Just two weeks after Ethereum-based marketplace Zora created a sensation in the crypto community with its tokenized cassette tapes, a similar company, called Foundation, has now launched its own art market.
Like Zora, Foundation helps artists issue ERC-20 tokens that represent their works. Users purchasing the tokens can either redeem them later to receive the items, or trade them on the secondary market. Artists can also benefit from this trading process by collecting the transaction fee that the platform charges for each trade.
Foundation’s first sale will be for a new clothing label, Neue Goods, which was created by co-founder Matthew Vernon. A total of six items will be for sale, including three T-shirts and three "mystery items" that will be revealed in the future. The company also has several designers lined up for future sales, including internet artist Addie Wagenknecht, 80’s-style webpage radio station Poolside.FM and furniture designer Studio Zollo.
The San Francisco startup is led by Vernon along with Kayvon Tehranian and Elpizo Choi. Vernon and Tehranian previously worked at Ethereum-based lending platform Dharma while Choi was a software engineer at security token startup Harbor. “We are merging these crypto and cultural realms," Tehranian told The Block.
"If you look at our creators, they are not crypto creators," he said. "They are very established outside of the crypto realm, and they are coming into crypto to see what this new technology can do for them.”
While Zora currently lists its tokens on the Ethereum-based decentralized exchange Uniswap, Foundation has opted to develop its own protocol in order to make the pricing model more customized to art sales.
Like Uniswap, Foundation uses a price curve to define the relationship between item supply and its price. However, designers on Foundation can also set the minimum and maximum prices for their sales. Often the last few items of a sale on Uniswap have extremely high prices and are less likely to find buyers, but this feature is supposed to address that problem.
“[Foundation’s protocol] is inspired by Uniswap, but focuses on the use case of redeemable tokens issued by creators,” said Tehranian.
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