Galaxy Digital and Animoca Brands Use Tokenized Stradivarius Violin as Multimillion-Dollar Loan Collateral
Summary:
Galaxy Digital, led by Michael Novogratz, and Animoca Brands co-founder Yat Siu have utilized a tokenized 1708 Stradivarius violin as collateral for a multimillion-dollar loan. The violin, which was originally owned by the Russian Empress Catherine the Great, was converted to a nonfungible token (NFT) by Galaxy Digital. This represents a shift in cryptocurrency lending, showing that physical assets can be tokenized and used as collateral.
A 1708 Stradivarius violin owned by Animoca Brands co-founder Yat Siu and tokenized by Michael Novogratz's Galaxy Digital, has been utilized as a guarantee for a multimillion-dollar loan. Galaxy lent an unspecified sum to Siu on June 4, using his exquisite, centuries-old instrument as backing. The violin was transformed into a nonfungible token (NFT) by the digital asset organization, which will keep both the NFT and the physical instrument until the loan is repaid. Although the value of the loan wasn't disclosed, it was confirmed to be in the millions. The violin, which previously belonged to Empress Catherine the Great of Russia, is in the custody of a Hong Kong-based preserver until both Siu and Galaxy authorize its release. Its history, spanning over three centuries, has been meticulously documented by Tarisio, a musical instrument auctioneer. Siu successfully purchased the rare instrument at an auction last year, shelling out in excess of $9 million. Thomas Cowan, Vice President of tokenization for Galaxy, stated in a Bloomberg interview that the capability to tokenize physical items could alter the landscape of cryptocurrency lending. As per Cowan, tokenizing tangible goods allows them to extend higher loans to their customers, even when the collateral is a volatile asset like Bitcoin or Ether. He anticipates the principle could extend to other assets like real estate in the future. As NFTs offer a path to tokenize physical goods, it's important to note that trade for digital collectibles suffered a decline recently. NFT sales fell 54% in May, according to data from CryptoSlam. Despite hitting a high of over $1 billion in April, NFTs sales in May totaled only $624 million. There were marked declines in sales across major NFT blockchains, including Bitcoin, Ethereum, and Solana.
Published At
6/4/2024 10:39:09 AM
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