Collectibles Tokenization & Optimal Security Design

69 Pages Posted: 30 Dec 2019 Last revised: 2 Mar 2020

See all articles by Blair Vorsatz

Blair Vorsatz

University of Chicago - Booth School of Business

Date Written: February 28, 2019


I develop a model of collectibles tokenization to understand whether recent tokenization efforts create or destroy value. While issuing divisible security tokens against illiquid collectibles lowers transaction costs and facilitates greater portfolio diversification, security design complications arise because ownership rights and viewing rights are necessarily separated. Current efforts squander the viewing rights, likely making tokenization welfare-reducing, thereby explaining limited adoption. Instead, renting the viewing rights would make tokenization welfare-improving. While collectibles rental markets are immature, I show empirically that only modest rental yields are needed to make tokenization welfare-improving, which suggests this security design shortcoming can be resolved.

Keywords: Collectibles, Tokenization, Blockchain, Illiquidity, Convenience Yields, Art

JEL Classification: G11, G12, G23, Z11

Suggested Citation

Vorsatz, Blair, Collectibles Tokenization & Optimal Security Design (February 28, 2019). Available at SSRN: or

Blair Vorsatz (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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