Whether you're a crypto newbie or a seasoned day-trader, this guide will walk you through the basics of getting in on limited-edition drops as a collector.
Foundation is a crypto-powered marketplace where you can buy limited-edition art and goods from boundary-pushing creators at dynamic prices. It’s also a trading platform, where you can buy and trade creators’ markets, and turn a profit by selling an artist’s tokens when their value increases beyond what you paid.
In this guide for collectors, we’ll cover the basics of buying, trading, and redeeming tokens on our platform, so that the next time an artist you love drops with Foundation, you’ll be ready to get in early.
When a creator drops a limited-edition series on Foundation, our platform generates a unique cryptocurrency to represent it. We issue a limited number of tokens for that cryptocurrency based on how many pieces of art are available in the series.
Once a creator’s drop goes live, you can buy and trade tokens representing the artwork. From there on out, the price of the artwork will fluctuate based on supply and demand: When more collectors buy tokens, fewer are left on the market, and the artwork’s price will rise; when collectors trade the work back to the markets, there’s more supply and less demand, so the artwork’s price will dip.
An artist can enable trading for as long as they want, but once they’re ready to ship the artwork, you can redeem whole tokens to get the physical piece. Until then, you can capture profits by trading tokens back to the markets when the price of a token you’ve collected rises to a higher price than what you originally paid.
The magic here is that with every buy and sell you make, the creator earns a cut, too. With the dynamic participatory economy we’ve built with Foundation, creators and their supporters can collaboratively generate value around an artwork, and share in the resulting financial benefits.
BUY: When a creator drops limited-edition art on Foundation, you can buy it for the price you see listed using cryptocurrency or a credit card. Prices are determined by supply and demand, so you’ll notice the cost fluctuating over time.
TRADE: Instead of buying the item outright, you can buy a digital token that represents the item. Think of it as a certificate of ownership that can either be redeemed for the actual item, or traded back for a profit (or loss) as markets fluctuate. To buy and trade an artist’s tokens, you’ll need to use cryptocurrency (more on how to do this below).
REDEEM: Once a creator is ready to start shipping their goods, purchases will be fulfilled. Buyers who used crypto to purchase tokens can redeem those for the artwork itself.
In order to trade on Foundation, you need to use cryptocurrency (and not a credit card) to buy an artist’s token(s).
Foundation uses the cryptocurrency Dai to enable trading (read more about that here).
To start trading on Foundation, you first need to create an account and send some Dai to your wallet.
Once there’s Dai to spend in your wallet, it will show up in your Account tab.
The next step is to explore Foundation, and find an artwork you’re excited to invest in. Click Buy, and choose the option to buy the token representing the work instead of the item itself. This will enable you to trade the token’s dynamic market, or redeem whole tokens for the item itself later on.
You can buy up to three of each unique token—and as little as 0.01 of a token.
Once you’ve used Dai to buy an artist’s tokens, keep an eye on the price. If it rises above the price you paid—and you decide you’d rather capture a profit than own the artwork itself—you can trade token(s) back to the market. Any earned profits will show up in the Total Balance section of your Account.
If you want to try trading on Foundation but you don’t know how to crypto, don’t be scared.
The easiest way to set up a crypto wallet is with Coinbase. The steps to do that are below.
One thing to note is that Coinbase won’t allow you to send money to Foundation until your account is verified. This verification process makes Coinbase super secure—but for a new user, it can take up to 14 days to be verified. This means it’s good to set up a Coinbase account well before you’re looking to get in on a creator’s drop.
1. Get a Coinbase wallet. Head to www.coinbase.com and click Get Started. Go through the process of setting up and verifying your account (this can take up to 14 days).
2. Purchase Dai on Coinbase. Once your account is verified, go to Coinbase and click Trade. This is where you’ll purchase Dai. Once the amount you purchase shows up in your Coinbase Portfolio, it’s available to be sent to Foundation.
3. Log into Foundation. Make sure you have a Foundation account set up and are logged in via https://app.withfoundation.com.
4. Copy your Foundation address. In your Foundation Account, click Dai Balance and copy the address (the long series of numbers you see under Your Address).
5. Send Dai from Coinbase to Foundation. Back on Coinbase, click “Portfolio.” Scroll down and click on Dai in your list of assets. Then, click Send and paste in the address copied from your Foundation account.
6. Check your Dai Balance on Foundation. After you send Dai from Coinbase to Foundation, it can take a few minutes to show up in your Account page. Once you see it, you’re ready to start trading.