HB Antwerp launches rough diamonds with digital twins

January 22, 2022 – This article was published in the Belgian Economic newspaper, De Tijd 

The diamond company HB Antwerp will soon launch rough diamonds with their digital twins that owners can access virtually. “The NFTs may eventually become worth more than the original real diamonds.”

For centuries, Antwerp has been known as one of the world’s foremost centers for cutting rough diamonds. HB Antwerp, a technology company focused on diamonds founded only two years ago, may help the city reach that same status in the virtual world.

Virtual luxury rodents

Just before Christmas, Signum launched twelve digital diamonds in the shape of cartoon bunnies. The NFTs, or digital certificates of ownership, linked to those virtual luxury rodents were sold out in just three minutes for more than 6,100 euros each.

Yet it is about much more than jumping in on the NFT trend, emphasized Shai de Toledo and Rafael Papismedov, two of the co-founders of HB Antwerp. “For us, this is the way to show that all the data we collect, from when the diamonds come out of the ground, is made available transparently and can be controlled,” says de Toledo. “We are working with Microsoft to verify the rocks we mine in Botswana and the royalties we pay to the government there. The company believes so strongly in our story that they decided to make a film about the quantum shift in the diamond industry that we are initiating with the help of their technologies.”

HB Antwerp disrupts the ultra-conservative diamond industry by controlling the entire production chain. Typically, Miners, diamond processors, and retailers usually work independently. At HB Antwerp, all these activities come together. Through a deal with the Canadian mining company Lucara, HB Antwerp has exclusive access to its mine in Botswana. The rough stones excavated are analyzed in-house with MRI and CT scanners and then processed by a growing team of in-house diamond polishers. All data from those intermediate steps are stored in a blockchain, a kind of digital register. “That makes everything more transparent, and in this way, prevents conflicts of interest,” says de Toledo.

“The average consumer usually finds this data a bit boring. By using it in the metaverse, we found a way to commercialize it and make it cool.”

Showing off in a video game

HB Antwerp is now preparing for the next step. In February, Signum will be selling a new range of NFTs. This time fully linked with one of the rough stones that HB Antwerp receives from Botswana. “The aim is to create digital twins this year from all the physical stones we ingest,” Papismedov says. “We are not going to sell separate NFTs. Anyone who purchases a rough stone from Signum simultaneously becomes the owner of a digital version that can be used in the metaverse. The profits from the sale will also flow back into the communities in Botswana, where our mine operates.”

The digital strategy should help to tap into a new audience. “The customers who show interest are not the traditional buyers who pay 300,000 euros for a ring from Cartier,” Papismedov says. ‘It often concerns people who previously did not want to buy because they could not find out enough about the origin of the diamond. Thanks to the twin NFTs, we can digitally connect those end users with the producers in Botswana.”

By linking the rough stones to NFTs, de Toledo adds that buying diamonds should also become an authentic experience. “There are so many possibilities in that regard. I was thrilled to learn this week that Microsoft is acquiring gaming company Activision Blizzard and is looking to play a major role in the metaverse.”

‘If a customer wants to show off seven virtual diamonds in a video game, we can tailor them for him. In the same way as for physical diamonds, we can work with him to analyze the NFTs associated with rough stones and virtually polish them the way he wants. We want to guarantee the same quality as in the real world. Finding the right digital developers who can do this is one of our biggest challenges.”

1 billion dollar 

HB Antwerp was only founded two years ago. They hope to realize a turnover of almost 1 billion euros within three years. Customers interested only in the physical diamonds can sell the digital NFT twins themselves in a secondary market. As predicted by de Toledo, precisely because there are so many applications for digital fanciness in the metaverse, those NFTs will rise sharply in value over time. “The prices of digital stones will be as high or even higher than their physical counterparts.”

Capital increase

You cannot blame HB Antwerp, which has 107 employees, for lack of ambition. The company closed in 2021 with a turnover of just under 150 million euros and aims for 265 million for this year. Because significant luxury brands, such as Louis Vuitton, Chanel, Hermes, and Dior, are increasingly presenting themselves as jewelers, HB Antwerp hopes to push that turnover towards 1 billion within three years. But that rapid growth costs much money. “That is why we are preparing a capital increase. We are talking to potential investors in New York and hope to complete the operation within six months.”