Tokenization and Regulatory Compliance for Art and Collectibles Markets: From Regulators’ Demands for Transparency to Investors’ Demands for Privacy

Abstract

Art and collectibles markets tend to involve lower liquidity and higher fees than public equity markets. Distributed ledger technology can tokenize artworks and collectibles, so that claims to these assets can be exchanged digitally without intermediaries. Tokenization offers investors access to a global market plus a digitized paper trail, as well as new options for the fractional ownership of artworks, art-collateralized loans, and yield-bearing art assets. The main challenge for tokenization researchers and platform developers is to simultaneously satisfy regulators’ demands for transparency and auditability as well as art investors’ demands for privacy. New technological solutions are required that enable market participants to disclose the absolute minimum amount of information that is demanded by regulators. We investigate how distributed ledger technology, cryptography, and digital identity management can help address this challenge.

Probably something: a multi-layer taxonomy of non-fungible tokens

“…Shielded NFTs allow numerous attributes to be concealed despite the inherent transparency of blockchains, including ownership relations and transaction history (Babel et al, 2022). Shielded NFTs are typically implemented with zero-knowledge proofs, which allow the verification of concealed attributes without revealing them (Barbereau et al, 2022;Sedlmeir et al, 2022). As a token, at any specific time, is either shielded or not, we deem the dimension mutually exclusive.…”

“…, 2022). Shielded NFTs are typically implemented with zero-knowledge proofs, which allow the verification of concealed attributes without revealing them (Barbereau et al ., 2022; Sedlmeir et al ., 2022). As a token, at any specific time, is either shielded or not, we deem the dimension mutually exclusive.…”

Harvesting, Tokenizing, and Sharing the Influence of Planetary Abundance to Mitigate the Global Debt Catastrophe

“…Asset tokenization offers many key benefits, such as (Barbereau, et al, 2022): • Increased efficiency: since a blockchain is a trustless ledger, complex rules can be directly coded into tokens.…”

Enabling end-to-end digital carbon emission tracing with shielded NFTs

“…Implementation section). Such a splitting of distinguishable objects between multiple entities has already been suggested, for instance, in the context of art markets and creative work (Barbereau et al 2022;Whitaker and Kräussl 2020) and real estate (Sunyaev et al 2021;Bechtel et al 2022). We aim to apply fractional ownership to facilitate the splitting and aggregation of CO 2 emission information in the electricity system's supply chain.…”

“…Most of the related work focuses on non-fungibility since it enables the traceability and verifiability of CO 2 tokens according to their origin, but the uniqueness of the tokens and transactions increases the ability to attribute stakeholders to their pseudonymous wallet addresses on a public blockchain ledger and is, hence, problematic both from the perspective of organizations and individuals (Sedlmeir et al 2022;Biryukov et al 2014;Schellinger et al 2022). On the other hand, privacy-oriented, blockchain-based solutions, such as Sasson et al (2014), or solutions that adapt similar approaches in energyrelated use cases (Baza et al 2021), require that tokens are indistinguishable (fungible) to make transactions unlinkable (Pfitzmann and Hansen 2010), compromising the ability to trace and differentiate different emission sources or to hold stakeholders accountable for malicious behaviour.…”