Crypto billionaire Novogratz tokenizes 316-year-old violin

Michael Novogratz’s firm, Galaxy Digital, has tokenized an over 300-year-old violin, creating a blockchain version of the musical instrument. The violin belongs to Animoca Brands co-founder Yat Siu and is valued at around $9 million.

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This will be used as collateral for a multi-million-dollar loan facility, in what has been referred to as probably one of the highest-profile tokenizations. Made in 1708, the 316-year-old violin used to belong to Russia’s Catherine the Great, according to their statement.

Tokenizing physical assets boosts liquidity

According to a Bloomberg report, Galaxy Digital lent millions of dollars to Yat Siu, who bought the violin last year at an auction. But the musical instrument is now under the care of Galaxy, who turned it into a non-fungible token to back the loan.

“By starting with high-end assets like this violin, we’re creating a process that transforms how a whole range of assets are managed, valued, and traded in a digital economy.”

Galaxy Digital CEO Michael Novogratz

Turning physical assets into digital assets enhances their value and can be “fractionalized” or subdivided into smaller units for affordable trading.

The trend is fast-growing, with “real-world assets” being packaged as tokens that trade on blockchain platforms. According to Bloomberg, estimates from late 2023 reveal that the total value of on-chain real-world assets has reached a record of $118 billion.

1/ I am excited to announce the tokenization of the 1708 Golden Era Stradivarius previously owned by Empress Catherine the Great as an example of the potential of unique RWAs together with @novogratz @galaxyhq preserving history in the process on-chain https://t.co/jGHwifbm6N pic.twitter.com/SHGhVVdYDm

— Yat Siu (@ysiu) June 4, 2024

Novogratz’s firm sets precedent

Although Siu said tokenizing the violin was not necessary, he admitted the move would enhance liquidity. Siu, who also has a background in classical music revered the process adding the violin became the first such instrument “of such storied origin” to be tokenized.

Speaking with Bloomberg, Siu indicated he was open to fractionalizing the violin and allowing potential investors to purchase a claim. He revealed, however, that there are no such plans yet.

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As for Galaxy Digital, the initiative will broaden its clientele reach and set an example of how investors can access and purchase a claim on real-world assets on digital platforms.

“By tokenizing this Stradivarius violin, we are not just preserving the legacy of one of the world’s most precious musical instruments, but we are also setting a precedent for how the latent value of real-world assets can be accessed and utilized,” said Novogratz in a statement.

Galaxy Digital’s investment banking’s Digital Labs spearheaded the tokenization process while the technology used came from GK8.

Cryptopolitan reporting by Enacy Mapakame