By
Chimamanda U. Martha
April 17th, 2024
The new secondary art NFT marketplace by Sotheby’s also pays royalties from sales directly to the artists, from payments made by collectors.
Sotheby’s has launched an on-chain non-fungible token (NFT) marketplace that facilitates the sale of secondary digital art items. According to Decrypt, the New York-based auction house now supports secondary NFT sales, allowing artists to transact directly with collectors. For example, interested collectors can list and make offers on work from select artists.
The next evolution of #SothebysMetaverse is here! The most trusted and dynamic destination to collect, buy and sell remarkable digital works.
Explore: https://t.co/hZvYIkO3xx pic.twitter.com/dCkaCKlXVm
— Sotheby's Metaverse (@Sothebysverse) May 1, 2023
Sotheby’s Vice President and Head of NFTs and Digital Art, Michael Bouhanna, discussed the secondary NFT marketplace. According to Bouhanna, the offering marks an essential step in Sotheby’s evolution within the decentralized technology and Web3 space.
More on Sotheby’s Secondary NFT Marketplace
The Web3-embracing Sotheby’s peer-to-peer and fully on-chain secondary NFT initiative launched Monday on the auction house’s Metaverse platform. This latest addition supports NFT artwork minted on the Ethereum blockchain and scaling protocol Polygon. In a statement, Sotheby’s described both popular all-encompassing blockchains as the “networks of choice for NFT creators and collectors”.
Sotheby’s Metaverse secondary sales are wholly facilitated by automated smart contracts that accept ETH and MATIC as payment for art collectibles. Powered by Serotonin-developed NFT tech and commerce suite Mojito, Sotheby’s Metaverse platform initially went live in October 2021. The popular auction house’s marketplace differs from OpenSea’s broad-scale, peer-to-peer NFT platform in terms of offerings. According to Sotheby’s, the value proposition of its NFTs is in the “rotating, curated selection of leading artists” carefully selected by its specialists. Furthermore, the British-founded American venture pointed out that its selection of secondary marketplace artists will change every few months.
Sotheby’s also revealed that its initial wave of artists would see collectors list and make offers on NFTs from 13 creators the company deems as pioneers. These digital art world leaders include Claire Silver, Tyler Hobbs, Sam Spratt, Diana Sinclair, Sofi Crespo, The Sarah Show, and XCOPY.
Secondary Marketplaces & On-chain Royalty Fees
The secondary sales NFT marketplace is set up in a way that rewards artists via specified secondary on-chain royalty fees. Sotheby’s explained it will subtract a creator royalty fee from any secondary sales, typically 5% to 10% of the sale price. This fee is automatically paid into the artist’s wallet as broader discussions regarding NFT resale royalties take center stage.
For instance, in late March, generative art NFT platform Art Blocks debuted its NFT marketplace with enforced creator royalties. At the time, Art Blocks said it would not receive any platform fee for secondary trades through its marketplace. Instead, the company looked to honor artists’ own specified creator royalties.
In March, Art Blocks founder and chief executive officer Erick Calderon exposited further, saying:
“We are here to support the artists and the artists’ practices. How many artists had quit their jobs to be full-time artists because they were just thrilled with the idea of getting to pursue this?…The creator economy is empowering the creator with control over their own creation.”
At the time, Calderon added that the most compelling thing in the secondary marketplace is a creator who provides a meaningful reward.