Sotheby’s Has Launched an On-Chain Peer-to-Peer NFT Marketplace for Secondary Art Sales
Renowned auction house Sotheby’s has now launched an on-chain NFT marketplace for secondary art sales.
Sotheby’s was one of the first mainstream auction houses to embrace non-fungible tokens in its heady days. The auction house has now launched its own secondary NFT trading marketplace for peer-to-peer (secondary) NFT artwork sales. The portal is fully on-chain.
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
The new secondary NFT marketplace is an expansion of the auction house’s existing Sotheby’s Metaverse trading platform, its digital artworks, and collectibles portal. The NFT marketplace will have fully on-chain NFT sales that showcase a rotating selection of high-profile NFT artists. The artwork on the platform will be curated by specialists at Sotheby’s.
All the transactions will occur on the Ethereum and Polygon networks. Collectors will be able to buy the NFT artworks on the portal using either MATIC or ETH.
Sotheby’s has handled some of the biggest NFT sales over the years including a $17 million auction of creator Pak’s NFT in 2021. In June of the same year, Sotheby’s also launched the Natively Digital sale which featured Jennifer and Kevin McCoy’s Quantum which was the first ever NFT to be created. To tap into the NFT fine art market, Sotheby’s launched the Sotheby’s Metaverse NFT platform.
Secondary NFT sales on Sotheby’s Metaverse happen entirely via automated smart contracts, enabling collectors to pay for art and collectibles in MATIC or Ethereum and will use their own self-hosted digital wallets. MATIC is the native token for the Polygon.
There are already some notable peer-to-peer NFT marketplaces such as Blur and OpenSea. Sotheby’s says its new peer-to-peer trading platform is differentiated by its offerings, consisting of a “rotating, curated selection of leading artists” who have been handpicked at the auction house.
The auction house also promised that its selection of artists at its peer-to-peer marketplace will be changing every few months. The initial wave of artists whose works have been featured on the platform consists of 13 Web3-defining creators regarded by Sotheby’s curators as leaders in the digital art world. They include Tyler Hobbs, Refik Anadol, Claire Silver, Sarah Zucker, Sam Pratt, IX Shells, Diana Sinclair, Sofia Crespo, Sebastião Salgado, Osinachi, Pindar van Arman, Hackatao, and an artist going by the pseudonym XCOPY.
The NFT tech and commerce suite Mojito powers Sotheby’s Metaverse. Mojito was developed by the Web3 marketing firm and venture studio Serotonin and the auction house was one of the early investors in Mojito in 2021.
Sotheby’s describes its new NFT marketplace as “an important step forward” in its ongoing evolution in the Web3 space.
Sotheby’s Metaverse is trying to build upon its success in the primary sales initiatives by giving creators and collectors the go-to fine art platform for the secondary NFT art market. It is therefore deliberately handling the controversial issue of artist royalties in the NFT ecosystem.
According to Sotheby’s, the artist royalties on its new secondary NFT marketplace will be through smart contracts as well as according to the artist’s own on-chain royalty rate.
Sotheby’s bid to support NFT artists is coming at a time when other NFT marketplaces are reducing the amount of royalties paid out to artists so as to attract more users and increase their market share.
Sotheby’s designed the secondary NFT sales venue in such a way that it caters to the secondary on-chain royalty fees that are set by the artists. The creator royalty, the fees deducted from any secondary sales, which usually range from 5% to 10% of the sale price, and is automatically sent to the artist’s wallet. Sotheby’s attributed this decision to the general debate on resale royalties for NFT sales.
In June this year, Sotheby’s will also create a new digital gallery via the Web3 art gallery platform oncyber. The gallery will contain select artworks from its secondary market. Sotheby’s Metaverse will be partnering with the renowned digital art collector Cozomo de’ Medici who will also be curating the rooms in the gallery with select artworks from its famed collection.
Sotheby is launching the marketplace and the oncyber gallery at a time when it is plagued by controversy. In April, the auction house came under some criticism after announcing the latest iteration of its Natively Digital Series, a show that honors glitch NFT artists where no women artists were featured. The show was promptly paused after a public outcry and alter relaunched with a more diverse lineup of artists.
Another day, another low in volumes. OpenSea with a 20-month low and Blur back at levels from before the token launch. Given how much volume right now is pump & dump and manipulation, I'm not actually sure it's a bad thing to see things slow. pic.twitter.com/LlebXEb9YC
— NFTstatistics.eth (@punk9059) April 28, 2023
Apart from the recent controversies, Sotheby’s secondary marketplace is also launching at a time when the NFT market has hit a 20-month low with the floor prices of even some of the most sought-after NFTs falling sharply.