Michael Novogratz’s company, Galaxy Digital, has created a blockchain version of a 316-year-old violin, turning the historic instrument into a digital asset. This violin, valued at approximately $9 million, belongs to Yat Siu, co-founder of Animoca Brands.
The tokenized violin will serve as collateral for a multi-million-dollar loan, marking one of the most high-profile instances of asset tokenization. Made in 1708, this violin previously belonged to Russia’s Catherine the Great, according to the statement.
Bloomberg reports that Galaxy Digital extended a multi-million-dollar loan to Yat Siu, who purchased the violin at an auction last year. Now, Galaxy Digital has custody of the instrument and has transformed it into a non-fungible token (NFT) 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,” said Galaxy Digital CEO Michael Novogratz.
Converting physical assets to digital ones can enhance their value and allow them to be “fractionalized,” or divided into smaller units for more accessible trading.
This trend of tokenizing “real-world assets” on blockchain platforms is growing rapidly. Estimates from late 2023 indicate that the total value of on-chain real-world assets has hit a record $118 billion, according to Bloomberg.
Though Siu acknowledged that tokenizing the violin was not a necessity, he conceded that it would enhance liquidity. Siu, who has a classical music background, praised the process, noting that this violin is the first of such storied origin to be tokenized.
In an interview with Bloomberg, Siu expressed openness to fractionalizing the violin and allowing investors to purchase a stake. However, he mentioned that there are no immediate plans for this.
For Galaxy Digital, this initiative aims to expand its client base and demonstrate how investors can access and trade claims on real-world assets through 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,” Novogratz stated.
Galaxy Digital’s Digital Labs, part of their investment banking division, led the tokenization process, utilizing technology from GK8.
