What are Fractional NFTs?

What is the Fractionalization of NFTs?

The concept of fractional ownership has been around for decades, applicable to almost any asset as a form of investment strategy. Fractional ownership implies that the cost of a specific asset is divided in many fractions, that are shared among different individuals — also known as shareholders.

What Are The Perks Of Fractional NFTs?

Greater efficiency and higher Liquidity

NFTs value comes from their rarity, making them illiquid compared to other tradable digital assets. Fractionalizing NFTs into smaller divisions allow a greater number of investors to acquire assets collectively. This, in turn, makes NFT more tradable and easier to sell off quickly on marketplaces, due to the high liquidity. In other words, if you have a highly-priced NFT collection without a buyer, you may consider fractionalizing it into many parts to achieve a desired level of affordability. Not only has fractionalization made NFTs more attractive to investors, but it has also effectively resolved the liquidity issue.

Democratising ownership

Owing to the high cost of these popular NFTs, it is obvious that not everyone will be able to acquire these entirely. This keeps smaller investors and retail collectors away from entering more actively into the NFT market. Fractionalizing expensive digital assets balance the price impact, allowing the ownership of NFTs to be affordable and democratic.

Fractional NFT platforms

There is a set of interesting platforms allowing the creation and purchase of fractionalized NFTs. This list includes:

  • Unicly: Unicly is the go-to platform for investors who want to turn their NFT collection into a tradable asset with instant guaranteed liquidity. It also provides a medium for NFT tokenisation with bidding and staking features.
  • Fractional.art: On the fractional.art platform, Investors can buy, sell, and mint fractions of NFTs. It is similar to the Unicly platform, except that it does not provide bidding and a staking option.

Are Fractional NFTs Risk-Free?

Fractional NFTs are undoubtedly an applaudable way of investing in valuable rare NFTs. They are helping to transform the NFTs space into a more liquid market, making it easier for more individuals to join the investment opportunities that comes with it.

Conclusions

We will undoubtedly witness more intriguing use cases as NFTs continues to soar in growth, popularity and demand. Although fractional NFTs are still an emerging concept, there is a solid chance for these to become the next big thing in the ever-expanding NFT market. Greater liquidity is achieved by NFT fractionalization, opening up an infinite number of investing strategy options. By allowing access to a much larger pool of potential investors, F-NFTs could drive the upcoming wave of monetization of digital assets.

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