What are Art Security Tokens?
Art Security Tokens allow you to invest in fine art along with other art aficionados. Thanks to your investment in Art Security Tokens, the masterpiece becomes accessible to the general public in a prestigious museum.
Note that investments always involve certain risks.
Investments in Art Security Tokens are associated with several risks. Before investing in Art Security Tokens, you should carefully read the description of the associated risks. The repayment of your investment and the payment of a possible return on the Art Security Tokens’ maturity date are entirely dependent on the piece's value at that time. If the value of the piece falls, investors run the risk of losing all or part of their Art Security Tokens deposit.
Rubey Art Security Tokens are meant for people who want to invest in art but don't have the budget to buy a masterpiece and for people looking for an investment with a positive social impact.
Investing in Rubey Art Security Tokens promotes culture. It will help to keep important pieces of art accessible to the public. The purchased piece of art remains on loan to prestigious museums.
Diversify your investment portfolio
In addition, the Art Security Tokens offer you the opportunity to diversify your investments. The entry price for investing in art tends to be high. However, thanks to Rubey, anyone can get started with as little as 150 euros. Spreading your wealth across different types of assets, including Art Security Tokens, is a good way to diversify your investments. This generally also reduces the overall investment risk.
Fractional ownership allows you to own shares of fine art.
Rubey makes investing in important pieces of art accessible to everyone with Art Security Tokens.
A painting or piece of art is purchased by a target company. The target company needs the necessary financial resources to finance the purchase and cover the costs of the purchase. The target company uses the painting or piece of art as collateral to attract such financial resources. The piece of art is divided into many equal parts, as it were. The payment rights for the piece (which is used as collateral) are also divided into virtually equal parts, which are referred to as Art Security Tokens. The target company issues these Art Security Tokens and from an economic point of view, the investors subscribing to the Art Security Tokens become indirect "owners" of a piece of art.
Assume a particular painting with an initial value of 1.2 million euros is divided into 1 million Art Security Tokens to raise a sum of 1.41 million euros. 1 Art Security Token that is subscribed to for 1.41 euros then represents a value of 1.20 euros at the Art Security Token Offering. The difference of 0.21 euros is the cost per token that covers the administrative and operational support of the Art Security Token Offering for the entire term of the token’s issuance.
On the Art Security Tokens’ maturity date, the target company will use the painting's entire net realisable value (after deduction of realisation costs and taxes) to repay the investor's deposit and pay out the agreed return. This directly exposes the Art Security Tokens’ investors to the evolution of the painting’s value (a price increase or decrease).
Each investor decides how many Art Security Tokens he or she wants to buy. Art Security Tokens are always linked to one specific work of art and are securely registered on the Ethereum/Polygon blockchain.
Together we can achieve more.
On the Rubey platform, you can become the ‘owner’ of a brush stroke, a daub of paint, a splash or a line of a masterpiece. And you make sure that others get to admire the masterpiece at a major museum.
A security is a tradable financial asset. A security token is therefore the electronic form of such a security or tradable financial asset:
1. Legal framework:
The issue of Art Security Tokens is therefore bound by the financial legislation and the monitoring of this by the supervisory authorities. This distinguishes Art Security Tokens from unregulated tokens such as Bitcoin and NFTs, which generally do not have a clear legal framework yet.
2. The piece of art exists in the real world
Art Security Tokens represent a value of an art collectible that exists in the real world. These physical pieces of art are unique, museum-quality and non-copyable. Unlike Non-Fungible Tokens or NFTs, for instance, which always represent digital pieces of art that are easy to copy.
Investments via Rubey also include the establishment of a pledge on the physical piece of art. This assures investors that Rubey has to use the value of the piece to meet its obligations to the investors.
Registration on the blockchain.
Rubey Art Security Tokens are registered on the Ethereum/Polygon blockchain.
A blockchain is a digital ledger that records who owns how many Art Security Tokens in a completely reliable way. It also tracks whenever an Art Security Token changes ownership. Such transactions and registrations can take place 24/7.
The rules and conditions that determine when an exchange of Art Security Tokens can go ahead are laid down in a smart contract. This is a computer algorithm that automatically makes sure all participants stick to the arrangements.
For instance, Art Security Tokens can’t be exchanged with someone who has not yet registered as a verified user on the Rubey platform. This is a condition in the smart contract. This makes Art Security Tokens theft or fraud impossible.
You can participate in Rubey Art Security Tokens from 150 euros. This is unique. People seeking to invest in top-quality art usually have to dig far deeper into their pockets. Thanks to Art Security Tokens, the opportunity of a quality art investment finally goes hand in hand with a low entry price. The Rubey platform offers investments from 150 to 10,000 euros.
If you wish to invest a higher amount or if your company is interested in investing in Art Security Tokens, please contact us.
Note the quotation marks around ‘Co-owner’. This is because any investor who purchases Rubey Art Security Tokens effectively becomes the legal owner of these Art Security Tokens, even though they do not directly own the piece of art itself. The official ownership of the piece resides with a specific target company of Rubey. Each Rubey target company owns one piece of art and transfers the financial rights related to the piece to the token holders.
As an investor, you are entitled to claim a repayment on your investment from the target company at the end of the 10-year term (which may be extendable).
Please note that the amounts to be distributed by the target company are limited to the piece’s net realisable value, which is the value of the piece upon realisation after deducting the costs of the sale. As an investor, your right of recourse against the target company is therefore limited to the piece’s net realisable value.
Scenario 1: the piece’s net realisable value is sufficiently high
In this scenario, the target company will initially pay you your deposit for each Art Security Token plus a 0.5% annual interest rate. This 0.5% annual interest rate is based on the entire term the Art Security Tokens have been outstanding. It is not paid out during the term and is not added to the outstanding amount of your investment deposit each year.
Scenario 2: the net realisable value of the piece is higher than in scenario 1
If the net realisable value of the piece exceeds the amount of the investors’ deposit plus the 0.5% annual interest rate, the investors are also entitled to claim their share of this capital gain. It means that as an investor, you are entitled to share fully in any increase in the piece’s value.
Scenario 3: the piece’s net realisable value is insufficiently high
In this scenario, the repayment of the deposit and interest will be limited to the available amount of net realisable value. This means that you risk losing some or all of your deposit.
Finding an optimal time to sell
Of course, Rubey aims to realise the highest possible value for the token holders. To maximise the chance of this happening and to limit the risk that the piece has to be realised in unfavourable market conditions, Rubey can extend the Art Security Tokens’ term by 1 year up to three times. The term is therefore sometimes presented as 10+1+1+1 years. In the period of 36 months preceding the end of the initial 10-year term, Rubey can accept a good offer for the artwork. In this case, the token holder will be paid before the end of the initial term. This allows Rubey to decide on the best time to sell based on the advice from art experts and the current market conditions.
The Art Security Tokens will be paid out as soon as possible after the end of the term, and in any case within three (3) calendar months following the piece's sale. This allows all costs and taxes related to the sale to be calculated.
The masterpieces are selected and acquired in consultation with curators and museum experts after a period of thorough research.
On loan to museums.
Tokenised Rubey artwork is not stored away in a warehouse or private collection. It is placed on loan to prestigious museums, so it makes masterpieces accessible to all art lovers again. This also gives Art Security Tokens a strong social impact.
The Royal Museum of Fine Arts Antwerp is the first museum to embrace Art Security Tokens to enhance its excellent collection with Carnival de Binche by James Ensor.
More tokenised pieces of art will follow in collaboration with other museums.