Maecenas is a new startup that is going to financialize fractions of Art Masterpieces. The current process of buying and selling masterpieces is limited because it has become a billionaire’s playground with information unequally distributed among market participants. Maecenas are harnessing the internet, the blockchain and the power of the crowd to make the Art market more efficient and transparent. On Maecenas, sellers will list their works of art and investors can buy a fraction of these masterpieces. This will be carried out at a fraction of the cost using the traditional systems of buying and selling art. In this interview, Marcelo, GarcĂa Casil, founder of Maecenas, shares his passion for building this distributive start-up.
What does the word Maecenas mean?
It comes from Gaius Maecenas, an advisor to the Roman emperor Augustus. Gaius has become a byword for a wealthy and generous patron of the arts.
What will change in the art world the day after Maecenas is launched?
The fine art industry won’t be transformed overnight, but the day Maecenas launches it will be the beginning of a more open and fair market where investment opportunities will be made equal to everyone willing to participate. We will bring the Picassos and the Monets within the reach of everyone.
Can you give a practical example where Maecenas is more efficient than any other alternative?
Take an example of an investor looking to build a diversified portfolio of blue chip fine art pieces involving different periods and different artists. The bottom end of this type of artworks would be just below the million dollars for each piece. Building such a portfolio would require circa $10-15 million dollars of investment, which means that very few wealthy individuals could do it. Maecenas, by enabling the trading of shares of artworks, makes this available to a much wider range of individuals since investments in the art can be as low as $5,000 for each piece, and in future, we will allow even lower ticket sizes. In addition, the platform will accept cryptocurrencies, therefore, allowing crypto-investors to tap into an attractive asset class like fine art.
Is Maecenas a useful tool for art galleries?
Absolutely. Galleries benefit from using Maecenas as a sales and promotion channel, adding value to their existing services and enabling their artists to reach a much wider audience.
What are the criteria for art pieces to be listed in Maecenas?
We have a stringent vetting criteria to ensure that we only bring the highest quality of assets into the platform. Artworks must be stored in safe locations (typically international free ports like Le Freeport in Singapore or Geneva Freeport in Switzerland), they must have appropriate insurance in place and have spotless provenance records to ensure their authenticity. As part of the onboarding process, we run some checks involving independent reputable experts. Artworks listed on the platform will typically start at the $500k range up to $5m or more. At a later stage, we may work with emerging artists to support them give them exposure to an international audience.
What kind of art will be listed? Will stamps and numismatic coins also be listed?
Initially, we will focus on paintings and sculptures as we feel that this is the segment that will attract more demand. However, we may move into other collectables as long as there is enough demand and we can source high-quality items.
At what stage is the platform?
We’re currently in alpha stage and are getting closer to launching the beta version that will involve a small number of private investors who’ve already signed up to the platform.
How will users be able to access the platform?
Our platform will be available globally 24/7 via our web interface. We may introduce a native mobile version at a later stage.
What role will the blockchain play in this project? Will you use an existing blockchain, if so which one?
Blockchain plays a key role in Maecenas. Firstly, it allows us to create a tamper-proof provenance record of all artworks listed on the platform, which is quite fundamental as it addresses one of the key issues this industry has which is the authenticity of artworks. Secondly, pieces of art listed on the platforms are tokenised meaning that shares of artworks are 100% digital and can be easily traded in an open and fair marketplace. We also rely on smart contracts to settle transactions and to replace most of the traditional roles in financial transactions like escrows, clearing agencies and so on. Using smart contracts not only dramatically reduces the overhead and associated costs but also creates a level of transparency in the art market that is unprecedented and that it will profoundly transform the way people invest in art, very much like ICOs or token crowd sales are transforming the way startups raise funding.
Another key advantage we’re leveraging from blockchain technology is using smart contracts for our art auctions. We are implementing this on Ethereum, and we’re defining a Dutch auction system in chain code meaning that the entire process is fully transparent and fair for participants. Art auctions have a bad reputation for their prices being manipulated and rigged, so using smart contracts will allow us to fix that.
Where will the art be stored?
Artworks will be kept in the safest vaults in the world. We are partnering with freeports worldwide to streamline the process of storing art listed on our platform. One such example is Christie’s Fine Art Storage Services which has vaults in New York and Singapore. These facilities have top grade security and are regarded as the safest in the world, which benefits investors as the insurance premium is, as consequence, very low
What kind of insurance will be needed by the legal custodians?
We’ll work with tier1 insurance companies like AXA Art to ensure the assets are covered well more than their market value. The insurance policy itself is fairly standard, and the fact that we will use vaults for storage makes it even simpler as it significantly lowers the risk of theft or damage.
Will it be open to international investors?
Yes. Investors worldwide can invest through Maecenas as long as they pass our standard KYC process.
Do you envisage to open for the retail investor in the future?
Our long term vision is to fully democratise access to fine art. Making this available to retail investors is, therefore, a key part of achieving that vision, and it is, in fact, part of our roadmap. The retail offering will start with cryptocurrencies given their low friction, low fees and global reach.
If an art piece is owned by 100 investors, and an outside investor wants to buy them all out. Can one investor hold the deal asking for a higher price?
The process of buying back a listed art piece will be very similar to how an investor acquires a public listed company. An offer is made, and a certain majority of the shareholders must agree to it (this is generally 80-90%). So a single investor couldn’t hold the deal unless they owned a significant stake in the art piece.
What can you share about the financial situation of Maecenas?
Maecenas has no debt at the moment, and we’ve so far operated on a self-funded basis for the most part excepting for a minor investing from family and friends. There isn’t much going on regarding cash flows because we haven’t launched yet and we are also keeping our burn rate as low as possible. Polytech Ventures, the Swiss VC that is backing us has been helping us for a long time actually as they are the company behind the Fintech Fusion acceleration programme that we graduated from last September. So they know all the core team, and they have seen our progress so far and our potential, and this is the reason they are backing us. They want to help us grow and become the largest and most trusted fine art platform in the world.
Do you have specific art pieces waiting to be listed?
We do have a short list of pieces waiting to be listed on the platform. We can’t disclose names due to confidentiality agreements, but I can tell you that everyone will be very excited when we announce them!
What should investors be aware of regarding the upcoming ART token crowdsale?
We’re launching our ART token in partnership with Cofound.it which is the leading token crowdsale platform and also the most trusted one. They have a large and growing community in the range of 5,000 members who are very passionate and engaged. The founding members of Cofound.It, Jan and Daniel, are very professional and have a wealth of experience with token crowd sales having so far successfully launched three ICOs raising circa $50M worth of cryptocurrency combined (ICONOMI, Cofound.it, Santiment).
The ART token crowdsale is likely to happen during early September. We’ll announce the exact date soon.
To find out more information about Maecenas visit:
We thank Marcelo Garcia Casil for the interview.
