Mark Lurie is the CEO of Codex, a decentralized registry for unique assets like art, fine wines, watches and more. Codex Protocol makes it possible for you to use cryptocurrency to buy $6 billion of art and collectibles today, and plug into a growing ecosystem of third-party services.
1) Could you please tell us about yourself?
Before starting Codex Protocol, I had previously founded and sold Lofty.com, a venture-backed, expert-reviewed online marketplace for art and collectibles. Prior to Lofty, I had worked in venture capital as an investor at Bessemer Venture Partners and FJLabs. I received an MBA from Harvard Business School and a BA from Harvard in economics.
2) What is Codex Protocol?
Codex is the leading decentralized asset registry for the $2 trillion arts & collectibles (“A&C”) ecosystem, which includes art, fine wine, collectible cars, antiques, decorative arts, coins, watches, jewelry, and more. Powered by the CodexCoin native token, the Codex Protocol is open source, allowing third-party players in the A&C ecosystem to build applications that access, manage and modify the registry data. Codex’s landmark application, Biddable, makes it possible to bid and buy easily and privately in auctions with cryptocurrency. The Codex Protocol will be adopted by a Consortium of major stakeholders in the A&C space who facilitate over $6 Billion in sales to millions of bidders across tens of thousands of auctions from 5,000 auction houses in over 50 countries.
3) What inspired you to start building decentralized registry for the arts and collectables industry?
When I ran Lofty.com, I learned first-hand the challenges of transacting art and collectibles. Most of the problems are because it’s difficult to verify data about pieces, which makes it hard to know what they are worth. Blockchain presents a clear solution to this problem.
4) What are some of the problems you see with how unique assets can be verified, bought and sold currently?
Imagine you are a collector, and you receive an email from someone you’ve never met offering to sell you a Picasso. Today, the first thing you would do is ask where he got the piece and for any documentation he has about it. If he purchased it from a well-known auction house like Christie’s, does he have the receipts? Have any appraisers written reports about the piece? If he has documentation, how do you know it’s not fake? You would need to call the last seller, call the appraisers, previous owners, and anyone else who authored documents to confirm that the documentation is valid. Even then, how do you know he isn’t selling ten copies of the piece to ten different people using ten photocopies of the documentation? You probably need to hire an appraiser to do all of this research, which is costly and slow. Meanwhile, someone else might buy the Picasso instead. This is the status quo, and in spite of everything, hundreds of billions of collectibles trade every year.
5) How will Codex Protocol change how people invest in the arts & collectables space? Is it even a good idea to be vested in any arts and collectables to begin with?
Codex empowers collectors and investors to purchase A&C with much greater confidence in the worth and integrity of works. This will enable faster transactions, easier cross-border movement, and, over time, a reduction in the costs associated with owning A&C. Having an efficient asset registry also enables alternative models such as fractional ownership for investors.
Why invest in Art and Collectibles? First, it’s one of the best performing assets of the last ten years, with returns from 100%-400% by category. Second, it’s uncorrelated. High net worth individuals have been using art and collectibles for hundreds of years as an uncorrelated store of value, which means it holds value in times other assets may decrease. These are really important benefits.
6) How does blockchain technology help the Codex Protocol accomplish these things?
The Codex Protocol is as an asset registry tailored for A&C objects. A Codex Record preserves all information about a piece, including the evidence of ownership and transmission, and other metadata such as documentation (e.g. photographs, past appraisals, receipts, restoration records, etc), information stored on the Record by third-party apps and services like liens or storage facility environmental controls, and the opinions of validators who vouch for the items.
By tracking ownership and transmission in an immutable history on the blockchain, the Codex Record provides a way for everyone to verify ownership. In doing so, it is decentralized, anonymous and trustless, such that owners don’t have to identify themselves nor does any central authority need to know their identity. This need for privacy is what has prevented registries from succeeding in the past, but blockchain enables enthusiastic adoption.
7) Can you tell us more about the technology and components of the Codex Protocol that make it function?
The initial implementation of the protocol is built on the Ethereum blockchain. It is our point of view that Ethereum is the premier blockchain solution to build upon. Its consensus algorithm is battle-tested and has a rich developer ecosystem that allows our community to build faster and more securely than what is possible on other blockchain platforms.
There are a few components to the protocol:
• The Codex Registry, which is the ERC-721 smart contract
• CodexCoins, the ERC-20 utility token which are used as fees for write operations in the registry
• The staking contract, where token holders can stake tokens to receive a discount on token fees
• The proxy contracts, from which the core contracts are accessed through
The implementation of each of these components is available on GitHub (https://github.com/codex-protocol) under an open-source license.
8) Assuming a blockchain-based registry is a prudent idea, it will only be effective if a considerable number of people adopted it as an industry standard. How do you plan to get enough market share to have ‘critical mass’ so to speak?
A registry only works insofar as it is adopted as a standard. To that end, we have established a consortium of leading online marketplaces, software providers and auction houses with operations spanning over 50 countries who have agreed to support Codex. Together, they give Codex access to 10+ million items per year worth over $6 Billion from 5,000 auction houses. They support Codex as an open and decentralized protocol that anyone can integrate with. Because of the consortium, Codex will quickly be accepted as the standard.
9) How does CodexCoin offer integral and functional value to your ecosystem? Why is it necessary?
CodexCoin are used to pay codex fees for transferring and amending Records, which are discounted or waived for users and applications who stake lots of CodexCoin. These fees are in turn used to rewards validators, and we’ve designed CodexCoin so that validators can’t sell them right away. This design ensures that incentives are aligned within the ecosystem and all the users have a reason to engage in positive behavior. CodexCoin are also important for governance – over time we intend for decisions about how CP works be governed by a vote-based system, where tokens correspond to votes. We don’t think the system would work successfully without the cryptocurrency we’ve designed.
10) How much do you intend to raise in the Codex Token Sale and what are the steps for contributing?
To read all the specifics of our token sale, please visit: https://codexprotocol.com/token-sale.html and be sure to sign up between July 2nd-6th!
11) What were some of the biggest challenges you encountered while working to launch your ICO?
Our challenges are likely similar to any ICO; cutting through the noise and taking a journey down a path that is pretty new. The blockchain space has exploded in the past year, with dramatic market movements and the largest conferences having quadrupled in size. There is strong interest in cryptocurrency, but there are still a lot of unknowns in the space.
On the other hand, we’ve been described as a “breath of fresh air” and an impressive use case by those who are watching the technology ecosystem expand, so navigating these challenges has been rewarding and fun.
12) What’s going to happen to the Codex Protocol after the token sale concludes and what where do you see things in 5 years?
Codex Protocol is backed by a consortium from the art and collectibles market, which ensures it will be supported and actively developed by the ecosystem, as well as adopted by thousands of auction houses. Our priorities are to support their adoption and incorporate their feedback into the Protocol, as well as that of the community and other application developers.
13) What are your marketing and sales strategies to achieve that?
Codex values the feedback of our community and a big part our strategy is to listen closely to it. To that end, we’ve launched bounty programs for our initial dapps where early adopters can earn CODX for participating in tasks and finding bugs.
Furthermore, through the consortium we’ve mentioned and the partnerships we’ve established, we’re executing on the vision of establishing an ecosystem that will grow organically. We expect most users will interact with Codex through applications built by app developers in the Codex Ecosystem. In our white paper (https://us.codexprotocol.com/#whitepaper), we outline a detailed plan and our progress for expanding this ecosystem. The most important part is working with our consortium to ensure that thousands of auction houses use Codex Protocol.
14) Do you have more information for our readers?
The best place to stay in touch with Codex is on Telegram https://t.me/codexprotocol. To learn more about Codex Protocol, our partnerships, and our initial dapps, Codex Viewer and Biddable, visit our website: https://www.codexprotocol.com/.