Oriental Culture Holding Ltd (Nasdaq: OCG) recently released an announcement that the HKDAEx Limited--the Company's wholly-owned subsidiary in Hong Kong, will provide services to create and mint NFTs for cultural and artwork collections and the sales, auctions, and trading of NFTs through its e-commerce platform.

Lewis Wan, Chairman of Oriental Culture, said: “non-fungible tokens are unique, non-interchangeable and non-identical, and represent the new type of ownership of digital assets encoded on a blockchain. The Company is dedicated to build a leading platform that provides comprehensive services from creating and minting NFTs for cultural and artwork collections to the sales, auctions, and trading of NFTs on our online platform.”

The online collectibles and artwork e-commerce service provider has laid much groundwork for the NFT-related services business. Last week, the company just signed a memorandum of understanding (MOU) with Heng Well Information Technology Co. ('Heng Well'). Heng Well is an innovative high-tech company focusing on information technology and was a member of the first National Blockchain and Distributed Accounting Technology Standardization Technical Committee in China.

According to the MOU, the two parties agree to hold regular meetings between their senior management to provide "guidance, support, and supervision of the development of new business". The parties will develop blockchain+ and NFT related services and business for cultural and artwork products by taking the advantage of Heng Well's strength in blockchain and NFT. And the Company will draw on its extensive knowledge and experience in cultural and artwork products market to expand the trade in cultural and artworks and engage a wide range of the population in the collection, trade, and communication of cultural and artwork products in different forms.

Photo by Andrey Metelev on Unsplash

The development of the NFT business is seen as an important strategic move by the company, and venture into digital cultural business is also pitched as "another milestone of the Company in its efforts to create a comprehensive e-commerce service chain". Oriental Culture suggested that more blockchain-based services will be offered to facilitate the development of NFT business and relevant services.

NFT is a form of digital ledger stored on a blockchain. It facilitates the trade of a particular digital product or physical asset in the Metaverse through the unalterable and indivisible sequence code that it forms and the transaction price it records. The tie with Heng Well paves the way for Oriental Culture's future NFT related services business.

In the world of Metaverse, NFT is conceived as a sort of currency that can price "treasures" in different kinds of digital form, thus providing convenience for the transactions of digital or physical assets in every aspect of life. Products associated with NFT can be an internet creation of art, a special web domain, existing legacy calligraphies or paintings, etc. By and large, the new NFT business is Oriental Culture's attempt to integrate realistic auction services with NFT technology.

NFT as a new way in the auction industry

Oriental Culture used to be a trade service provider for artworks that charges commissions on the services it offered. The Hong Kong-based company is also the world's biggest transaction service provider of banknotes, stamps, building online and offline trading channels for devotees of stamp collection. At the same time, the company engages a wider range of art collectors, art dealers and owners with its services in a larger trading network.

As of the interim of 2021, a total of 187 types of collectibles and artworks were listed and traded on the platform, including teas, vintage wines, jade sculptures, stamps, coins, paintings, and multiple other categories. Meanwhile, the number of active trading users on the platform reached 116,000, and the total value of transactions reached $10.8 billion.

With the qualification to trade cultural valuables at auction, Oriental Culture focus on expanding a wider range of the population in the exchange of artworks through its integrated online and offline marketing. The traditional trading market of collectibles and artworks enjoys a solid market size, which is also on the rise and requests more diverse needs of services. However, online trading of pricey collectibles seems to hide more risks that disturb those cautious Chinese customers to place a deal.

But things have changed. The introduction of NFT proves a boon to the development of online trading services of artworks while Blockchain technology can resolve customers' concerns over the authenticity of collectibles traded online. For NFT buyers, an auction works out to be the optimal solution to assess the value of collectibles and is more evenhanded as a price responder. In the future, financial transactions for non-standard assets would become easier by further adoption of NFT technology, which would also be used as a tool to bolster the company's other businesses.

Oriental Culture saw an eye-popping achievement in the first half of 2021. Throughout that period, the company achieved a nearly nine-fold increase in revenue to US$ 24.46 million, and a net income of US$ 10.10 million, a sharp increase by 2601.8% over the same period of 2021 due to the gradual recovery from the Covid-19 pandemic.

Mr. Yi Shao, Chief Executive Officer of the Company, commented that despite the company's business being heavily impacted by the outbreak of the Covid-19 pandemic, the art, and collectible market has bounced back, and the company's business operation has returned to normal as the pandemic has mostly been under control in China and a series of new consumption stimulus was launched by the government. The rapid increase in new customers and marketing activities helped drive up the number of new listings, the volume of transactions as well as the company's revenue and profit.

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