Markets
Novogratz’s Galaxy Digital Tokenizes 316-Year-Old Violin for Delayed Loan
- Mike Novogratz’s company tokenized an 18th-century violin as collateral against a loan, Galaxy said in a press release.
- Instrument tokenization is a way to increase liquidity and make it more available to interested investors.
- The multi-million dollar loan deal was reached with Animoca Brands co-founder Yat Siu.
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Cryptography-focused company Galaxy Digital has tokenized an 18th-century violin, creating a blockchain version of the instrument to use as collateral for a multimillion-dollar loan. Bloomberg reported.
According to a Press releaseThe violin is a 1708 Stradivarius that once belonged to Russian Empress Catherine the Great, purchased last year at auction by Animoca Brands co-founder Yat Siu and valued at more than $9 million.
It is now in the care of Galaxy, who have given Siu a loan and are using the violin to support him. Additionally, the company created a non-fungible token of the instrument, which also serves as collateral.
“By starting with cutting-edge assets like this violin, we are creating a process that will transform how an entire range of assets are managed, valued and traded in a digital economy,” Galaxy CEO Michael Novogratz said in the statement.
For the uninitiated, tokenization is a booming practice where traditional real-world assets are packaged as tokens to be traded on blockchain platforms. According to a late 2023 estimate, the total value of real-world assets on-chain has already surpassed US$118 billion.
Making things digital means these assets benefit from greater liquidity and can be fractionalized — or divided for more accessible trading.
Speaking to Bloomberg, Siu indicated that violin tokenization was not a necessary step, but a way to obtain additional liquidity. He added that he is open to eventually fractionalizing the tokenized instrument, allowing investors to purchase a right. However, there are no current plans to do so yet.
On Galaxy’s part, offering such loans is a way to reach new clientele, which it has gained from the rise of crypto markets, Bloomberg said. Otherwise, the company already has a division that grants loans.