How ArtBlocks Automates its NFT Accounting Workflow With Bitwave
From revenue recognition and reconciliation to secondary royalty payments to creators, learn how ArtBlocks mastered NFT accounting.
About Art Blocks:
From algorithmically generated squiggles to extravagant, boundary-pushing collections, Art Blocks is redefining art for a new, digital-first generation. Less concerned with landscapes and avatars, this Marfa, Texas-based based group marries creative coding with blockchain technology to establish a new paradigm for the creation and ownership of art.
User: Kate Venturina, Corporate Controller, Art Blocks
Accounting System(s): QuickBooks Online, NetSuite
Use Case(s): NFT Accounting: Revenue Recognition & Reconciliation, Secondary Royalty Payments to Creators
Bitwave Customer Since March 2021
The Challenge: On-Chain Revenue Recognition At Scale
As an NFT creator platform, Art Blocks earns all of its revenue from on-chain transactions. On the surface, tracking, converting to USD, and reconciling these transactions on a real-time basis might appear straightforward, but the blockchain can be surprisingly difficult to pull data from.
The nature of Art Blocks’ business meant that they were integrating with Ethereum and marketplaces at a massive scale, and accounting for hundreds of thousands of transactions a year of revenue across these channels is easier said than done. For example, the way OpenSea pays out on chain revenue is markedly different from Rarible, and so on.
Art Blocks needed a solution to easily ingest its disparate revenue streams and categorize them into their accounting system for revenue recognition, reconciliation, and gain loss tracking. And they needed it fast.
The Solution: A Fully-Automated Back-Office Digital Asset Platform
After seeking accounting advice from a CPA, Art Blocks began searching for a solution that would automate many of their basic accounting needs while being elastic enough to scale with the fast-growing organization.
Fortunately, the CPA was part of Bitwave’s extensive partner network and recommended the solution to the team. And running their due diligence, it was clear that Bitwave was the only solution that could handle their needs while seamlessly integrating with their general ledger.
Bitwave’s solutions team then stepped in to help with setup and implementation. Art Blocks finally had a single source of truth for their bookkeeping and could get fair market value into their accounting system.
The Result: One-Click Revenue Recognition and Reconciliation
“I can’t imagine a world without Bitwave,” says Art Blocks’ Corporate Controller Kate Venturina. “Without Bitwave, it would be impossible to get all the data you need to complete the close process and accumulate our revenue directly from the blockchain,” she continues.
Bitwave saved the Art Blocks team hours from the headache-inducing task of downloading transaction data from EtherScan and recompiling them in a spreadsheet. But with Bitwave, “you have complete visibility to all of your transactions at any given time, which makes bookkeeping so easy,” Kate says. “In just a click of a button, all my transactions are moved from Bitwave to QuickBooks. The process is that seamless,” she finishes.
Today, Bitwave is so integral in Art Blocks’ accounting workflow that it was a key consideration in Kate’s consideration for selecting a new accounting system. A decision that came as a symptom of Art Blocks' success. They simply needed a new solution that could handle the scale in which they now operate.
“How integrated are they with Bitwave? What is the relationship between the software? It’s been very important in our process,” Kate finishes.
Want to learn more about Bitwave’s NFT accounting treatments? Schedule a demo today.