E-Trade mulls booting meme stock trader Roaring Kitty: WSJ
June 4, 2024
Roaring Kitty’s $300M GME position sparks market manipulation claims
June 4, 2024Galaxy Digital uses historic violin NFT to secure loan
Michael Novogratz’s Galaxy Digital and Animoca Brands co-founder Yat Siu have collaborated to tokenize a historic 1708 Stradivarius violin, using it as collateral for a multimillion-dollar loan.
Collateralization Process
On June 4, Galaxy reportedly provided an undisclosed amount of funds to Siu, who utilized the 316-year-old violin he owned as collateral. Galaxy Digital transformed the violin into a nonfungible token (NFT) and will retain both the digital and physical versions until Siu repays the loan.
While the exact loan amount remains undisclosed, Galaxy and Siu confirmed that it amounts to “millions.” A custodian based in Hong Kong will safeguard the violin until both parties authorize its release from custody.
The violin boasts a rich history, having once been in the possession of Russian Empress Catherine the Great. Tarisio, a renowned musical instrument auction house, has meticulously documented the instrument’s provenance, tracing it back over 300 years. The violin was originally acquired by the Russian ambassador to Venice for Empress Elisabeth Petrovna, later passing to Catherine II upon Elisabeth’s death.
Financial Transactions and Asset Tokenization
Thomas Cowan, Galaxy’s vice president of tokenization, highlighted the potential of asset tokenization in lending, citing its transformative impact on crypto lending. Unlike traditional collateral tied to volatile digital assets, tokenizing physical assets offers a more stable alternative.
Cowan emphasized that while the current instance involves a violin, he envisions expanding tokenization to encompass diverse assets like real estate in the future.
Despite the tokenization of physical assets, the NFT market witnessed a notable decline in sales volume during May.
Data from CryptoSlam revealed a 54% decrease in NFT sales volume in May compared to April. While April saw NFT sales exceeding $1 billion, May recorded a reduced volume of $624 million across leading NFT blockchains, including Bitcoin, Ethereum, and Solana.
