digital scarcity, as well as to confirm digital ownership.
In the case of SuperRare, non-fungible tokens allow anyone in the world to buy ownership of digital artwork. Unlike traditional artwork, which can only be enjoyed by those around it, digital artwork is easily shareable and downloadable. Only the bearer of the artwork's non-fungible token, however, legally owns it. And only they (and the artist) can see a financial return, depending on the popularity of the digital artwork.
According to a recent report, SuperRare saw its sale volume increase by 365% since the beginning of the year. The figure shows that platform sales have risen from $344,000 to over $1.6 million in seven months. Of this, artists have earned over $1.3 million, while collectors have received $430,000.
How does it work?
SuperRare allows artists to digitally sign their work on the platform using a tokenized certificate. They can sell the digital artwork via an online auction, and from there, collectors can purchase and resell works in secondary markets. The current standard for non-fungible tokens is the ERC-721 that's based on Ethereum. It's in that secondary market where artists have the opportunity to grab a percentage of the revenue. SuperRare explains it's analogous to a musician receiving a percentage of sales for a vinyl record issued and still being bought and sold in used record stores today.
To get started with digital artwork collecting, you'll need a Bitcoin tracking app such as Coinage to convert your money, making it possible to buy and sell.
At SuperRare, buyers of digital artwork pay a 3% transaction fee, while artists give up a 15% commission, leaving them 85% of the sale. On the secondary market, artists receive a 10% royalty every time an artwork gets traded. The value of a digital art piece gets tracked on the blockchain and holds value just like cryptocurrencies like Ethereum and Bitcoin.
SuperRare is banking that building a social network for CryptoArt will bring new artists and collectors to the process. It contends that the social layer can make it easier to assess value and other context around items in the marketplace.
Whether you're an artist looking to get into digital or a collector looking for a unique way to invest, SuperRare looks like the place to be. You can find out more information about digital artwork, submitting and collecting, through the SuperRare website. Hopefully, an official app will eventually launch in the App Store.
SupeRare looks interesting, and I can't wait to see how it develops in the future. What say you? Would you consider collecting digital artwork?