Chinese Auction House Yongle to Enter the NFT Market
The rise in popularity non-fungible tokens (NFTs) have seen in the past few months has been unprecedented in the crypto industry. Believed by many to be the future of collectibles and digital identity, the novel token format has taken up the industry by storm, setting records on every corner.
The NFT craze has even gotten through to China, where one of the country’s most established auction houses has said that it planned on entering the market. According to an interview with art publication Artron, Yongle has seen huge potential in the blockchain industry and plans on utilizing the popularity of the new asset class to grow its business.
Zhao Xu, the founder and CEO of Yongle, said in the interview that he was worried about the future of the traditional business model of art. While his auction house has recorded a high turnover in modern and contemporary art last year despite the pandemic, Xu said that the company has already been looking into different financial models to keep up with the market.
The upcoming annual Spring Auction, the company’s biggest auction event of the year, is set to feature works by artist Wu Guanzhoung at a “billion-dollar level.” Aside from being hugely important to the company financially, the Spring Auction is also its biggest PR event of the year, setting the pace for other auctions throughout the year.
In the interview, Xu said that Yongle has been exploring cooperating with other auction houses on blockchain projects. The months-long effort to research blockchain auctions is set to culminate during the Spring Auction, where the company has planned a special session on encrypted artworks or NFTs. He explained that the sale will be done through the traditional auction format and the settlement will be made in RMB or another fiat currency deemed acceptable. Yongle has already been in talks with the relevant authorities to ensure maximum compliance with securities and other laws, he said.
The company plans on following in the steps of Christie’s and Sotheby’s, which Xu believes are “one step ahead” of the competition when it comes to NFT auctions.
When asked whether this was a risky step forward for a company that has mostly focused on traditional art and worked with rather traditional collectors, Xu said that a new market of young people has emerged that makes NFTs an effort worth pursuing. Xu’s own contacts within the crypto and blockchain industries have provided him with a glimpse inside the growing market and shown him that the new art form is here to stay.
“It’s become clear that young people [in the industry] have enough wealth and, more importantly, have the will to collect [art],” he said in the interview. “They are already used to trading and collecting virtual currencies.”