Why does the art industry need blockchain technology — Interviews of FRESCO’s Co-founder, Roy Huang
Compilation of recent interviews — Roy Huang, Co-founder of FRESCO
Coming from a collector’s family, Roy has formed an appreciation for art since the very beginning. He clearly sees how blockchain can help improve the provenance, promotion, and liquidation of artwork at a global scale, so he decides to create FRESCO with a team of passionate art & blockchain practitioners.
Q1: As the co-founder of FRESCO Art Blockchain, what has made you so interested in art? Can you share with us the feeling of appreciating art as your own profession?
A: I was born in a collector’s family. My parents have paid great attention to cultivate my appreciation of the arts since I was a kid. Not to mention that I have been living in New York City for four years. As the center of contemporary art, in where important galleries, museums, and auction houses all are located, New York City has given me a lot of opportunities to get engaged with the arts. In addition,being a patronage of MoMA and the Met for many years allows me to further understand the value of the arts. At the same time, I gradually established my own collection of postwar and contemporary art — the HRY Collection, including some blue-chip artists such as Picasso, Andy Warhol, Jack Whitten, Takashi Murakami and other emerging artists such as Benjamin Herndon and Virgil Abloh. I have been paying much attention to the artistic career of Virgil Abloh, the founder of Off white, and I am very honored to own two of his large-scale oil paintings. These are of the earliest paintings in his artistic career. With his growing popularity as an artist, I am very optimistic about the Virgil’s potential.
Q2: Can you tell us when did you form the idea on FRESCO? Would you please explain more in detail about your daily work?
A: At first, art is one of my hobbies because my family collects antiques. However, after learning about the contemporary art and art market in general, my business gult made me realize that the current situation of the art industry determines its huge potential. Currently, the art market is centralized with low liquidity and unclear information. This model of patronage, centralized by the galleries, remains unchanged for hundreds of years. Indeed, the art market is not accepting new population even with the emergence of newly-arising bourgeoisie. This causes the stagnation of the industry. Just like how an ancient European family want to merge into the speedy modern life, people in the art market are eager to find a way to communicate with the public with new technology. I also want to be a part of the revolution. Luckily, I met Ting Liu, the other founder of FRESCO, and the whole FRESCO team. They are professional in art trade, curation, art analysis, and with strong art history background. Moreover, we all have the same target: enlarge the art population.Thus, we established FRESCO with our previous working experience and proficiency. The profit model and the patronage history of the arts are not imageable. Here are some examples:
This is true of any artists. If an artist is fortune enough, his artwork will be bought by a group of collectors at his early career at a very low price. Later, these collectors will cultivate the artist by promoting his artworks to larger galleries and famous museums, invite art critics to establish academic records for the artist, and send some of his artworks to the auction houses. Eventually, with these arrangements, the price of this artist’s work will boom, which can result in an increase of hundreds or thousands times within 20 years. This model of art management is profoundly and openly discussed in the industry. However, art is not yet linked to real capital assets in a global scale. Therefore, a lot of people are still choosing real estate and stocks as a way of investment, instead of the arts. Art manipulation was operated in China, but it collapsed horribly during 2008 and 2009. Why? Because the price of many famous artists’ paintings easily exceeded billions. The fact is that, the foundation of this mode lays in the West, where final values are achieved through auction houses such as Sotheby’s, Christie’s and Phillips for hundreds of years. In China, the collectors established their own private auction houses and manipulated the price of these artists’ paintings through selling them to their best friends. The auction records are fake. Moreover, the donation system to non-profits does not exist in China. Western collectors buy art worth over millions for both commercial value and donation in order to exempt tax. These methods are highly recommended in the US, because public infrastructure requires sufficient capital. The preferential policies provided by the government can ultimately benefit the public.
However, I am very optimistic about the art market in China. With the continuous improvement of the system, the donation rules will get better established. At the same time, some savvy Chinese artists and collectors have begun to gain recognition in the global art market. For example, the price of Zhang Xiaogang’s painting drives from 10K dollars to over 4M dollars within a decade.
This is a vital point — the art market is not wrong. If established artists does not have strong market recognition, how can art students and emerging artists survive? But a healthy art market should not be a platform for only 1% of the artists, who have close connection with the galleries to profit. Instead, anyone with great talent should have the same opportunities of success. This is exactly what FRESCO wants to achieve — to make the public be the patrons of their own “Picasso”.
For the plaguing issue of the information about Mona Lisa’s blockchain collector, I also specifically provided detailed answers in the article. The emergence of this problem is mainly because of public’s misunderstood towards the arts.
Q3: When did you start getting interested in the financial industry? What about blockchain?
A: Since my major is finance, and I have previous experience in risk investment, my interest in finance started back then. For blockchain, when I attended Professor Arun Sundararajan’s talk about blockchain when I was a sophomore at college, I was very impressed. Professor Arun Sundararajan is the author of “Sharing Economy”, and he is the first person who brought out this concept. He mentioned that blockchain technology will change people’s life dramatically. And exactly under his mentorship, I started my own blockchain investment and got better understanding towards the field. After I figured out that art market can be merged with blockchain technology perfectly, I established FRESCO. Coincidentally, when I lectured at the Cheung Kong Graduate School of Business, he came for the class as well.
Q4: When did you come to the US? And for what reason did you make up your mind?
A: I came to the US when I was 16. The reason was very simple: one of my childhood friend studied abroad to the Choate Rosemary Hall and I didn’t want to be surpassed. So I came to the US for high school, and I actually chose the same high school alliance. More importantly, I really want to thank my mother country, China, for supporting us by providing convenient policies. This makes it easy for Chinese students to go to the West for higher education. Second, I really want to thank my family for their trust.Their willingness to let me come to the US alone indeed helped my personal development.
Q5: From your current living context, we can tell that you not only have your own Chinese networking circle, but also many Western co-workers. Can you share with us how to get used to a foreign environment so quickly? Did you encounter any integration problems when you first went abroad?
A: In fact, I encountered many difficulties when I first came to the US. First is living habit, and second is language.America is a country where sports play important roles. When people talk, they like to discuss sport competitions. Indeed, sports can be a way of networking. No matter in high school or college, people in sports teams train together almost everyday. They know each other very well and keep this friendship even after graduation. When I first came to the States, I met so many friends through sports. There were few Chinese at my private high school (Northfield Mount Hermon). In order to integrate into this new environment, I joined the football team. At first, I had no previous experience at all. American football requires its athletes to have explosive power, speed, endurance and flexibility. Due to the shape and body endurance of Asians in general, this sport needing aggressive hitting, makes it even harder to me to get on the field. In order to play a role in the team, I worked really hard in practice. The militarized management in the football team, which your coach decided when to get up or sleep, what to eat and how to practice, was extremely tough. Even worse, as one of the only three Chinese in the team, I was only 120 pounds, with a weak body. I could not do any squat with weights. Not to mention my lack of knowledge about football. I feel like my experience was more or less similar to the movie “Rudy”, which describes how David Anspaugh harbored the dreams of playing football at the University of Notre Dame despite significant obstacles. I enjoyed this process of achieving my goal regardless of the result. In addition, my high school requires its students to volunteer at a farm in Northfield Mountain three hours a day. It is hard to balance between study, volunteer and football training. However, after this immersive experience of American life, I get used to American ways and become more integrated into this environment. Before I came to the US, my English was not bad in a Chinese school. However, I didn’t realize until I came here that what I learned in China was not American way of speaking at all. At that time, I learned oral English by listening to live shows, radio talks, and the most authentic TV programs favored by many local audience. I recommend that everyone should try to communicate with Americans and learn about their popular culture.
Q6: We see that you are keen on fitness in your spare time. Can you tell us why you choose to go to the gym as your personal hobby, and how can fitness impact you in your life?
A: I found that in the US, not only professional athletes are keen on sports, but also hedge fund managers, politicians and entrepreneurs have their favorite competitive sports. Sports can both train their personalities and bring them social opportunities. Talking about the latest news from the Wall Street Journal and working out in the same gym demonstrate a way of living healthily. This is the reason why I keep exercising.
Q7: Besides going to the gym, do you have any other ways to release some stress in your life, since you must be busy studying and working?
A: Going to the gym is definitely my top choice. Besides that, I enjoy collecting arts because of scarcity. Just like lining up for a Supreme X Off-white product, buying art can fulfill the satisfaction of pursuing rarity. For example, Off-white and Supreme get inspired by the prints of many artworks; maybe this is a way to explain its expansive price. If you search for Virgil’s first Tweet at Twitter, it should be his speech at Harvard Graduate School of Design. Therefore, anything corresponding with the arts can explain its asymmetry between price and suitability.
Q8: In general, do you think there are any problems in blockchain projects? How do you see FRESCO in facing such trends in the blockchain industry?
A: There are indeed many problems in the industry. For example, ICO has become the latest financing method. Although ICO can help the company to gain capitals at early stages, the risks it brings also harm the profitability of many retail investors. If you think of some 2-dollar per token projects in the past December, they have already dropped to 0.3 dollars (like Bankex). Since ICO should work as a decentralized investment and financing tool, how can a normal middle-class person in a developing country withstand such huge decline? Therefore, at FRESCO, we decided to abandon ICO and financing from institutes through VC standard. We distributed 60% of our capital, equally 3 billions of FRESCO tokens, to the public in the form of 100 art questions, free. We need to create values for our community instead of the risky value exchange which may lead to nothing.
Q9: For business students, what should they focus on during their four-year study at college? What about the arts students? Do you have any suggestions for them as well?
A: As a business student, I think you don’t need to hurry for an internship during the college. Instead, you should absorb more knowledge in the field of your interest. After finding your true passion, go ahead and devote yourself into it. As soon as you start an internship, you will spend most of your time in the work. However, I think four-year college should be a period when you try and grow. The process of dream finding is more important than being a switchable screw at a large corporation, where your imagination is totally suppressed. We only live one life, and you are the person who determine the way you live. This is how I feel after being in a business school for four years.
I suggest art students to start studying the art market. Since schools are academic institutions, they won’t teach you how to sell the arts. Professors always say that making art is not for its commercial values. However, if you want to be the next “Richard Serra”, being able to make a 20-meter stainless steel sculpture, how would you even start this project without money? Maybe you have to work at a restaurant for living and give up your art career.
The market is cruel, and when you step into the field, you will find that when you ask Damien Hirst which painting to buy, he will tell you to buy the largest one.
Q10: Do you have any suggestions for international students in general?
A: I think we are currently in the best era. The generation of our parents have many restrictions due to the times they are in. Therefore, as long as you have ideas, willingness, and ability to express yourself clearly, you are able to get supports from all over the world, instead of begging hard for assistance.
Carpe Diem. This is our time — a time when people with real ability are the true heroes.
If a man has not discovered something that he will die for, he isn’t fit to live.
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