Artiox Case Study: De-listing of Yal??n G?k?eba?’s "Bodrum"

Background: Artiox merges the traditional art world with cutting-edge digital asset management by tokenizing artwork. The platform allows investors to purchase tokens representing a share of an artwork, bringing liquidity to a typically illiquid market. "Bodrum," by esteemed artist Yal??n G?k?eba?, became Artiox's first token to reach a value of 10 Turkish Lira (TRY), setting a precedent in the art-tokenization space.

Challenge: The challenge was to provide a seamless investment opportunity that would allow investors to participate in the art market at an accessible entry point and to successfully manage an artwork's lifecycle on the platform from listing to auction.

Solution: Artiox has a unique approach to handling artwork, which unfolds in three key phases over at least a year. Here's a simplified breakdown:

• Public Offering of Artwork Shares: Initially, Artiox offers the public a chance to invest in an artwork by purchasing shares. This is done by assigning a value to each artwork based on its insurance coverage. For example, if an artwork is insured for 800,000 Turkish Lira (TRY), it will be divided into 800,000 shares, with each share priced at 1 TRY. This allows investors to buy a piece of the artwork at a relatively low cost.
• Artiox Market Listing: Approximately two weeks after the public offering, these shares are listed on the Artiox market. This listing enables the shares to be traded freely, 24 hours a day, 7 days a week. Shareholders and other users can buy more shares or sell their existing shares at market prices or limit prices, which may fluctuate based on demand and the perceived value of the artwork.
• Delisting the Artwork: After the artwork has been listed on the Artiox market for at least a year, Artiox moves to auction off the piece. This final step potentially allows shareholders to profit if the auction price exceeds the earlier valuations, reflecting an increase in the artwork's market value over time.

This strategic process offers a novel way for individuals to engage with and invest in art, blending traditional art appreciation with modern investment strategies. By tokenizing artwork into shares based on its insured value, individuals can invest in art at a low entry cost, addressing the issue of high upfront investments traditionally required. The subsequent listing on the stock market enables liquidity, allowing investors to trade shares anytime, thus providing flexibility and potentially reducing financial risk. Finally, auctioning the artwork after a year offers a clear exit strategy, with the potential for profit if the artwork's value has increased, solving the problem of illiquidity in the art market.

Bodrum’s Delisting Story

"Bodrum," was listed in August 2020, following its initial public offering. At the outset, it was insured for 30,000 Turkish Lira (TRY), leading to the issuance of 30,000 tokens to represent its value. Over the ensuing three years, the value of these BOD tokens saw a remarkable rise to 11.42 TRY each. This significant appreciation reflected a tenfold increase in the artwork's value, underscoring the substantial growth and investor interest in "Bodrum."

Delisting Process:

• The BOD/TRY trading pair was closed for trading on February 19, 2024, at 17:00 to prepare for the auction.
• Artiox notified all token holders and provided details of the upcoming auction, including the final trading price, which would serve as the base value for the auction.
• The auction was held live to maximize the artwork's value. Interested parties were directed to a specific URL to participate in bidding.

Results: The "Bodrum" auction resulted in an unprecedented 1100% profit over the initial listing price, with a final token value of 1 BOD = 12 TRY. This was a significant milestone, as "Bodrum" was the first token on Artiox to reach the value of 10 TRY before the auction.

In the table below, you can see the comparison of the return performance of the artwork with the S&P500 and BIST100 indices.

Impact on Token Holders: Token holders experienced a considerable return on investment, with the TRY equivalent of their tokens updated in their Artiox wallets within two days post-auction.

Takeaways:

• Accessibility: Tokenization can make art investment more accessible and provide a return on investment that outperforms traditional markets.
• Innovative Liquidity: Tokenization can offer liquidity to traditionally illiquid assets like fine art.
• Investor Engagement: Keeping investors informed and engaged throughout the auction process built trust and ensured transparency.
• Strategic Delisting: Delisting at the right time can capitalize on asset appreciation for the benefit of all stakeholders.
• Market Positioning: Artiox solidified its position as a trailblazer in the art investment industry by successfully implementing a new model that benefitted investors.

Conclusion:

Artiox's successful tokenization and subsequent auction of Yal??n G?k?eba?’s "Bodrum" represents a watershed moment in the world of art investment. The platform’s ability to reach significant token values while making art investments accessible to a wider public has paved the way for a new era in art market dynamics.

Future Steps:

Looking ahead, Artiox aims to continue its mission of making art investments accessible and profitable. The platform will focus on refining its auction process and expanding its collection, thus providing more opportunities for investors and art enthusiasts alike.