Arcural, Art Basel-Funded Blockchain Startup, Launches Today – ARTnews.com

Art Basel’s parent company MCH Group and the LUMA Foundation, a Zurich-based art nonprofit, have launched Arcual, a blockchain startup dedicated to the needs of the art world.

Arcual is a new blockchain that creates smart contracts specifically designed for the art world, as opposed to the NFT world. These smart contracts offer artists, galleries, institutions and collectors a standardized way to log provenance and sales agreements, while distributing royalties and providing digital certificates of authenticity.

“Arcual is ahead of the hype of NFTs,” Bernadine Bröcker Wieder, Arcual’s CEO, told ART news in a recent interview. “Three and a half years ago there was a conversation between some members of the team at Art Basel and those at the Luma Foundation about problems in the art industry and how blockchain could potentially help solve them.”

Arcual is not the first blockchain startup to target the art world. Last year, Fairchain and Lobus launched; both companies similarly offer art-world-specific services through blockchain technology.

However, Arcual aims to differentiate itself through two-party verification. Typically, when a smart contract is created, the information entered into that contract comes from only one wallet. With digital works of art and NFTs, this is not a big problem because the work is directly visible. But with physical artwork, a typical buyer will have no way of knowing whether the information in the contract, or the artwork it refers to, is authentic, beyond relying on the reputation of the contract creator. Arcual requires two parties—typically the artist and the gallery—to create the contract and a certificate of authenticity, thereby ensuring that each subsequent buyer receives the authenticated piece.

“The agreement can be entered into by an artist and a gallery at the same time, so that there is a certificate of authenticity that ensures that the artwork actually exists,” said Bröcker Wieder. “Typically, information on decentralized public blockchains is not monitored much, and we needed to address that.”

Bröcker Wieder envisions a truly decentralized blockchain ecosystem that does not belong to institutions such as MCH Group or LUMA.

“The whole point of this is to be decentralized and for the information to be stored across servers that host different entities in the art world,” said Bröcker Wieder. “Right now MCH and LUMA are the nodes we are starting with, but as more art world participants join we can build the first actual blockchain ecosystem where the money circulated goes to the art industry instead of the crypto industry.”

Arcual is offered to some galleries in beta form.

Arcual’s launch raises some questions about whether Art Basel will continue to work with Tezos, which has been its blockchain partner at fairs in Hong Kong, Basel and Paris. However, an Art Basel spokesperson wrote in an email ART news that while MCH and Arcual share a parent company, MCH Group, Arcual “does not in any way interfere with Art Basel’s ongoing partnership with Tezos.” The spokesperson went on to write that indeed, Tezos and Art Basel will be collaborating again for the upcoming fair in Miami.