Summarize

Mākslas pasaules globalizācija un blokčeina tehnoloģijas iespējas veicina mākslas un tehnoloģiju apvienošanu. Tehnoloģiskie, inovatīvie projekti kļūst par dabiskajiem risinājumiem mākslas tirgus ierastajām problēmām: uzticēšanās un skaidrības trūkumam un augstajām darījumu izmaksām. Mēs runājam par caurspīdīguma un uzticības jautājuiem, kā arī ar mūsdienu tirgus iespējām ar Dmitriju Slabodčikovu, COART platformas dibinātāju un vadītāju.

Intervija tiek publicēta oriģinālvalodā.

- Dmitry, you are the active participant of the art market and many trends you can see internally. How do you think, what is the current place and the future of the blockchain-based and other high-tech projects?

- Thank you for your question, Irina. New technologies have only recently started to make their name in the art world. Up till now there have been just a few practical cases where blockchain technology has been used, but more than thirty projects have announced launching based on blockchain solutions in one way or another or adopting their models to the opportunities the blockchain technology (also called a distributed ledger) is providing.

By the way, when talking about the new technologies, I do mean not only blockchain, but also Artificial Intelligence (AI), deep machine learning and deep neural networks.

For instance, one of the most promising AI-based projects in the field of artwork identification is Automated Analysis of Drawings at the Stroke Level for Attribution and Authentication, developed by the researchers from Rutgers University and the Atelier for Restoration & Research of Paintings in the Netherlands. This algorithm powered by AI can spot a fake just by looking at the strokes used to compose a piece. Analysis is based on the strokes that were important to identify the artist (system broke down almost 300 line drawings by Picasso, Matisse, Modigliani, and other famous artists into 80,000 individual strokes).

Lets ask ourselves a questions – if a neural network can learn to tell the difference between the fake and the original based on “fingerprints” of the artist, which are expressed by force and character of the brush strokes on the canvas, what might be the next step? Might those be new works, non-author’s but identical in style to Shagal, Dali, Rotko, Rubens? Indeed, by learning the master’s manner in details, the algorithm can reproduce it when creating the new canvas. With any required subject. A good question, isn’t it? Does this cause anxiety among living, acting artists?

We do think that answers to these questions will reveal themselves quicker than we can imagine now. In different countries people not acquainted with each other without any prior arrangements come up with the same ideas and launch new projects at the intersection of modern technologies and art field. Primarily for those enthusiasts we are developing our open source Platform.

- What are the most ground-breaking opportunities these projects are providing? How is it achieved?

When using blockchain technology – this is mainly transparency, not in a sense of disclosure of beneficiaries, but primarily in a sense of unambiguity and invariability of all the money moving, title and physical or digital art objects. Secondly, this is an opportunity of fractionation - splitting in digital shares – possession certificates - of the high-priced art objects, which are rising in value for the last 40 years – the term of fixation of auction sales with the modern computers. This has given us the necessary data volume for statistical evaluation of the Art market growth dynamics both in overall and for selected directions. This means direct access to the top segment of the Art market for minor investors and traders all around the world, which can increase the overall capitalization volumes of the art market by times just in a few years.

- What were the preconditions for you personally to initiate and create the COART?

The art market has always been my love. This market is familiar to me. I have interested in it for a long time. When I was the CEO at agency that has been organizing private and business events for high-net-worth individuals for more than 15 years, I got acquainted with different painters, gallery owners, art dealers and museums staff.

I witnessed how the price for the artworks of some painters I knew, like Timur Novikov and Georgy “Gustav” Guryanov, grew 10-20 or more times in just 8-12 years.

I have also begun to sell paintings of familiar artists to my wealthy clients, and have studied the mechanisms that have developed in the field of art nowadays (including the mechanics of auction bidding, and the relationship between artists and art dealers etc).

- How did you form your team?

I started to form a team in Spring 2017, when it became clear that blockchain, as a technology, allows to easily and handy solve certain key questions of the business-model of the project which I had been developing for over 2,5 years at that time. It was a general business process. Someone came, someone went, people changed as well as the circumstances, but business went forward. And now we do have very good team, without exaggeration, which is ready to launch our project on a qualitatively new level. This is what we are currently getting ready for!

- You are coming from Russia, living in Lithuania, having a company in Estonia. How did you choose the jurisdiction for your project not directly connected to your place of living?

That’s easy. We do not have any legal relationships with Russia. The only link is that I came from Russia to Lithuania about seven years ago and other pre-seed investors and team members have Russian names. However, we are not a Russian project.

The main part of the core team lives in Lithuania, therefore we are opening the second company of the group here. It will be a development department of the basic Estonian company. We chose Estonia in January 2018 due to certain provisions of the economic regulations and a bit more loyalty toward crypto-projects, which was on the front burner at that point of time. Now, after we have deleted the abbreviation ICO from all our documents, sell no more tokens and still attract funds from private investors, which obtain shares of the company, we might have opened the basic company also in Lithuania. However, now the change of jurisdiction is just not needed.

- What is then COART about? What the user can do with the help of your platform?

COART lowers the barriers for retail investors to invest in art assets using co-investment. Currently, investment in high-end artworks (valued at $0,5 M and above) are prohibitively high amount, so only wealthy collectors, family offices, and investment funds can afford to do so.

COART proposes a special mechanism using blockchain technology that lowers the barriers to entry for retail investors and traders who have an interest in investing in art, but at lower capital entry requirements. Moreover, COART represents something else, something broader.

Participants of the Art market know that the existing system objectively does not correspond to the present needs, it is not transparent and too enclosed, what makes access to the art market difficult for the new artists and those who are interested in investing in art-assets. We are going to create the new and equal opportunities for all participants of the Art market, from artists to investors.

We are building a new specialized Collaborative Art (COART) blockchain infrastructure, a platform for launching hundreds of new projects in all segments of the Art market.

Artists and art dealers who represent them will have a direct access to the global art market for self-sale of their works, or will be able to raise funds for the creation of new works.

Gallery owners and museums will get a new way to raise funds for their needs, it will be much more convenient when compared to all the existing opportunities.

Auction houses and investment Art Funds will receive new customers - retail investors and traders, to whom direct access to the art market will be provided by COART.

In fact, all participants of the Art market are the Target Audience of COART.

Moreover, I’m sure that COART advocates the idea that artists can change the world for the better. At the first glance, it may seem that COART is just a commercial project, but It's not quite the truth. In fact, we are building a new Ecosystem, which will provide the possibility of charitable donations, as a small percentage of each transaction, at the level of the basic code. Charitable donations that will arrive at the accounts of those who directly implement charitable programs automatically and decentrally, bypassing the accounts of any Foundations and without a need for intermediaries.  

- When you write or talk about COART you stress that it is based on EOSIO software. What does it mean?

COART blockchain infrastructure (COART) will be created based on EOSIO software (MIT license) with BID token as a system token and all necessary customisations to fulfill platforms technical, functional and non-functional requirements of Art market. COART will be made available to public fine art and digital art community needs and dPoS consensus protocol will be used for governance.

COART is similar to EOS-Mainnet infrastructure, but it is adapted to the specifics of Art market for the reorganization of all segments of which COART open source protocol is being created. COART will be the flexible infrastructure for investment into art assets and for tokenized assets management.

Vytautas Kašėta, chief visionary at COART, is part of the development team of EOS Lithuania.

We are sure that most of the projects on COART infrastructure will be created by COART Community developers who will be part of the EOS and Art market community, just as it is done on EOS-Mainnet.

We are well aware of how EOS-Mainnet works and we believe that such a structure is what the Art market was waiting for art asset tokenization to go mainstream.

Provenance distributed ledger, containing all known data on the history of ownership and exposure of specific art objects, decentralized original data distributed storage, security tokens of art assets (ART-ASSET tokens), payment platform, special ART-ASSET tokens exchange, stable coin mechanics and liquidity provider system for easy entry point for all the different art market stakeholders are also going to be implemented on top of EOSIO software.

- What should a user have (what technical equipment, knowledge, experience) in order to use your product?

The users will have to have special online wallets to enter the system. We might say that COART wallets are the points of “inlet and outlet”, or more precisely input and output of funds, uploading to the system or downloading from it (for self-keeping) those digital stocks – possession certificates – of the particular art objects. But this is all inside. Outside the general user see on the desktop user-friendly interface and accustomed payment form, which is almost identical to the online payment acceptance modules. The user will not need to have, nor to obtain any special crypto-currency, whatever it thought by it. The user can pay for the purchases and services inside the ecosystem by any electronic money which are legally circulating in his/her region.

- Should a user have virtual money and a wallet for all the products your platform is offering? Could he/she use the part of the products (for instance, electronic provenance) staying otherwise in a “real world” and paying in real money?

For all the services anybody can pay with general money. Moreover, the large amount of services is free of any charge. In particular, references to those COART open source protocol subsystems, which you probably mean by “electronic provenance”:

COART distributed storage subsystem (COART-STR) capable of storing and securing access to digital originals of fine and digital art assets, made available to art experts used as a base for asset tokenization and object identification, including 3D scan vault that will be created to secure the digital original copies of art assets.

COART provenance ledger subsystem (COART-DLT) an open brochure-catalog containing information about all the art assets passing through COART ecosystem, eliminating the possibility of their subsequent forgery or double sale and providing transparency of transaction.

- How can a user get acquainted with the provenance of the particular artwork, which is stored on blockchain? What should he/she do for it?

The user should look at COART distributed storage subsystem (COART-STR) and not only get acquainted with the provenance, but also make sure that in front of him/her there is the same artwork, the digital “cast” of which is stored in storage subsystem, eliminating the possibility of a fake or double sale of one and the same work.

- If a user is an owner of an artwork and wants to enter the information about any actions with this work on blockchain, what should he/she do? Is this record available only to the users of COART or anyone can get acquainted with it?

All actions with art objects, once recorded in the system, are automatically fixed in COART provenance ledger subsystem (COART-DLT)

- Are other art platforms (for instance, with electronic provenances) compatible with your platform?

The thing is that COART is primarily the open source protocol, which is specially constructed for the needs and specifics of the art market. In other words, this is an open code software, meaning that any volunteer can open his own marketplace, auction or art fund, using our ready-made technical and legal solutions. Moreover, we are expecting a range of projects previously announced to be launched on the basis of Ethereum network will change their mind and will be launched on the basis of COART, as a specialized modification of EOSIO software with its own infrastructure.

- What is the added value COART is offering for each of the art market participants: collectors, art dealers, auction houses, museums, investment funds, retail investors, traders?

COART is going to create the new and equal opportunities for all participants of Art market, from artists to investors. Artists will have a direct access to the global art market for self-sale of their works, or to raise funds for the creation of new works.

Gallery owners and museums will get a new way to raise funds for their needs, it will be much more convenient when compared to all the existing opportunities.

Auction houses and investment Art Funds will receive new customers - retail investors and traders, to whom direct access to the art market will be provided by COART.

In fact, this is a real transformation of the whole Art sphere. All participants will benefit!

- What forms the COART ecosystem?

- Is there still anything that can be done offline?

Everybody can bring their work for identification, storage, or come to the museum to look at the artworks obtained by thousands of minor investors and exhibited in the world leading museums.

- How the COART is collaborating with institutions, other art market members and (if any) other blockchain-based art projects?

We are open to dialogue with almost all players of the market, both the Art market, the financial and investment market and the blockchain industry.

We are going to exclusively offer museums to include in their expositions those high-level art objects that tens of thousands of retail investors will purchase using co-investment mechanisms offered by COART Investment Art-fund and other funds and organizations using the new COART open source protocol for the joint acquisition of art assets by large groups of people who are not familiar with each other. The best way to convince thousands of co-investors is to make an asset as accessible as possible, isn’t it. What could be better than the walls of a famous museum for this?

Secondly, COART will provide an access to works previously hidden in private collections or closed storages for art lovers. This possibility is an important part of the idea of the public movement “Renaissance 2.0”, which COART fully supports and for the implementation of which creates an expert community of a new type. This is a very important element of the COART ecosystem.
Statistics show that more than 90% of high level art assets (worth from 1M $ and above) are purchased for investment purposes.

First of all, we are talking about the art of the 20th century. 20th Century Art accounted for 80% of the total global auction of Fine Art in the first half of 2018

There are calculations showing that the direct access of retail investors and traders to participation in the trades of the top segment can increase the total financial turnover of the Art market by several times. COART is going to collaborate with leading auction houses to provide legal and financial access to auctions for small investors. We will repeatedly increase the number of bidders, attracting millions of new investors, which will inevitably cause a rise in the cost of top lots.
Moreover, COART represents something else, something broader.

We are introducing new approach to the Art market for collectors, art dealers, gallery owners, art experts, auction houses, museums, investment funds, retail investors and traders.

Our aim is to connect a huge, but very conservative Art market, with the technological capabilities of a rapidly growing investment and traders markets.

Within the framework of this new ecosystem the Art itself will be on the first place again, as a manifest of man's creative potential. For the creation of such ecosystem we are developing COART open source protocol, as a specialized blockchain with its own infrastructure based on EOSIO software.

Additionally, we will collaborate with traditional logistics and insurance companies that specialize in the Art market. Non-profit Organization engaged in the transportation and exhibiting of acquired art assets using the COART payment platform, while ART-ASSET tokens of these art assets are freely traded on licensed securities exchanges. We think that  such collaborations and partnerships are imperative to our success and logical to form. Together we can create a new Communication sphere which solves the problems of provenance, transparency, and liquidity in the fine art industry and lowers the barriers to entry for new artists, art lovers, retail investors and other participants of the Art market.

- What are your main competitors? What marks COART out?

We do not have any direct competitors on the market now. Nobody but COART offers a complex, infrastructural solution, based on the EOSIO base code.

We are introducing new approach to global Art market for collectors, art dealers, gallery owners, art experts, auction houses, museums, investment funds, retail investors and traders.

Our aim is to connect a huge, but very conservative Art market, with the technological capabilities of a rapidly growing investment and traders markets.

We are building a new specialized Collaborative Art (COART) blockchain infrastructure, a platform for launching hundreds of new projects on all segments of the Art market. Unlike most of the existing projects that are still running or claiming to be launched on the Ethereum platform, we are creating totally new ecosystem based on EOSIO software.

Thanks to the creation of EOSIO and the successful launch of the EOS-Mainnet infrastructure, the necessary conditions exist for the development and rapid deployment of a specialized blockchain-protocol that takes into account the specific needs of the Art market.
Participants of this market know that the system developed over the previous centuries objectively does not correspond to the present needs, it is not transparent and too enclosed, what makes access to the art market difficult for the new artists and participants interested in investing in art-asset

- Out of all the functions COART is providing, which are already working or when do you plan them to start working? What can the CoArt users do already now?

Here you can find our detailed schedule for the nearest time until full entrance to the market.

Currently we are raising the community and developing the product.