Last December, during Miami Art Week, Arcual, the first blockchain built for the art world by the art world, held its first blockchain transaction live. At an event hosted by co-founders LUMA Foundation and Art Basel’s parent company MCH Group, Arcual announced its first gallery users for its new app. Entitled Arcual Salesroom, it allows galleries like Mai 36 Galerie, Fitzpatrick, High Art, and Von Bartha to create smart contracts featuring royalty agreements, custom payment terms, sales agreements, verified provenance, and digital certificates of authenticity.
“Arcual is well-positioned to solve long-standing challenges and create new opportunities across the entire art community – and we are the first blockchain ecosystem to be purpose-built with these use cases at its core,” said Bernadine Bröcker-Wieder, Arcual CEO.
Arcual launched in 2022 and is a private, permissioned blockchain created to perfectly integrate into the art market, made with technology from Web3 experts BCG Digital Ventures. It was designed with the needs of the art world in mind—artists, galleries, collectors, and institutions. “Arcual was born from a shared recognition of a shift in the production of art and the ecosystem that surrounds it. Arcual will offer pioneering technologies that give artists greater ownership, participation, and transparency in their careers, and will provide both institutions and galleries the tools to best nurture them,” said Maja Hoffmann, Founder of LUMA Foundation.
Artwork, Raúl Cordero, We Want Magic, Not Reality (2020), © Arcual.
That first sale recorded on the blockchain was of a work by Cuban artist Raúl Cordero, represented by Mai 36 Galerie. To learn more about Arcual and how it’s geared to benefit the key players of the art world, Whitewall spoke with Bröcker-Wieder.
WHITEWALL: Before I start, how do I pronounce “Arcual”?
BERNADINE BRÖCKER-WIEDER: I say “AR-kwol.” Put the emphasis on the “Ar.” But whatever inspires you! The primary goal was that it’s international, and not “Art Something.” That has something to do with our positioning as a company, it’s not a protagonist. We are a supporting infrastructure to the galleries and the art fairs and all of the people that actually do the selling. We’re just in the background. We didn’t want a name that took too much attention away. We’re behind the scenes, we’re not in your face.
WW: For you personally, given your background working at the intersection of art and technology, when you were approached to work on Arcual, what intrigued you?
BBW: What intrigued me was the opportunity. I’ve been involved with the art and blockchain space since 2015. I’ve built proof of concepts of ways that it could work. I’ve always seen the potential. Digital infrastructure in the art world is lacking. And these two behemoths [LUMA and MCH Group] are willing to put their neck out on the line and say, “We believe in the future where artists do earn royalties from their work, where there is immutable information about artworks that collectors can hold.” I had a desire to be part of it and make sure that it was done well.
WW: So, it’s an infrastructure for a variety of players in the art world, rather than being a platform, right?
BBW: Exactly. Because smart contracts in the NFT space were defined by marketplaces, people assume we are a marketplace. We are not a marketplace. We do not market artworks, we’re not selling. We’re not building an online viewing room. We’re building the salesroom, which is the place where you go after the viewing room and check out.
We started off with galleries. The use cases are a consignment agreement between the artists and the gallery, and then simultaneously to that consignment agreement the artwork is minted. You have two counter signatories that the artwork exists: the gallery and the artist say this artwork exists, and these are the terms attached to it.
Then when a collector buys through the system, they buy that whole record. It automatically executes any smart contracts attached to that record. Those smart contracts in the primary sale are the percentage that goes to the artist and the gallery. And then in future sales, it can also automatically execute resale royalties. The concept of automatically paying things out and protecting rights, is interesting because often blockchain is used as a word for disintermediation, but it actually can also be used as a protector of the interests of the middleman.
Arcual Launch at Art Basel Miami Beach, © Arcual.
WW: How do you see Arcual benefiting the artist?
BBW: Right now, the gallery acts as a notary for the artist. They’re the ones that are countersigning that the artwork exists, and doing all the admin. You have an organized inventory of your artworks with any information you want to have attached to that artwork—whatever additional information might be important to have stored with that certificate of authenticity. It doesn’t all need to be blockchain-based. It could just be plain text that you want to be stored there.
For the artist, it’s preserving your vision of that documentation you want to go with your artwork. That can be quite interesting for artists that are not working in traditional media, where they might want to have more complicated information added, or if there are elements that are digital, or physical.
Then, there’s the immediate payment of the artist. The artist doesn’t have to wait months before the gallery pays out what percentage they’re supposed to get from the collector sale. They immediately get that payment.
WW: How is Arcual beneficial for the gallery?
BBW: The sales process is much more streamlined, so you have less chasing of invoices, less making sure payments were made. It’s all automatically done. It saves time. You have a direct link to the collector, and you have a record of where that work is going in the future, so you can see if it’s still in the wallet of that collector or if it has moved on.
You can standardize your terms. So, in terms of the legal agreements, you can make it clear this is the agreement we have with the artists, and then you can customize it for specific instances. It’s in your control how you want to run your business on Arcual.
And your gallery name is attached to that first sale. So, if anyone in three-sales time wants to sell the artwork again, they could go back to the original gallery. The last thing is you can add a resale royalty for the champion gallery. They’re the ones taking the risk on the primary market work. It’s more customizable than a lot of the smart contracts that were on the NFT marketplaces.
WW: And finally, for the collector, why should they purchase a work with Arcual?
BBW: As a collector, you buy knowing that the artist will be immediately paid out. You own within your wallet directly the documentation of the artist and if you ever want to sell it again, you can very clearly prove that you bought it. It’s very straightforward.
Arcual Launch at Art Basel Miami Beach, © Arcual.
