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The artwork, whose ownership was minted onto the blockchain in October 2021, was acquired by more than 60 investors who are receiving an annualized ROI of ~15% [i].

"After many years of managing investment fund structures, the experience with tokenization has revealed that the fundamentals of the art trade remain the same in terms of quality, provenance, conditions and pricing, and fractional artworks ownership via a blockchain perfects the direct ownership without costly intermediaries," says Javier Lumbreras, CEO of Artemundi.

"The sale of Fillette au beret, the first Picasso painting to be tokenized, has made the benefits of tokenization tangible for tokenholders: this includes access to unique art investments, portfolio diversification opportunities and the potential for significant returns," acclaimed Fatmire Bekiri, Sygnum's Head of Tokenization, on the successful conclusion of the investment cycle of this pioneering Art Security Token (AST).

A pioneer operation with successful results for investors

Artemundi and Sygnum Bank partnered in 2021 for this tokenization project. It marked the first time the ownership rights for a Picasso were broadcast onto a public blockchain by a regulated bank, enabling investors to purchase and trade "shares" in the artwork called Art Security Tokens (ASTs).

ASTs facilitate access to digital marketplaces and reduce barriers to entry for the art market. Under Swiss banking regulation, institutional and private investors could buy, sell or trade fractionalized ownership of Picasso's Fillette au beret (PIC1), starting from CHF 1,000 per token on SygnEx, Sygnum's blockchain-based organized trading facility (OTF).

An artwork with several owners can be bought and sold seamlessly

The process of buying and selling the tokenized artwork was very similar to the traditional methods, though blockchain technology has made this process more secure, compliant, and efficient. After receiving an offer for the painting from a potential buyer - above the initial price - this was communicated to tokenholders for a vote on the sale. With more than two-thirds of investors in favor of selling, Artemundi, and Sygnum Bank executed the deal.

Net of fees related to the sale, Artemundi distributed the proceeds to the token holders' wallets at Sygnum Bank, which happened at exceptional speed thanks to smart contract technology. With a smart contract, the ownership title is only transferred when the entire purchase price has been received by the seller from the buyer.