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Galaxy Digital Showcases RWAs With $9 Million Violin Loan

Galaxy Digital (GLXY), led by Mike Novogratz, made headlines again this week after issuing a multi-million dollar loan to the founder of Animoca Brands, Yat Siu. The loan was collateralized by a 300-plus-year-old violin that was auctioned for $9 million just last year.

So… what’s a rare violin and loan between two billionaires got to do with crypto?

It’s because the violin was tokenized. Both the physical violin and its digital representation in the form of a NFT are being used as collateral.

“Tokenizing physical assets like fine art or musical instruments allows better loan terms compared to volatile assets like Bitcoin or Ethereum”

Thomas Cowan, Galaxy Digital's Vice President of Tokenization

The Benefits of RWA Tokenization:

  • Unlocks Liquidity: The violin, traditionally an illiquid asset, can now potentially be fractionally owned by multiple investors through the NFT.

  • Improves Loan Terms: Compared to using volatile digital assets like Bitcoin, the tokenized violin offers a more stable form of collateral, potentially leading to better loan terms.

  • Expands Investment Opportunities: Tokenization opens doors for new investment opportunities in unique, high-value art or historical artifacts.

In Galaxy Digital’s case, it was a good publicity move to showcase the value of Real World Asset (RWA) tokenization, a conversion service that the company hopes will one day become a real revenue driver.

“Today it’s a violin, but tomorrow it could be real estate.”