Africa’s first fine wine NFT auction explained
South African auction house Strauss & Co has partnered with five of the country’s top wine producers to offer Africa’s first fine wine non-fungible tokens (NFT) on auction from 18-25 April. How we made it in Africa takes a closer look at the initiative and how wine NFTs work.
First things first. What is an NFT?
For those still struggling to wrap their heads around NFTs, here is another explainer. An NFT is a digital ownership certificate. It usually represents the ownership of something physical or digital. Recently, NFTs have become very popular for the ownership of digital artwork – in this case the NFT shows who the current owner of the artwork is, and also provides a link to the artwork itself. However, an NFT can also represent ownership of other digital items, such as a concert ticket or membership of an exclusive chatroom. NFTs can also be used to represent ownership of things in the real world, much like your car’s registration certificate is proof of its current owner.
An NFT lives on a global ledger of ownership called a blockchain. You own an NFT by having it in your blockchain wallet. If you purchase an NFT, you need a wallet in which to store it. Similarly, if you sell, ownership will transfer to the next owner’s wallet.
NFTs use a type of programmable ownership, and their rules can be set by their creators. For example, the NFT’s “smart contract” may require that each time the NFT is traded, 10% of the sales price goes to the artist who created the work, or to a charity of the creator’s choice. These rules are automatically enforced when an NFT is traded on online markets
How does a wine NFT work?
In a sense, the NFT itself is neither particularly interesting, nor of any real value – in the same way that your car registration certificate is a pretty boring read, on pretty cheap paper. However, the NFT may represent ownership of something valuable. For example, the NFT may give the holder full commercial rights to a digital artwork. The value of the artwork is determined by the open market, by what collectors are willing to pay for it. Similarly, an NFT that allows the holder to redeem a bottle of 1947 Château Doisy-Vedrines may be quite valuable, whereas one representing a bottle of supermarket plonk less so.
An NFT can represent ownership of a case of fine wine, and may indicate the wine’s name and vintage, and the cellar where the wine is stored. What makes NFTs attractive in this regard is that they can be collected and traded without the need for the cellar to keep track of the current owner – and without the wine ever leaving the cellar until it is ready to be drunk. And this makes the lots on offer at Africa’s first fine wine NFT auction by Strauss & Co all the more interesting.
Which wines are on offer through Strauss & Co’s wine NFT auction?
Capturing past, present and future vintages, these unique digital contracts encompass vertical collections of Klein Constantia Vin de Constance, Kanonkop Paul Sauer, Meerlust Rubicon, Mullineux Olerasay and Vilafonté Series C. Each NFT holds between 20 and 50 vintages, with collections from 66 to 288 bottles. Individual bottles within the NFT is also minted as an NFT, allowing for drinking or trading of single bottles at any time. The digital contract, stored on the polygon blockchain, includes all the provenance, pricing, transaction, sensorial and aging information. Once auctioned, the NFTs can be traded by the owner on any platform, increasing its liquidity and target market across the world.
The following wine NFTs are on auction:
Strauss Rubicon 80-34 NFT includes the first 50 vintages of Meerlust Rubicon in varying quantities to total 288 bottles. Meerlust Estate in Stellenbosch has been the pride of the Myburgh family since 1756, while the Bordeaux-inspired Rubicon was born in 1980. Estimates at R550,000 – R750,000 ($37,475 – $51,103)
Strauss Vin de Constance 86-27 NFT offers the first 40 vintages of Klein Constantia’s world-famous sweet wine made from Muscat de Frontignan. Vin de Constance is the re-creation of the legendary Constantia wine made in the 18th and 19th centuries, sought after by the likes of Napoleon, King George IV and King Louis Philippe. The NFT includes 1986 through to 2012 in 500ml bottles of varying quantities depending on their rarity. Estimates at R550,000 – R750,000 ($37,475 – $51,103)
Strauss Series C 03-27 NFT captures a six-bottle case from each of the first 25 years of Vilafonté, a partnership between Mike Ratcliffe and US wine royalty Zelma Long and Phil Freese. The consistently long-aging, fine wines have been high awarded, and Vilafonté was recently crowned ‘Outstanding Wine Producer’ and ‘Best Red Wine Producer of the Year’ by The International Wine and Spirits Competition. Estimates at R550,000 – R750,000 ($37,475 – $51,103)
Strauss Olerasay 1-20 includes the first 20 iterations of Mullineux Olerasay, the benchmark Chenin Blanc solera-style sweet wine. Established in 2007 by the husband-and-wife team, Chris and Andrea Mullineux have, in a very short space of time, established Mullineux as one of South Africa’s most celebrated producers. Estimates at R250,000 – R350,000 ($17,034 – $23,848)
Strauss Paul Sauer 00-25 spans all millennium vintages through to the 2025 release. The 66-bottle lot includes single bottles from 2000-2017 with a six-bottle case from 2018-2025. Paul Sauer is Kanonkop’s internationally acclaimed, long-aging Bordeaux blend. Estimates at R150,000 – R250,000 ($10,221 – $23,848)