We are proud to announce that fractionalized NFTs are coming soon on IX Swap!
Click here to find out more about IX Swap and fractionalized NFTs.
As of 29th October 2021, the global NFT market had a trading volume of around $3.6 billion and a market capitalization of $43.08 billion.
While NFTs are literally changing our lives and more people are looking to get in on them, not everyone can afford to because the bar for entry is quite high, especially with blue-chip projects.
One very big stumbling block the average investor faces when trying to get into trading NFTs is the significant capital outlay that is required to be able to purchase an NFT.
Especially one that is highly-priced — like a CryptoPunk selling for as high as 124,457.07 ETH, which is over $530 million or the Bored Ape Yacht Club (BAYC), which has a floor price of $184,041.
A solution to this steep entry barrier is fractionalized NFTs.
Fractionalized NFTs (F-NFTs) are essentially fungible tokens that are tied to non-fungible digital assets. This concept allows smaller investors to pool their resources together to purchase fractional interests of an NFT.
Fractionalization in NFT is the act of dividing the ownership of an NFT into smaller fractions. By doing so, it makes it possible for several people to own a single NFT.
Non-fungible tokens (NFTs) are units of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique. This unique asset is therefore not interchangeable.
NFTs can be in the form of digital arts, audios, videos, images and other types of digital files. While it is easy to obtain copies of these digital items, the copy of the original file is tracked on the blockchain, and this provides the owner with proof of ownership.
How Fractionalized NFTs Are Created
This is how fractionalized ownership of an NFT is created. For fungible tokens, a smart contract is deployed to generate ERC20 tokens that are linked to an indivisible ERC721 NFT.
By doing it this way, anyone who holds a piece of the ERC20 tokens generated owns a fraction of the NFT.
Benefits of Purchasing Fractions of an NFT
- Greater liquidity and trading venues to realize your gains from fractionalized NFTs
- DeFi applications to generate an additional yield from holding NFTs
- Allows for portfolio diversification through multiple fractional investments
Benefits of Fractionalized NFTs for NFT Owners
- They retain ownership while freeing up liquidity
- Increased utility for NFT piece through DeFi applications
- Positive price correlation through fractionalization
- A larger audience as more investors would have access to a singular NFT
- Building a larger community with lower floor prices for new NFT investors
Check out our deck here if you are an NFT owner who’s interested in listing your NFT and reach out to firstname.lastname@example.org.
About IX Swap
IX Swap is the “Uniswap” for STOs and TSOs, the regulatory and liquidity solution for security tokens and tokenized stocks.
IX Swap will be the FIRST platform to provide liquidity pools and automated market-making functions for the STO/TSO industry. The platform will facilitate the trading of security tokens through licensed custodians and security brokers which will provide actual ownership and claim over these real-world assets.