What Are Fractionalised NFTs?

With fractionalised NFTs, pieces of expensive and unique artworks can be owned and be taken advantage of by multiple people at the same time.

By Radhika Parashar | Updated: 26 September 2021 18:40 IST

Fractionalised NFTs can democratise access to this new art trend

Highlights

Fractionalising NFTs is picking up pace as a crypto trend
Meme-based cryptocurrency Dogecoin was fractionalised as an NFT recently
The process simply means breaking down the ownership of an NFT into parts

After the skyrocketing popularity of NFTs among collectors, a new trend is the emergence of fractionalised NFTs (non-fungible tokens), that allow someone who owns assets on the blockchain to break down the ownership into smaller pieces. NFTs are (to oversimplify) digital assets that carry a unique fingerprint, that can be identified even if the files are copied. This way, someone who owns an original piece of digital art remains its owner, just like if you bought a physical painting. Someone else can always make prints, but the original can be recognised. With the values of NFTs going up (earlier this week, for example, rapper Snoop Dogg revealed that he's been calling NFTs under a pseudonym, and has over $17 million or roughly Rs. 125 crore worth) it's no surprise that people are now looking at ways in which these purchases can be divided among groups, for NFT projects where people believe the value will go up over time.

“It is very much as if the Louvre decided to fractionalise the Mona Lisa and distribute a portion of it for the public to own. However, unlike at the Louvre, collective ownership of art is really only possible using crypto art,” Jamis Johnson, chief pleasing officer of an organisation called PleasrDAO that represent member NFT collector had recently said, explaining the concept.

The concept of fractionalised NFTs is aimed at allowing retail traders of art works to reap advantages of experimenting in the crypto space. Fractional NFTs are further believed to have an important part in democratising the crypto culture.

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Any NFT can be divided into millions or even billion of pieces, letting that many people buy and own parts of it. The holders can later trade their stake later for an even higher price and make profits on their initial investment.

In June this year, the meme behind the popular cryptocurrency Dogecoin was sold as an NFT for $4 million (roughly Rs. 29.5 crores). Later in September, when the Dogecoin NFT was fractionalised into 17 billion parts, and put up for auction, its value exploded to over $220 million (Rs. 1624 crores).

doge meme NFT shows nobody can funge harder than dogecoin fans - splitting NFT ownership into 17 billion individually tradable pieces.

you can't spell 'allegedly non-fungible' without 'fun'https://t.co/7lYQ7l2zFS
— Gordon Mohr ꧁????????꧂ (@gojomo) September 9, 2021

For NFT owners, price discovery, asset liquidity as well as diversifying investment are the three major benefits if they are considering fractionalising their assets, as per a report by CoinBureau.com. “NFT fractionalisation is most likely destined to disrupt not only the world of fine art and gaming, but potentially even that of Decentralised Finance (DeFi) and investing as a whole,” the CoinBureau report noted.

Fractionalisation of NFTs is majorly done on Ethereum – which is world's second most valued cryptocurrency.

Original Doge Meme Sold for $4 Million. Buy a Piece of It for $1

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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Further reading: Cryptocurrency, Dogecoin, Non-Fungible Tokens, NFTs, Fractionalised NFTS, F-NFTs, Mona Lisa, Snoop Dogg, Louvre

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More