The Farandole Blog

Blockchain and Fine Wine Investment Author: Corentin Calmels

As Blockchain features develop, it becomes the ideal solution to speculate on Fine Wine. Farandole’s marketplace is the major player in this new run.

The Blockchain and commerce

Blockchain is undeniably revolutionizing the notion of exchange. Blockchain exchanges are: peer-to-peer, offer traceability, and remove third parties, among many other advantages. It can replace money transfers, as proposed by Western Union for example, or allow some companies in the luxury sector to reaffirm the quality of their products by allowing consumers to track every step of their creation.

Fine wine as an indispensable investment Wine is an investment of choice for a portfolio manager. Indeed, bottles of fine wine are only slightly correlated to the rest of the market, as evidenced by the resistance of the wine sector to recent financial crises, and therefore allow diversification while reducing its risk significantly. Moreover, fine wine is appreciating year after year and more rapidly because of climate change, and therefore promises a juicy return on investment after only a few years. Fine Wine has had a guaranteed place in marketplaces for almost 25 years, whether through the Bordeaux Index or the Liv-ex (London International Vintners Exchange). Also, large auctions organized by prestigious luxury auction houses such as Sotheby’s and Christie’s allow the exchange of great wines and rare spirits. Of course, these can be subject to personal consumption, but they can also be a great investment.

Blockchain and Fine Wine: It’s a match!

The union of wine investment and Blockchain then seems natural as it allows fine wine portfolio managers as well as individual consumers to exchange bottles securely and quickly via Blockchain technology. The old process of authentication is costly and time-consuming (up to 8 weeks of due diligence). However, integrated blockchain based supply chain tracking allows instant authentication. The traceability seems to be the main advantage of this union since it allows the buyer to know with precision the origin of the bottle as well as the hands between which it was exchanged.

Tokenization of bottles

All this is made possible thanks to the tokenization of physical goods in digital assets through NFTs (Non-Fungible Tokens) which links an NFT to a bottle and thus allows its commercialization via the Blockchain. This tokenization has a negligible cost on unencumbered Blockchains like Avalanche, where the fees of use are also very low, and has on the other hand a great quantity of assets. In addition to marketing, it allows the traceability of the state of the bottle, whether it is its origin or temperature, humidity and many other readings thanks to the IoT (Internet of Things) which links sensors placed near the tanks and bottles directly to the Blockchain. Its main asset, however, remains the possibility to exchange the bottle without exchanging the bottle. To clarify, the seller and the buyer exchange the NFT linked to the bottle but do not have to worry about the physical exchange of the bottle, its transport, and therefore the time linked to this exchange. Indeed, Farandole marketplace allows, among other things, the peer-to-peer exchange of NFTs linked to bottles while taking care of the storage of the bottle in the best conditions. This allows investors to quickly exchange bottles without worrying about the transportation and storage of the underlying physical assets. The final consumer can then decide to “consume” its NFT to receive his bottle at home, either to display it or simply to consume it.

Farandole

As mentioned above, Farandole is a marketplace dedicated to the exchange of wines and spirits. Farandole aims to disrupt the fine wine and spirits investments by enabling new ways to engage with customers from across the globe. By leveraging blockchain technology , Farandole is giving back value to the producer while providing more autonomy and knowledge to the consumer. The range of services offered by Farandole is wide, from simply exchanging NFTs, related to fine wine or art, to DeFi services like staking a $FAR token on its online application. Farandole could quickly become the major player in wine trading thanks to Blockchain technology, but also thanks to the care taken with the bottle. Indeed, Farandole offers to keep your collection so that you don’t have to worry about physical storage, while constantly informing you about the state of your bottles. With Farandole, investors, connoisseurs or newcomers can enjoy wine at its finest.