If you’re keenly following NFT then you must know that it makes headlines every now and then for varied reasons, but usually because of high-value transactions.
A typical price for an NFT is millions of dollars, which keeps it away from the reach of the average buyer. This is a big issue considering the market is made up of a huge proportion of people that buy small. A fractionalized NFT is an innovative solution to this problem.
As such, the concept of fractionalized NFTs is accruing attention fast. It is opening new frontiers for NFTs and digital asset ownership rights. Before understanding the concept of fractionalized NFTs, it is essential to assimilate what is a non-fungible token. So, let’s do that.
What is an NFT?
NFT stands for non-fungible token. NFTs are a type of cryptographic assets that are based on blockchain technology, which is the same technology that powers Bitcoin and other cryptocurrencies.
The ownership details, including all the previous owners and selling prices, of a non-fungible token are recorded on the blockchain. This makes it an excellent means of buying and selling digital art. An NFT ensures authenticity, exclusive ownership (a single NFT can’t have two owners), and the provenance of a digital asset.
What are Fractionalized NFTs?
A fractionalized NFT, or an F-NFT, is the next step in the evolution of non-fungible tokens. It is an NFT that is broken down into several units intended to be sold individually. There are several fields where F-NFTs find use, including artwork, gaming, and the metaverse.
The biggest demonstration of fractionalized NFTs happened in 2021 with the sale of Doge meme NFT. PleasrDAO purchased the NFT for a staggering amount of $4 million and later offered fractional ownerships of the same in $DOG tokens that anyone could purchase for as low as $1.
Since then, there is no coming back for fractionalized NFTs. With time, the concept of an F-NFT is gaining more and more heat, making it one of the hottest trends in the volatile world of cryptocurrency.
Uses of F-NFTs
Many crypto games let users buy, sell, and own a wide range of in-game items. Some of them are NFTs. However, many of these items are expensive that are beyond the reach of a wide majority of gamers.
Fractionalized NFTs, nonetheless, can help players to come together and trade expensive in-game items. This can serve as a whole new dynamic in crypto gaming.
Metaverse is one of the hottest trending topics right now. Consequently, it is attracting huge investments for the development of metaverse-based projects. Many big brands are already working on building their own metaverses, such as Facebook, Roblox, and Unity.
Individuals and organizations can leverage F-NFTs to purchase virtual land or other digital assets within the virtual world of the metaverse.
3. Real Estate
NFTs have the ability to pace up the process of property purchasing by substituting intermediaries with smart contracts. There are several advantages of converting a real estate property into an NFT, such as fast ownership settlement and a simplified transaction process.
Like NFTs, fractionalized NFTs also allow the sale and purchase of real estate properties without any intermediary.
However, unlike NFTs, F-NFTs allow multiple parties to share the ownership of a property. Thus, we can predict that their use will make investing in real estate both easier and affordable for average buyers.
A fractionalized NFT is simply a non-fungible token broken into several units. The simple reason for the emergence of fractionalized NFTs is to increase the reach of NFTs and make them available to the average buyer.
Owing to the varied uses of fractionalized NFTs it is evident that they are going to continue gaining importance in digital artwork, gaming, real estate, and other market segments.
Fractionalized NFTs are still evolving and what form and shape they take will only be revealed in the future. Hopefully, it will be for the betterment of us all.
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