In our marketplace, the physical artwork is typically stored in a secure, climate-controlled facility or vault until it is either sold or traded. We tokenize the ownership of the artwork, but the actual physical item remains in a designated location, under strict security and insurance to ensure its safety and value. Here's how it generally works:

1. Secure Storage Facilities

• Art Storage Vaults: Our high-value artwork is usually stored in specialized, secure art storage facilities. These facilities are designed to protect the art from damage due to temperature fluctuations, humidity, theft, or other risks.
• Art Banks or Warehouses: We are keeping our artworks in institutions that offer professional storage services for artworks and collectibles. They often provide inventory management, security, insurance, and access control.
• Public or Private Institutions: Sometimes, our artwork might be stored in public or private galleries or museums, depending on the agreement. However, this is less common in decentralized markets and typically applies to high-profile collections or exhibitions.

2. Insurance & Risk Management

• Insurance: The physical artwork is usually insured for its full market value, which protects the asset in case of damage, loss, or theft. The insurance may be handled by the marketplace or through third-party insurance providers.
• Liability and Custody Agreements: Our marketplaces will have specific agreements in place with the storage providers regarding who is liable for damage or loss during transportation or storage. Buyers may also be given the option to co-own the asset but would still rely on our marketplace to manage the physical custody.

3. Ownership vs. Custody

• Fractional Ownership: In our tokenized RWA marketplace, a buyer does not physically take possession of the artwork unless the entire asset is purchased. Instead, they hold a token representing their fractional share of the artwork. The physical piece is held in secure storage, and ownership is represented through the blockchain.

4. Art Redemption and Sale

• Redeeming the Artwork: If a buyer or token holder wishes to take physical possession of the artwork (usually after full ownership of the tokenized share), arrangements can be made through the platform to deliver the art. This process may involve a fee and logistical coordination.
• Resale & Auction: In the case of fractionalized tokenized assets, when someone sells their tokens, the artwork may be transferred to another custodian or the new owner may gain the right to resell it via the marketplace. In some cases, the artwork could also be auctioned for resale, either digitally or physically.