NFOs are a new way to securely transact physical artwork on the blockchain.

A specialized chip embedded in the artwork itself cryptographically links the physical object to a token, which can only be transferred by interacting with the physical work.

Arthur created the NFO to address three primary issues: provenance tracking, authentication, and remittance of resale royalties.

Establishing provenance is one of the most important aspects of valuing and authenticating a work of art. Traditionally, this requires research to determine who has owned the work in the past. In the NFT market, establishing provenance is greatly simplified, as all transactions are publicly discoverable on-chain. Using a token as a means to transfer ownership of a physical artwork generates an on-chain, immutable provenance record, making it easy for anyone to verify the chain of ownership.

When artwork is resold for a profit, the original artist rarely receives anything from the secondary market sale. Because smart contracts can dictate distribution of funds from secondary market sales, it enables artists to continue to receive payment every time their work is sold.

NFOs offer a number of benefits for artists:

1. They provide transparency and traceability throughout the collecting process.

2. They create new opportunities for artists to engage directly with their collectors and form strong communities.

3. They create the possibility of receiving royalty payments on secondary market sales.

4. They offer direct ownership and control over artworks, allowing you to see which collectors hold your artworks at any given time.

5. They are immutable and cannot be replicated or counterfeited.

6. They can be bought and sold anywere, 24/7.

NFOs solve several key issues collectors often face:

1. They provide a simple way to verify ownership simply by scanning the tag on the artwork.

2. They simplify provenance tracking and authentication, as all transactions are logged on the public blockchain.

3. They open up new possibilities for artists to interact with their collecting community.

4. They open up the possibility for fractional ownership of artworks.

5. They provide a framework for peer-to-peer secondary market sales.

Not really…

First, the token will only be transferred if there is both a valid scan to originate the transaction and a subsequent scan to complete the transaction. The token can not be sold on it's own: scanning the object is required in order to transfer the token.

The token also acts as a digital title to the physical artwork. Selling the token would create a potential claim on ownership by the new token-holder.

Arthur's NFO platform is built on Polygon, a blockchain ecosystem compatible with Ethereum. Polygon was designed to operate a greater scale than Ethereum while remaining carbon-neutral. Polygon's validators consume orders of magnitude less energy than their Ethereum counterparts, and the team behind Polygon is committed to making it an eco-friendly choice.

MATIC is an ERC-20, Ethereum-compatible token that is used to govern the Polygon network and pay transaction fees. Just as transactions on the Ethereum network are paid in ETH, transactions on Polygon are paid in MATIC. Polygon and MATIC were designed to be a more efficient alternative to Ethereum, offering higher transactional volume and lower fees. MATIC can be bought and sold via many popular exchanges, such as Coinbase or Binance.

While the NFO and PBT share many similarities, the primary difference is that the NFO was designed specifically to enable on-chain transactions, whereas the PBT is a "scan to own" standard. NFOs require two parties to agree to transfer the token, and offer a method for holding both the token and the funds for the transaction in escrow until the new owner confirms reciept of the physical artwork with a second scan.

The PBT allows anyone with access to the object to claim the linked token with a new scan. The PBT is more of a general standard, while the NFO is an implementation specific to transacting.

No. NFOs operate separately from the Arthur app. Neither the buyer nor the seller have to use the Arthur app to finalize the transaction.