World’s maiden attempt to bring wines onto a fully decentralised, orderbook-based exchange

FRAC Pte Ltd, a decentralised exchange for fractional non-fungible token NFTs (F-NFTs), has inked an agreement with luxury asset NFT marketplace developer XVA Collective Pte Ltd to explore a future collaboration-related to the tokenisation and fractionalisation of wines as well as other luxury and yield-based potential assets.

Under the memorandum of understanding (MOU) between both parties, the listing of the wines on Frac’s platform will be the first asset of its kind to be traded via a completely decentralised, full-fledged orderbook-based exchange using F-NFTs.

The partnership will explore the viability of listing NFTs of selected wines worth up to US$1 mil on the Frac F-NFTs DEX (decentralised exchange) through an initial asset offering (IAO).

Under the MOU, XVA will provide the wines for fractionalisation at a mutually agreed pace, to be finalised once a definitive agreement is signed.

Representing real world, physical bottles or casks of wines, these NFTs will be split into smaller fractions to allow fractional ownership of these assets – paving the way for anyone to invest in these high-value alternative assets without having to come up with a significant amount of capital.

“The partnership with XVA Collective is a step forward for Frac which is vying to be the world’s first or leading F-NFT platform for real-world assets,” commented Frac’s co-founder and CEO Melvin Tan. “The platform will make it easy for anyone to invest in luxury assets.”

Tan further noted that Frac’s partnership with XVA Collective is a key step towards the former’s long-term goal of revolutionising the way people invest in and access high-value alternative assets, democratising access to these investments.

The F-NFTs of these tokenised wines will revolutionise the wine industry as it helps producers and investors to monetise their collections more efficiently.

Higher prices tend to translate into lower liquidity. However, with F-NFTs, this will lower the prices, making it easier for transactions in traditional illiquid markets such as the wines market.

XVA’s existing wine NFTs allows one to authenticate wines based on the bottle format, origins and vintage, allowing investors and collectors to value these investments based on the scarcity in the real world.

The luxury-asset-backed NFT marketplace looks forward to the collaboration between the two Web3 players given that the project will be a shining example of the real-world utility of blockchain technologies such as F-NFTs on DEX.

“We are excited to work with Frac to inaugurate the world’s first wines to be traded on a fully decentralised, full-fledged orderbook,” noted XVA Collective co-founder and CEO Philip Lim.

“This new concept will revolutionise the wine industry as it completely changes how rare wines are sold. This project will be an important testament to the real-world applications of blockchain technology.”

Looking ahead, Lim expects the demand for luxury assets in Asia to continue to expand in line with the rising affluence in the region, hence Web3 players involved in this segment of the industry are poised to benefit from this potential growth. – Feb 3, 2023

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