How Can Fractional NFTs Become a Revolutionary Revelation in the Web 3.0 World? | by Gwen Stefani | Jun, 2022

Fractional NFTs

Today, non-fungible tokens (NFTs) have built a billion-dollar market after the big boom in 2021. These virtual tokens have unleashed a lot of potential, with a lot more hidden in hindsight, which could be revealed soon, according to industry experts.

We have already seen that many NFT assets such as artworks and profile picture images have been sold for thousands and millions of dollars. Such flow of cryptocurrencies towards artists and community-based businesses has been attributed to art collectors who had chosen the digital route.

Even though such amounts of money flowing in is beneficial to the NFT market, it would make the prices increase disproportionately, and soon, small-time enthusiasts might not be able to afford NFT assets. To tackle such restrictions, a new way of selling NFTs , namely fractionalized NFTs (F-NFTs), has been developed and tested conceptually. In this blog, we will discuss more about fractional NFTs and how fractional ownership of NFTs will be a revolutionary turning point for the Web3 world.

Fractional NFTs

Fractionalized NFTs (F-NFTs) are non-fungible tokens that can be divided into a number of pieces and can be traded individually. These tokens have a history of being used for artwork NFTs. Yet, there are more real-world applications that can benefit from fractionalized NFTs. Following the introduction of fractional NFTs, new platforms based on the concept of fractional NFT marketplaces have come up and have been highly successful. Fractional NFT ownership has become possible due to the advancements in smart contract development, which had been one of the impactful outcomes of the NFT boom in 2021.

Where Could One Use Fractionalized NFTs?

Fractional NFTs can be used in these sectors

πŸ‘‰ Fractional NFT ownership can be highly useful for NFT gaming platformswhere expensive in-game assets can be fractionalized and sold to a wider user base so that everyone gets a piece of the asset. Even though players cannot use such an asset for the intended purpose, they can stake it on the fractional NFT platform to earn rewards.

πŸ‘‰ Fractional NFT marketplace development has been an emerging business requirement for metaverses; such NFTs are required for making metaverse assets and plots accessible to individuals, businesses, and investors alike. Fractional NFT marketplaces can help in making fractional NFT ownership in Web3 metaverses a reality.

πŸ‘‰ The real estate sector is perhaps the most awaited application where fractional ownership of NFTs can be game-changing. Here, huge construction projects can be fractionalized as non-fungible tokens and can be put up for sale to investors looking to invest in real estate. The sector has been very slow in adapting to new changes, which is visible through the amount of paperwork and third-party involvement. If the real estate sector is looking for a drastic change, this application can catapult real estate investments to another level.

Fractionalized NFTs Work

It is a well-known fact that all NFTs use the ERC-721 standard or derived standards (Such as BEP-721) for other blockchains. The process involves forming the smart contract, which would split the ERC-721 tokens into ERC-20 tokens in the case of Ethereum being the host blockchain. The smart contract should consist of the information pertaining to how many fractions of the NFT should be created, price details, description, and other relevant details. Through the use of fractionalized NFTs, it is possible to sell an exorbitantly priced NFT asset to a wide range of buyers, which will be attractive with tier-wise utilities and rewarding mechanisms.

Advantages of Fractional Ownership of NFTs

πŸ‘‰ Fractionalized NFTs allow new NFT collections to discover prices. Fixing prices for brand-new NFT businesses has been a headache, and fractionalization makes it possible for the NFTs to gain some initial value after exploring the market demands.

πŸ‘‰ Typically, NFT assets present uniqueness to assets, which comes at the cost of liquidity. Liquidizing NFT assets can be possible by using fractionalized NFTs, as you can sell even expensive NFT assets to many people through the process.

πŸ‘‰ Fractional NFT ownership also makes it possible for the seller to get more curator incentives from the fractionalized NFT marketplace they sell the NFTs in, as more trades of the fractionalized NFT asset will be taking place.

Some Summarizing Thoughts

Hence, fractional ownership of NFTs will be another turning point in the Web3 ecosystem as more people can have access to digital assets. The goal of NFTs is to ensure that everyone gets authentic experiences in some ways, which has diverged to eliminate scams in almost every industry. Fractional NFT platforms are the businesses of the future NFT world, and the domain has already been growing at a healthy rate. If you want to venture into this sector, then a fractional NFT marketplace development firm can be the ideal option, as NFT marketplaces will not go out of trend irrespective of the crypto climate.

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