Galaxy uses historical violin NFT to secure digital credit
Yat Siu, founder of Michael Novogratz's Galaxy Digital and Animoka Brands, has listed a Stradivarius violin from 1708 as collateral for a multi-million dollar loan.
On June 4, Galaxy loaned an undisclosed amount of money to Siu, who used the 316-year-old violin as collateral. The digital assets firm converted the violin into a non-fungible token (NFT) and will hold the NFT and its physical copy until Siu settles the loan.
Galaxy and Siu did not share the amount of the loan, but said it was “in the millions”. A nanny in Hong Kong holds the violin until Siu and Galaxy sign the release.
300 year old Stradivarius violin
The violin once belonged to Catherine the Great of Russia. According to musical instrument auction house Tariso, they have documented his violin performance for more than 300 years.
Tariso reports that the Russian ambassador in Venice bought violins for Empress Elisabeth Petrovna, who ruled the Russian Empire from 1741 to 1762.
When she died, the violin was given to her successor, Catherine II; Typically Catherine the Great.
Siu bought the violin in 2023 at an auction of more than $9 million.
Tokenization of assets in the loan
Thomas Cowan, Galaxy's Vice President of Tokenization, said that the ability to simulate physical assets could change the landscape of crypto lending. Due to the volatility of the digital asset, the collateral associated with crypto assets is usually very high.
In a Bloomberg interview, Cowan said that tokenizing physical assets would allow customers to lend more to their customers, even in volatile assets like Bitcoin (BTC) or Ether (ETH). Although it may be a violin today, the executive may reach real estate in the future.
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NFT sales fell in May
As NFTs have been used as tokens of physical value, digital collectors have seen sales decline. According to data tracker CryptoSlam, the trading volume of NFTs fell by 54% in May.
In April 2024, NFTs sales volume exceeded $1 billion, while in May it reached $624 million. Leading NFT blockchains Bitcoin, Ethereum and Solana all saw significant declines in sales.
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