Tokenize Art into Asset-backed NFTs to Realize their Latent Liquidity

6 min read
August 14, 2023

The art world is constantly evolving, and with the rise of blockchain technology, a new trend has emerged: the tokenization of real-world art. This trend has gained popularity in recent years and made real-world art more accessible than ever before. Despite this, many still aren’t aware of this trend and are still wondering if they should bring their real-world art on-chain or not.

To address these concerns, we are here to clarify any doubts you may have. So keep reading, as we have much to reveal today!

Tokenization of real-world Art: Moving Beyond Digital Art Collectibles

Art galleries have long been a hub for art enthusiasts and artists alike, contributing significantly to the global economy. In 2022, the art market grew by 29%, with over $65.1 billion worth of art traded, according to the Art Basel and UBS Global Art Market Report.

Nevertheless, various research has shown that the largest contribution to the global art market only comes from the leading art galleries. Recent research has shown that the United States and Canada’s leading art galleries are the ones that generated over 4.2 billion dollars and have gone up by +17% as compared to last year. Whereas art galleries with an annual turnover between $250,000 and $500,000 faced a decline in sales. This analysis shows that there are still millions of physical artworks that remain unsold, pilled up in the dust of galleries’ backyards, that lose their luster over time. Let us tell you how.

Source: MutualArt & Artsy

The majority of top art galleries only showcase a certain number of artists and artworks, leaving no room for other artwork. In addition to that, art galleries are often concentrated in major cities, making it difficult for people around the globe to access a particular artwork. Besides that, the traditional art market is difficult to enter for new artists, collectors, and investors. This is partly because established artists and art galleries have significant influence over the market, making it difficult for newcomers to gain exposure and recognition. Resulting in numerous physical artworks becoming inaccessible and more illiquid assets that cannot be easily traded.

However, blockchain technology has provided some relief to art galleries and artists in overcoming the challenges faced by them. This has been made possible through the emergence of Phygital NFTs, which have opened up a new avenue for the art world to make their physical art more accessible & liquid. Many renowned artists have released their exclusive Phygital NFTs, giving art lovers the chance to bid on and own these pieces, or simply enjoy their aesthetic beauty without any geographical boundaries. But, as per the analysis, only 6% of art has been brought on-chain. That means, there are still a significant number of physical artworks that are yet to be tokenized.

Source: Deepwater Asset Management

Well, it is quite evident that asset tokenization has the potential to radically transform how real-world assets like art are owned, utilized, and monetized, thus revolutionizing the financial landscape. Not only that, but it’s also enabling individuals, art lovers, investors, or even art galleries, irrespective of their wealth and size, to broaden their investment portfolios. Thanks to it, artists now don’t need to depend on big-label galleries to showcase their artwork. They can simply tokenize their art into asset-backed NFTs and make it accessible to art lovers around the globe. Whereas, Art galleries and other institutes can raise money by selling shares of the tokenized art that they own and can further expand their collection without taking out loans at higher interest rates.

Despite these benefits, only 4.8% of art is currently undergoing tokenization, whereas the majority of the physical artwork remains untokenized and illiquid in nature. According to a recent report, the Boston Consulting Group predicts that by 2030, 10% of the world’s GDP could be tokenized, potentially reaching a value of 60 trillion dollars. Among the assets that could be tokenized are numerous privately-owned physical artworks, with a collective value surpassing 2 trillion dollars. If these artworks were to be tokenized, it could open up a new investment market.

Source: S&P Global Ratings

For instance, artists, galleries, and museums can tokenize their art into asset-backed NFTs and use them as collateral or distribute fractional ownership of their art to interested investors, allowing them to raise funds for future artwork creation or capital projects. This approach enables investors to enter the art market at lower price points and diversify their investments, while also providing more liquidity for the art market by allowing expensive art objects to be owned and traded in portions rather than in their entirety.

Moreover, by collateralizing or borrowing a loan against your physical artwork, you can generate liquidity to take advantage of a broad range of financial opportunities, like acquiring additional artwork, financing business goals, taking advantage of other opportunities, and much more.

Fine art is a promising real-world asset, and by tokenizing it, you can not only increase the liquidity of these illiquid assets but also make them accessible to a broader audience.

Besides that, by tokenizing art, you can make the process of buying and owning art more accessible to a wider audience. As art collectors and enthusiasts, they will no longer be limited by physical constraints such as traveling to view art in person or having a large amount of money to purchase a valuable piece of art. The tokenization of real-world art eliminates geographical limitations and enables users from around the globe to access the asset-backed NFTs without any intermediary or third party. Recently, two big bulls of the Web3 & art industry collaborated to tokenize art to make it more accessible and liquid in nature.

Ending Thought

The whole analysis shows that the tokenization of art is the ultimate solution to unlock the latent liquidity of illiquid real-world art assets. By tokenizing art, artists, galleries, and investors can overcome the traditional limitations of the art market, such as limited market access, a lack of transparency, and illiquidity. This opens up new investment opportunities and democratizes access to art ownership, allowing individuals from all backgrounds to invest in and enjoy the beauty of fine art. With the potential for a multi-trillion dollar market, it’s clear that the future of the art world is in tokenization. So, whether you’re an artist looking to showcase your work or an investor seeking new opportunities, the tokenization of real-world art into asset-backed NFTs is a trend you won’t want to miss.

Aconomy is a DeFi platform that aims to tokenize real-world assets with its cutting-edge technology. It benefits both investors and asset owners by empowering them to trade assets on a decentralized exchange, which provides increased accessibility and liquidity.

We at Aconomy are always on the lookout to connect with like-minded individuals, strategic collaborators, and partners who wish to be part of our  journey. To get in touch, please feel free to reach out to us on

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