Tokenising Art vs the Traditional Gallery Deal: What Every Australian Artist Should Know

Tokenising Art vs the Traditional Gallery Deal: What Every Australian Artist Should Know

Why “selling your canvas once” may no longer be the whole story – and how a good contract can protect your rights and royalties

At DesignWise Legal, powered by Sharon Givoni Consulting, the focus is on helping designers and artists turn creativity into something protected, respected and profitable – with practical tools you can actually use.

Whether the work is a fabric print, logo, illustration, furniture piece, digital artwork or a full brand system, it is more than “just a design” – it is IP, and it needs looking after. Australian law can be confusing on where copyright stops and design registration starts, how contracts should deal with freelancers and clients, and what happens when someone copies work off Instagram or Pinterest, so the site offers ready‑to‑use legal templates and step‑by‑step seminars to guide you through these issues in plain language.

The aim is to bridge that gap in clear, practical language. That can mean registering designs, sorting out copyright ownership in briefs and commissions, drafting usable licences, or dealing with online infringements. It now also includes newer issues like NFTs, tokenised art and digital licensing, where traditional IP rules still apply but the contracts and platforms look very different.

Designers and artists do not need to become lawyers; they just need a lawyer who understands how they work and can step in to protect their rights so they can focus on creating.

New ways of selling art for artists – tokenised art

Most artists are familiar with the traditional model: you create a painting, take it to a gallery, and hope it sells. If it does, the gallery takes a commission (sometimes a big one) and you get one payment. After that, the artwork may change hands many times, but you usually see none of that extra money.

A new model is emerging, especially with blockchain and “real‑world asset tokenisation”.

Instead of stopping at the first sale of the canvas, your artwork can be turned into digital tokens that are bought and sold online. Done well, this can mean ongoing income for you. Done badly, it can be confusing, risky, and unfair.

This blog breaks some of the main points down down in simple terms.

The “normal” way: gallery and commission

Here’s how the usual arrangement works for many artists in Australia:

You sign a consignment or agency agreement with a gallery.

The gallery shows your work, promotes it, and (hopefully) finds a buyer.

When the artwork sells, the gallery takes a commission (often 30–50%) and you get the rest.

Legally, once that first sale happens:

• The buyer owns the physical artwork.
• You generally keep your copyright, unless you’ve signed it away or given a licence for certain uses (for example, on a website or in a catalogue).

If the buyer later sells the work for a much higher price, you usually don’t share in that extra profit, except in limited circumstances under Australia’s resale royalty scheme.

For most artists, income usually stops after that first sale, even if the work becomes very valuable down the track, subject to one important exception – Australia’s statutory resale royalty scheme.

Under that scheme, visual artists are entitled to a 5% royalty on certain eligible resales of their work, but in practice it can be hard to monitor and enforce because: resales may happen privately or overseas, not all sales are reported, and artists often have little visibility of what happens to their works once they leave the studio or gallery.

Tokenising real‑world art – what is it all about?

Tokenisation sounds technical, but the idea itself is simple. Here is how it works:

Step 1: The painting stays in one place

Think of your painting like a special artwork kept in a museum storeroom. The actual painted canvas stays in one safe place and doesn’t move, but tickets linked to it can be traded. The token is that digital ticket. It moves between people online, while the painting itself stays put. It doesn’t move.

Step 2: A digital “ticket” is made

Then a digital “ticket” (called a token) is created on a system called a blockchain. This ticket is linked to your specific artwork and can be bought and sold online.

Step 3: One ticket or lots of tickets

The project decides how many tickets there are:

• sometimes 1 token = the whole artwork;
• sometimes there are lots of tokens, like slices, so many people can buy a small piece.  Sometimes the artwork is broken up on paper, not in real life.
• That means they might make, say, 100 tokens for one painting. Each token is just “1/100th of the deal”. It doesn’t matter which token you get – Token #7 isn’t a different corner of the canvas from Token #42. They’re all just equal slices of the same thing, like owning 1 share out of 100 shares in a company.  Sometimes the artwork is broken up on paper, not in real life – the canvas stays whole, it’s just the deal around it that’s sliced up.
• It doesn’t matter which token you get; they’re all equal. Put another way, it’s like owning 1 share out of 100 shares in a company – you don’t own a specific brick in the building, you own a small slice of the whole thing.

Step 4: You still sell the real painting once

You – the artist – still do a normal sale of the physical canvas once (usually to the platform or a collector). You get paid for that sale, same as usual.

Step 5: The buyer sells the tokens

After that, the buyer turns around and sells the digital tokens that point to your artwork. Those tokens move between people online. The tokens travel, the painting stays put.

The Golden Question – Why would anyone buy a token if they don’t get the painting?

Because they’re really buying money chances and perks, not wall art.

In other words, when someone buys a token, they’re basically buying a share in the deal around the painting, not the painting itself.

By “chances and perks” we mean things like:

• they hope the token goes up in value so they can sell it later for more;
• they might get a slice of future money the artwork makes (if the deal is set up that way);
• they might get special access, like invites to events, private online groups or some kind of VIP status that only token holders get.

People buy these tokens for very different reasons than they buy a painting to hang on their wall. The token can give them exposure to the value of the artwork – they’re hoping that if your work becomes more famous, the token will be worth more and they can sell it later at a profit.

It can also come with extra perks or rights, if the platform chooses: early access to new drops, invites to events, membership of a private online group, or even a small share of money if the artwork is sold or the project makes profits. So the buyer isn’t buying wall art; they’re buying a digital pass that is financially and socially tied to your work, even though the real canvas never leaves storage.

For artists, the really interesting twist is what can happen with money over time. In a normal gallery sale, you sell the artwork once and get paid once. In a good token deal, you still get that first sale price for the physical piece, but the contract can also say that every time a token is resold, you get a cut of that resale – for example, 30%. That cut (royalty) can be built into the token system itself so that whenever the token trades on supported platforms, your share is worked out and, in theory, paid to you automatically. So instead of “sell once, get paid once”, it can become “sell once, then get a slice every time the token trades”.

If your work takes off and the tokens are bought and sold often, that turns into an ongoing income stream that doesn’t exist in the old gallery‑only model, where you almost never share in the profit when your work is resold.

Benefits of tokenisation if you are an artist?

If the contract is drafted well and the platform is reputable, tokenisation can offer several potential benefits:

1. Ongoing royalties: You’re not shut out of future profits if your work becomes more valuable and trades many times.
2. Global reach: Tokens can be traded worldwide, so more people can discover and engage with your work.
3. Transparent records: Blockchain can provide a public record of token trades, adding to provenance and tracking.
4. Clear IP control (if drafted properly): You can keep your copyright and only grant a limited licence (for example, to show photos of your work on the platform, in catalogues or in the press).

These features are especially attractive to younger or digitally savvy collectors and artists who are used to online markets and want something more flexible than a single gallery sale.

What can be risky or confusing?

There are also real risks and traps, especially if you sign a one‑sided or unclear agreement:

Not getting what you think you’re getting:

If the contract doesn’t clearly say what the token actually represents, everyone can be confused. Does the token give any ownership in the artwork? Just a claim on some money? Or is it just a collectible entry on a database?

Regulation and “financial product” issues:

Some tokens may be treated like financial products (similar to securities or managed investment schemes). If the documents and marketing are sloppy, an artist might accidentally look like they are “issuing” or “promoting” an investment, which raises regulatory questions.

No real enforcement of royalties:

If the platform promises you royalties but does not properly code them into the smart contract or doesn’t keep proper records, you might be relying on trust rather than enforceable rights.

Loss of control over how your art is shown:

Without strong clauses on how your work and your name can be used, your art could end up displayed next to material or in contexts you don’t agree with, which can damage your reputation and brand.

Unclear responsibility if something goes wrong with the physical artwork:

If the artwork is damaged, destroyed or lost while in storage, what happens to the tokens and the royalties? A good agreement should answer this clearly.

How a good contract can protect you

For artists, the contract is everything in these arrangements. Key things a lawyer can help with include:

As you can see, once you move into token deals there are many extra things that can trip you up – from what the token actually means, to how you get paid, to how your work and name can be used, to who is on the hook if something goes wrong. All of that has to be handled clearly in the agreement, or you risk losing royalties, control of your images, or even being dragged into investment‑style problems you never intended to be part of.

Because this area mixes art, IP, contracts and financial rules, it’s not something most artists should try to sort out alone or with a random template. A lawyer who knows this space can translate the offer into plain language, spot the traps, and shape or check the agreement so it really matches what you think you’re agreeing to – and that’s exactly where we can step in to help.

How we can help artists with token deals

If you’re an artist being offered a “tokenisation” or “RWA” deal, it’s completely normal not to understand the jargon. You don’t need to be a blockchain expert – you just need to know what you’re signing, what you get, and what you risk.​

Further reading for Designers

Sharon Givoni, “Protect Your Art: A Guide for Designers” –
https://sharongivoni.com.au/legal-insights-for-graphic-designers-and-surface-designers/

“Non‑Fungible Token (NFT)” (Arts Law Centre of Australia) –
https://www.artslaw.com.au/information-sheet/non-fungible-token-nft/

“What is Art Tokenization and How Does it Work?” (Degen House blog) –
https://www.degen.house/blog-posts/what-is-art-tokenization-and-how-does-it-work

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Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.