Tokenised investment-grade diamonds can now be enjoyed as jewellery and re-tokenised for investment trading
Icecap, a platform that offers investment-grade diamonds represented by non-fungible blockchain tokens on the Ethereum blockchain, has announced a new option for holders of its diamond-based tokens wherby the diamond can be enjoyed as jewellery while in an investment portfolio.
Icecap uses the Ethereum ERC-721 standard to create a blockchain token for each individual diamond it offers. The token can be sold back-and-forth on NFT trading platforms such as Opensea.io in a frictionless environment, while the diamond itself remains in an insured vault facility in New York City.
Icecap has now expanded this program to allow a token owner to redeem the token, take possession of the underlying diamond, enjoy it as jewellery for months or years, and then re-tokenise it later so it can be placed back into the blockchain-based marketplace for trading purposes.
“Up until now, a token buyer had only two choices,” says Jacques Voorhees, Icecap CEO. “They could either keep the diamond in tokenised form while the diamond itself remained in an insured vault, so its token could be traded in a frictionless environment; or they could redeem the token and take delivery of the diamond to enjoy as jewellery. But at that point the token is burned, and the diamond is not able to be traded or liquidated as part of an investment portfolio.”
“But with this new service, the best of both worlds are possible,” Voorhees continued. “Any token owner can now take possession of the diamond immediately and enjoy it as jewellery. Later, a small re-tokenisation fee is charged to place the diamond back in the vault facility, and the diamond is represented again via a token which can be traded in a frictionless environment.”
Because it’s an investor-oriented marketplace, Icecap diamonds are sold at merely five percent above wholesale cost. By comparison, aggressive e-tailers markup diamonds approximately twenty percent, while brick-and-mortar stores generally markup twenty-five percent and above.
“There is no longer a reason investment-grade diamonds, purchased as part of a hard-asset portfolio, shouldn’t also be used for adornment in the meantime,” says Icecap Chief Operating Officer, Krista Olson Blundell. “Investment-grade merely means the diamonds are verified to extremely exacting standards, beyond what a GIA certificate provides. The grading is actually guaranteed, and the diamonds are immune to the gemological problems that occur with non investment-grade stones. This tight verification is because investment-grade diamonds must be able to be sold as easily as they are purchased, and this exacting grading process ensures that’s possible. However, this just means investment-grade diamonds are that much more beautiful, and that much more worthy to be showcased as jewellery.”
“A hard asset portfolio partially diversified into diamonds, where those diamonds can be worn in the meantime by a loved one, yields double-value,” continued Voorhees. “You’re investing in both hard assets and in a relationship. In fact, an investment-grade diamond set in an engagement ring guarantees not only a diamond that is forever, but value that is forever as well.”