Galaxy Digital, the company founded by Michael Novogratz, has utilized tokenization to collateralize a Stradivarius violin worth $9 million for a loan. The violin, crafted by the renowned Stradivari family in 1708 and once owned by Russian Empress Catherine the Great, is considered to be of the highest quality. Yat Siu, co-founder of Animoca Brands, borrowed the funds from Galaxy and used the violin as collateral. Galaxy holds both the tokenized version of the instrument in the form of a nonfungible token (NFT) and the physical violin. The instrument will be kept by a custodian in Hong Kong, and any removal of the violin requires approval from both parties. While the exact terms and size of the loan were not disclosed, it is known to be in the millions of dollars. Galaxy Digital, known for its loans through Galaxy Global Markets, aims to attract a new clientele and tap into the increasing wealth generated by the rise in cryptocurrency prices. This move highlights the potential and challenges of tokenizing real-world assets (RWA), as discussed by MANTRA Chain co-founder and CEO John Patrick Mullin in a recent interview. RWA tokenization brings traditional assets into the digital economy, allowing for more efficient and accessible trading and management. Popular assets for tokenization currently include U.S. treasuries, but there is significant potential for real estate and other valuable assets.
