Codex, a cryptocurrency and decentralized title registry for the $2 trillion dollar arts and collectibles asset class, has announced its provenance-based protocol that addresses the most pressing challenges faced by the industry.
Unlike other major asset classes, arts and collectibles lack a title registry, hampering the ability to buy, sell, securitize, insure, and lend against the asset class. The Codex Protocol will be powered by the BidDex Token, which will be released in a token generation event (TGE) in early 2018.
“The global art & collectibles market is approximately $2 trillion, yet today there is no way to prove who owned what, when,” Codex CEO Mark Lurie said.
“This is especially important in art and collectibles, because almost the entire value is based on provenance and authenticity. Collectors have always balked at disclosing their assets to a central authority. Now, with the blockchain, they can prove ownership without compromising privacy. This will enable art and collectibles to flourish as a financial asset class, resulting in a larger, better, and fairer market for collectors, intermediaries and artisans.”
Codex’s application Biddable will enable holders of cryptocurrency to bid in auctions and will increase privacy and access for all bidders through a title-escrow system. Providing direct access to the market, Biddable will drive Codex adoption from both sides of the arts and collectibles auction market.
Auction houses lose substantial revenue to bidders who renege on items they win, forcing them to require extensive financial disclosures from potential bidders just to participate. Aside from being invasive, up to 20 per cent of new auction applicants are excluded, especially international buyers and cryptoholders who don’t have translated or verifiable financial records. Biddable enables bidders to instantly and privately bid in auctions by depositing cryptocurrency into a smart escrow contract, which deters reneging.
The Codex Consortium will include collectors, auctioneers, dealers, museums, and other organizations vetted by existing members who will adopt the protocol and exclusively accept BidDex from day one. Through the consortium members, holders of BidDex will be able to bid on more than $6 billion of goods in auctions from more than 5,000 auctioneers upon launch of the protocol. Consortium members include LiveAuctioneers.com and AuctionMobility.com, the leading marketplace and software providers, respectively, to the A&C market.
Codex’s primary investors include Bessemer Venture Partners and FJ Labs. Advisors to the Codex Protocol include Brook Hazelton (Christie’s president of the Americas) and Fabrice Grinda (super angel and founding partner of FJ Labs). The Codex Protocol is also open source, allowing third-party players into the ecosystem to build applications and utilize the title system.
“The vast amount of new, wealthy cryptoholders in the world are looking for uncorrelated and discrete ways to store value,” Mr. Grinda said. “Traditionally, investors have utilized art for this purpose. With The Codex and Biddable, crypto investors will be able to store value in assets with low correlation to cryptocurrencies. With its technology and experienced team, The Codex Protocol is uniquely positioned to deliver the blockchain to the arts & collectibles auction market.