Patent Application
20240403874
The present invention relates to administration of collectibles, and more particularly to systems and methods for fractionalizing collectibles into blockchain tokens and for sale of tokens.
Collectibles can be defined as works of art, antiques, comics, textiles, stamps, coins, jewelry, weapons, cars, planes, motorcycles, toys, as well as any other goods or items that have value to collectors.
Prior to this invention, people either acquired and owned these collectibles personally or through a business entity, such as a corporation. If owned by a company, the company could sell shares to individuals, in which case the company was responsible for keeping the collectible safe, maintained, and insured. These costs plus the operating costs of the company were passed to the shareholders. Having a company involved created a conflict of interest between the fractional owners and the company that wanted to be profitable, which meant they had to charge even more than the operating costs.
Often, private collectors acquire their collections over a lifetime and become sentimental about their collections. They enjoy owning the collectibles and displaying them in their homes, galleries, garages, and hangars. The costs to maintain and insure these collections are already being borne by the collector. Additionally, when an asset owner sells an asset, there is often an auction fee or a sales agent fee, such as twenty percent of the sales price.
Often, private collections are converted to museums to keep a collection together and provide a tax deduction to the collector. The museum offsets the costs of maintaining and insuring the collection by charging admission fees but rarely do these fees offset all of the costs.
Unrestored originals and restored collectibles have been a staple of many people's collections. However, nowadays many people do not have the money, space, or resources to buy, hold or restore these historic collectibles. On top of this, these original and restored collectibles have gone up in value over time. The owners of these collectibles may not wish to get rid of their collectibles but would like to make additional revenue off of their assets while still maintaining physical ownership.
It is an object of the invention to provide a digital platform to allow collectors (buyers) the opportunity to own physical assets that they otherwise could not afford or obtain.
It is an object of the invention to provide a digital platform on which collectible owners (sellers) can place their collectibles to make additional capital through the process of fractionalizing ownership.
It is an object of the invention to provide a digital platform that allows viewers to become more educated on the price, rarity, and history of historic collectibles from across the globe.
It is an object of the invention to provide a way for the token collectors to make additional revenue through the appraisals of the collectibles.
It is an object of the invention to provide yet another way for the token collectors to make additional revenue by selling the tokens on the company's secondary market.
The foregoing objectives are achieved by providing systems and methods having the features described herein.
In embodiments, a method of administering an online blockchain platform is provided that allows users to purchase and sell tokens stored on a blockchain that are associated with a particular collectible asset, said blockchain providing a shared, immutable ledger that facilitates the process of recording transactions and tracking tokens of collectable assets in a decentralized network. The method comprises providing a processing program for fractionalizing an asset into tokens and for enabling a market for purchase and sale of the tokens, the processing program providing a visual interface for use by a plurality of buyers and sellers for offering to sell and purchase tokens representing fractions of assets; providing at least one collectable asset for fractionalizing into tokens using the processing program, the at least one collectable asset owned by an asset owner; and registering the at least one collectable asset with the processing program. Registering includes fractionizing a plurality of blockchain tokens reflecting one hundred percent ownership of the collectible asset, the tokens entitling holders of the tokens to rights in a future disposition of the collectible asset, including a proportionate percentage of any future sale or insurance proceeds of the collectible asset.
In embodiments, providing at least one asset for fractionalizing into tokens comprises: the asset owner proving title to the asset; the asset owner providing an appraisal of the asset, the asset obtained from an appraiser; and the asset owner providing proof of insurance on the asset up to at least the value of the appraisal. In embodiments, the appraiser is a licensed appraiser.
In embodiments, the methods further comprise using the processing program to enable users of the processing program to purchase tokens of the at least one collectable asset from the asset owner in an initial offering and thereby become holders of the tokens, the processing program associating purchased tokens with blockchain wallets of each holder of a token. In embodiments, the methods further comprise using the processing program to enable holders of tokens of the at least one collectable asset to offer to sell and to sell tokens to subsequent holders of tokens in a secondary market, the processing program associating purchased tokens with blockchain wallets of each subsequent holder of a token.
In embodiments, registering a collectable asset further includes using a Register a New Asset page for recording an Asset Owner Public Key comprising a public blockchain key or wallet address of the asset owner; recording an Asset Type identifying the type of asset, recording a Blockchain Network on which the tokens will be created, generating a Symbol that uniquely identifies the collectible asset, and assigning a Total Fractions figure consisting of the number of tokens for the collectable asset.
In embodiments, registering a collectable asset further includes using the Register a New Asset page for recording a Vehicle Identification Number. In embodiments, registering a collectable asset further includes using the Register a New Asset page for recording an appraised price of the collectable asset. In embodiments, registering a collectable asset further includes using the Register a New Asset page for recording a description of the collectable asset. In embodiments, registering a collectable asset further includes using the Register a New Asset page to associate media documentation with the assets, such as photos, appraisal documents, and insurance documents. In embodiments, a default value for the Total Fractions is 100,000.
In embodiments, each asset owner maintains possession of their respective collectable asset and is responsible for maintaining the condition of the asset.
In embodiments, an owner or licensed administrator of the processing system collects a royalty from an asset owner for registering an asset with the processing program. In embodiments, an owner or licensed administrator of the processing system collects a transaction fee from buyers upon purchase of tokens. In embodiments, an owner or licensed administrator of the processing system collects a transaction fee from sellers upon sale of tokens.
In embodiments, the at least one asset is a motor vehicle. In embodiments, the motor vehicle is an automobile, a truck, a boat or a motorcycle.
The foregoing and other objects, features, aspects and advantages of the invention will become more apparent from the following detailed description of the invention when considered in conjunction with the accompanying drawings.
In the following detailed description of the preferred embodiments, reference is made to the accompanying drawings which form a part hereof, and in which are shown by way of illustration specific embodiments in which the invention may be practiced. It is to be understood that other embodiments may be utilized and structural changes may be made without departing from the scope of the present invention.
The foregoing and other objectives are achieved by providing systems and methods for fractionalizing a collectible into blockchain tokens and a means for buyers and sellers to trade those tokens, as outlined in the flow chart of
Prospective customers of this invention are museums and private collectors (“principal owner”) who wish to get some liquidity from their collectibles, yet still retain physical possession of their collectibles. The principal owner is at liberty to put as few, or as many shares in as they would like, to help them gain their desired amount of revenue.
The process of the invention begins when the principal owner of a collectible decides that they want to fractionalize their collectible and sell fractions or shares to others. The owner contacts an operating company that is authorized to use the system and methods of the invention. The operating company begins by collecting documents from the owner of the collectible from third parties including a recent appraisal that validates the authenticity and value of the collectible (Validation). The principal owner must also provide documentation that the collectible has insurance that meets or exceeds its appraised value.
The principal owner executes a contract with the operating company in which the owner agrees that it will keep the collectible protected, maintain the current condition of the collectible, have the collectible appraised annually, and keep insurance on the collectible at least equal to the most recent appraisal (Execute Contract).
For each type of Asset there will be custom fields that are required for only that type of asset, depending on the system and the assets for which it is configured. For example, for collectible vehicles, a VIN or Vehicle Identification Number is a required field where the administrator enters the serial number from the manufacturer. The Name is a required field where the administrator enters a title for the collectible or asset that will help people to find and identify that item. For example, this could be “1965 Mustang K-Code Convertible” or “1969 Chevelle SS 396 L78.” The Appraised Price is a required field where the administrator enters initial appraised price that the administrator has verified through documentation provided by a third-party appraiser, which is preferably a licensed third-party appraiser. The Collection and Category are required fields where the administrator selects an already registered collection or category which serves like a folder to help categorize the collectible. For example, for a “1965 Mustang K-Code Convertible”, the Collection could be “Ford” and Category could be “Mustang”. The Description is a required field where the administrator describes the collectible, often including the provenance of the asset. Because all of this information is recorded on the blockchain and can later be searched, it is recommended that the principal owner provide as much historical information as possible in the description. Photos, Appraisal Doc, Insurance Doc, and Documentation are all for media documentation that is connected or associated with the collectible or asset.
The above description of
All of these fields are standard, but an unlimited number of additional fields can be configured for every Asset Type. For example if Automobile was selected for Asset Type, fields for Year, Exterior Color, Interior Color, Body Type, Engine, and Transmission would also be displayed and minted on the token.
The operating company then mints a selected number of tokens (such as 100,000) that reflects 100% ownership of the collectible and deposits the tokens in the owner's blockchain wallet (Mint Tokens).
The collectible owner chooses the number of shares that they wish to sell off at any given time in the marketplace. The price of these shares is determined by the owner, although it is recommended initially to be equal to the appraisal price of the collectible divided by the total number of tokens (Offer Tokens).
A buyer finds the collectible they want on the website. The buyer connects their digital wallet to the site. A prospective buyer then has the choice of purchasing shares from the initial offering, or the secondary market price. In the case of an initial offering, the buyer selects the number of shares to purchase at the offering price. The buyer then presses “buy” and confirms the purchase of the shares through their digital wallet (Purchase Tokens). On the secondary market, the buyer has the option of being a market maker or a taker in terms of placing their own shares for sale or buying someone else's shares. An offer can be made on the secondary market by anyone with shares they are willing to sell of that asset for their own price. One can also be a market taker on the secondary market by purchasing the orders that have been listed by other market makers. A market taker can choose the number of shares that they are willing to buy at the share price of the secondary market. Once purchased, a buyer will find their tokens organized in their digital wallet, as shown in one embodiment of a digital wallet screen in
In embodiments, buyers will find their tokens arranged in their digital wallets organized in folders by collections, as shown in
In embodiments, if the principal owner sells all their shares or a predetermined maximum in the contract (such as 51%, 66%, or 80%), the operating company will take title or possession of the collectible on behalf of the other token holders. In embodiments, if the principal owner was a museum, title would be transferred to the operating company but possession would be maintained by the museum.
If the collectible is damaged (Collectible Damaged), the principal owner would collect payment for the damages and the operating company would disperse the pro rata funds to all token holders based on their percent holdings in their wallet (Funds Dispersed).
If the collectible is sold (Collectible Sold), the operating company disperses the pro rata funds to all token holders based on their percent holdings in their wallet (Funds Dispersed). The token will remain on the blockchain, but will be noted or identified as “redeemed.” The new owner of the collectible can choose to continue to keep the collectible on the blockchain and execute a new agreement with the operating company and optionally mint new tokens.
In an embodiment of the invention, the operating company can include the contract that certain decisions relating to the collectible will be voted upon by all the token holders. These decisions might include the decision to sell the collectible when a bona fide offer has been made to the operating company or the principal owner, change of location of the collectible, or whether to restore or disperse insurance funds in the event that the collectible is damaged. Because all the shares can be seen on the blockchain, a notice of a vote can be sent as a special token to those wallets to notify them that a vote is being called. The holder of the token would simply connect their wallet and be notified that there is a vote currently underway for all token holders.
As shown in the embodiment of
With reference to
Methods of generating revenue from the methods and systems are also provided. In embodiments, an owner or licensed administrator of the processing system collects a royalty from an asset owner for registering an asset with the processing program. This royalty can be significantly less than conventional auction house or agent fees, such as four, five, six, seven, eight or nine percent of the appraised value of the asset at registration, or the eventual sales price of the asset when sold. Annual fees can also be charged to the asset owners. In other embodiments, an owner or licensed administrator of the processing system collects a transaction fee from buyers upon purchase of tokens. In other embodiments, an owner or licensed administrator of the processing system collects a transaction fee from sellers upon sale of tokens.
Although the present invention has been described in terms of specific embodiments, it is anticipated that alterations and modifications thereof will no doubt become apparent to those skilled in the art. It is therefore intended that the following claims be interpreted as covering all alterations and modifications that fall within the true spirit and scope of the invention.
This application claims priority to and incorporates by reference the following applications: U.S. Provisional Patent Application 63/482,767 filed Feb. 1, 2023, which is pending.
| Number | Date | Country | |
|---|---|---|---|
| 63482767 | Feb 2023 | US |
