British expedition boat builder Arksen is developing a digital asset-based collateral program on its own initiative; if it works for one company, it should work for others.
“Creative” isn’t always a compliment in the realm of finance, but blockchain technology continues to find ways of generating real-world innovation across all industries. This applies even to the 2,500-year-old field of maritime finance, as high-end British boat builder Arksen can attest. As a convenience for digital asset holders who are in the market for its products, Arksen now accepts digital assets for payments and as collateral for its products.
Arksen makes explorer vessels for both the private market and for specialized marine science uses. Its affiliated Arksen Philanthropy funds projects and facilitates research to encourage a greater understanding of the world’s oceans. According to its website, “Arksen was created from the beginning to take a different approach to business, being driven by purpose, with a passion for adventure and the planet.”
So when an enterprise that manufactures and sells a line of goods as bespoke as superyachts opens up about how it connects with the blockchain space, it’s incumbent on the blockchain crowd to take notice. Here, then, is what digital asset projects can do to improve their adoption among builders and brokers.
Overcome the objection
"Even if we accept them, we'll never be able to spend digital assets because nobody else takes them,” many vendors still grouse.
The elegantly simple thing about Arksen’s approach is that the firm is not actually being paid in anything but sovereign, reserve currency. While this particular company had the in-house skill – and, more importantly, imagination – to start up this lending program, others might not. It might fall to the digital asset’s core team to help other merchants replicate the model and develop their own. Collateralized loans and leases are nothing new, after all. It’s just a matter of accepting digital assets as security. For the digital asset-holding buyer it's kind of like staking except that, instead of getting 8% interest, you get a yacht.
Customers can overcollateralize the value of the vessel, even before the build is complete. They could also choose to sequentially finance the build, requiring an initial deposit followed by a transfer schedule as the boat gradually comes to life. Arksen is working with some of its first buyers – large BTC and ETH holders – and third-party infrastructure providers. While it’s still early days, the management team expects this to become a significant proportion of Arksen revenues.
Correct the record about blockchain’s environmental impact
“Sustainability is a core focus at Arksen, and as such we have to ensure that any action taken is viewed through this lens,” according to the company’s website. “We understand that this not only relates to the design and building of our products but also internally and throughout our chosen partnerships.”
So if Arksen is eager to engage with digital tokens, that’s really quite an endorsement. There are hundreds of companies if not thousands that object to digital assets on environmental grounds. They might be basing their opinions on outdated information, though.
“The jury is definitely out on the net effect mining is having on the grid and therefore, by extension, the environment. Arksen is a data- and research-driven, pro-scientific enterprise that maintains an objective stance on the subject,” says Dominic Byrne, Arksen’s sales and marketing director. “There is compelling evidence that mining operations can have a net positive effect on global energy markets – by being the buyer of stranded energy, for example – and that mining operations are increasingly becoming renewably powered.”
The proof-of-work consensus algorithm that fueled bitcoin and other early-mover tokens is indeed on the decline. It is still very much a thing, but it has moved – or been moved by hostile regulators in China – away from high-polluting coal-fired power plants toward such renewable sources as hydroelectric power in North America or geothermal in Iceland. Byrne points to a Harvard Business Review article that explains how the high quantity of energy required by mining these coins does not necessarily translate into carbon emissions.
While Arksen’s leaders have made it their business to know this, other merchants might need partners in the digital asset space to demonstrate how the environmental impact has diminished over time.
Pick the right merchants
Digital assets are still in relatively few – and well-adorned – hands. This is the time to onboard the purveyors of bespoke goods and services. Those are the ones that are currently selling well. The big-box stores will follow.
“We view the current market conditions as a very timely opportunity for prospective customers to work with us,” said Byrne. “When posting a volatile asset as collateral, it is generally best to do so when the value of the asset is low rather than high given that the purchaser would likely have to post more margin in the latter case.”
Arksen now accepts BTC, ETH and USDC. For specific terms and conditions of their digital asset-collateralized finance program, contact the company directly.
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