Non-fungible tokens (NFTs) may still be associated with pixel art or avatars, but startup company Farandole is building a business model to connect NFTs to wine investors, hoping to open the industry to the unfamiliar and bring the benefits of blockchain to a centuries-old business model.
Forkast’s Ningwei Qin talked with Farandole’s CEO, Maxime Hamonic, about the platform and how NFTs can also be integrated into wine investing, the winemaking process, and building community.
(The following Forkast interview has been edited and condensed.)
Ningwei Qin: Could you explain your NFT marketplace?
Maxime Hamonic: The platform’s name, Farandole, comes from a dance in the south of France in which dancers take each other’s hands and form a chain. It reminds me a bit of blockchain.
My family has a history in producing wine in the south of France in Languedoc, and Limoux — Limoux has been the birthplace of sparkling wine since the 16th century.
So the platform is about selling NFTs linked to wine, but not just for purchasing wine and spirit cases and bottles, but also for building a community. Program membership relates to wine and spirits and events.
Qin: How does the platform work? How can I get an NFT — or a bottle of wine from your platform?
Hamonic: When you purchase an NFT on the platform, you also get a physical bottle of wine that is 1:1 pegged with the NFT. The bottles are stored at the cellars that we partner with or even the personal collector’s cellar until the NFT owners want to redeem them.
Platform users will also have royalties from NFT trading and the wine’s brand and producer can have a commission on secondary market sales, which they don’t currently have. Also, you have wine collectors, who usually want to sell the collection using auction houses or other wine merchant services, and they will also have royalties.
By definition with the NFT technology, you have a royalty fee included. The royalty fee will go to the different stakeholders of this industry. So obviously to the winery, the producer, and some intermediate stakeholders, because we don’t want to replace the stakeholders at all.
And the royalties are for individual collectors, too, and help to reduce auction fees if they want to sell a bottle. The auction fee for bottles is quite expensive, and a collector would not get any commission for that. But through the NFTs, if they sell the product NFT and it continues to be traded repeatedly, they will continue to benefit from it. We also insure the bottles and will replace them at the market price if anything happens.
We actually use a blockchain mechanism called staking. So you will earn founder tokens while your wine assets are at the warehouse. Staking is what many decentralized finance platforms provide when you keep your cryptocurrencies on these platforms. And to do so, you use smart contracts, which are the safety net, the algorithm to keep your assets safe.
And we’re planning to expand the business to wine futures. This means we’ll sell the NFTs that are pegged with the barrel — wine is kept in the barrel for some years before being bottled. When the wine is bottled and redeemed by the owner, the NFT will be burned and replaced by a digital collectible that an owner can showcase in their virtual cellar.
Qin: How do the bottles travel?
Hamonic: What we want is to have the bottles travel the least. So we incentivize our investment users to keep the bottle at the warehouse. This can be at the winery or at one of our partner warehouses. Most of the time the wine will already be in some warehouses in Hong Kong, Singapore, and Switzerland.
A user will have the NFT animation of the wine and you can keep this in your virtual cellar. So if you also want to showcase your collection and discuss it with other wine and spirits enthusiasts, it’s possible. So really, we have this sustainability asset aspect in mind. We want to have the least amount of travel possible, which is better for the environment and better for the quality.
Qin: How can you guarantee the wine is authentic? Can NFT solve this problem?
Hamonic: Before blockchain, many companies were trying to tackle those issues of wine authentication and provenance check. This can be solved without an NFT, such as with Internet of Things (IoT). You also have RFID (a technology that uses electronics to automatically identify and track tags attached to objects). And QR codes work.
However, we can also track wine in barrels using permanent data on the blockchain to solve the problem of authenticity and provenance. And for the existing bottle, we use the information we have at our disposal, and we also bring that into our platform to show on the blockchain and with the back-office interface.
Qin: Why choose NFTs for such a centuries-old industry?
Hamonic: What NFTs are really bringing here is an additional layer of user-generated content, a bit like social networks brought to the internet for Web 2.0 with all the social networks. They help create your uniqueness and gravity as part of a community you can contribute to. You also have the decentralized autonomous organization, the DAO. As an NFT holder or token holder, you have some voting rights and can contribute to the direction of the project.
For wine producers, they can know who consumers purchase from. With this information, they will be able to provide dedicated services to the end-users about the wine. So we are helping the brand connect with the end-users, facilitate the creation of the services through NFTs and organize physical and virtual experiences.
When brands sell their products to a common e-commerce platform, they don’t really know who the consumer is. It’s almost like a wall, and they don’t know where the products are. But this is something that blockchain technology enables and it’s gold to the brands.
Qin: A recent bank report said millennials and GenZ are not really into wine and liquor, while they are the most crypto savvy. How do you tackle that?
Hamonic: We are targeting the crypto savvy and many of them hold a lot of different NFTs from many different communities.
We also want to target the art, luxury, and fashion communities because we believe there are many synergies. So when you purchase this NFT, maybe you will buy it because you like the artist who made the wine label. Perhaps you will buy it because it’s happening at this event in a place you like.
We want to bring more users from different age ranges. We want to get the connoisseur, also the people who have been collecting wine and spirits all their lives or even more recently. They will purchase the wine as usual and NFTs can allow for a physical or virtual visit with the producer. So for them, it’s a no-brainer. And we think such an NFT will interest people who like to attend exclusive events, such as in art galleries.
We also want to target a community that cares about sustainability. Being a part of the community a user can help provide liquidity before a harvest. Help the producer develop biotechnology, better agriculture. It’s a new way of crowdfunding.
We also believe there is an opportunity to educate about the process. It’s a natural product, and many of us are not aware of how it’s actually manufactured and the sustainability aspect. We don’t want to do mass consumption. It’s not about making volumes; it’s about doing quality.
Qin: What else can NFTs do to the wine industry?
Hamonic: Tokenization for the vineyard lets wine enthusiasts own a token that ultimately enables them to rent a part of the wine-growing process. Wine rental already exists but is not very commonly used and known. So an owner of the NFT will have the right to vote and create — it’s about bringing more consumers and users to participate, to understand more about the brands, about the producers, about the process.
It can also support the producers, the wineries, by providing liquidity beforehand, before the harvest. A new kind of crowdfunding, a similar concept exists for premium wine, where an investor can purchase the wine a couple of years before it’s bottled. And in that way you can help the wineries and the producer to face difficulties, such as weather that can damage harvests.
We are hoping to build up a DAO to merge both communities — the crypto savvy and the wine enthusiast. The crypto savvy and NFT holders like the projects they support. And because of all the NFTs, they will have new services coming with those new NFT drops. There will be invitations when we collaborate with other crypto projects — for example, GameFi.
The wine and liquor enthusiast is another community. We talk to them through the usual news, blogs, and newspapers channels. We specialize in spirit newspapers and we organize events like wine dinners like spirit tasting to make their experience what they really like, and what they already do.
And in this case, we will provide new rewards, which are NFTs, the same as when you attend an event and you get a voucher that you redeem later on. And also, we want to stimulate the usage of NFTs when we collaborate with galleries. We can see a lot of galleries that are specialized to display NFTs and that visitors can buy. We will educate a lot about NFTs and wine, so that’s how we want to merge both communities.
So the crypto enthusiasts can go onto our platform because they are curious to collect a new NFT or they see that there’s an investment opportunity because it’s backed by an actual asset. The wine spirits community can use our platform because we offer new services. And we also mentioned the art community — people that buy fine art, they also tend to buy fine wine.
We want to collaborate and have synergies with other communities. And so, in the art community, we want to have artists that will design digital wine labels and provide animation.
We will provide our founder showroom in the metaverse. So a brand can customize the showroom for a week or two or more to provide information about their history. So when the end user walks into the showroom, they will discover different paintings related to the brand, different bottles, different labels, etc.
Qin: Will you launch your metaverse on Sandbox, Decentraland, or more platforms?
Hamonic: So our first metaverse showroom will be in Decentraland. We are partnering with a company that designs virtual architectures. There will be an elegant, sophisticated showroom and wine bottles.
The second metaverse will be in Sandbox. So this one is more about gamification because it’s accessible on different devices, including mobile. We know that in (South) Korea, a lot of metaverse events happen, particularly in 2D. So it’s also something we want to provide as gamification.
Qin: And what other plans do you have in the coming months?
Hamonic: Working on fundraising. Working on new designs, new versions, and new features for the first marketplace. Looking at collaborations.
And we’re going to have staking for the founder token. Once the token is launched, staking will follow for those who are NFT holders and you have NFT bottles and NFT cases at the warehouse. After that, we will want to create this crowdfunding product when a user can rent a part of the vineyard and support the brand you bought from the producer.
So in conclusion, founders will have wine NFTs that offer traceability, authentication, and trade to bring better provenance. As explained, the NFTs offer benefits to all the stakeholders of this industry. We want to support the producers, and the wineries.
And NFT owners can showcase their virtual wine collection in the metaverse, and get services such as invites to wine tastings or physical visits to the producer, winery, and château.