How Fractionalized Ownership Works In NFTs

NFTs is basically a term that is given to things that are prohibited to be interchanged with other items because they have unique properties.

A non-fungible token, which is a digital token, represents the ownership of a unique item, which includes digital artworks, domain names, and expensive collectibles.

But because NFTs can be extremely expensive, Fractionalized NFTs were introduced and they are hitting the market in a huge way, considering that it allows investors to own bits of expensive unique items and still make a profit.

The thing is, there’s much more to know about NFTs and Fractionalized NFTs, and If you’re planning to step foot into the crypto world, It is important to know what these two are so you can invest in the right places.

What Are NFTs (Non-Fungible Tokens)?

Non-fungible tokens are unique cryptographic tokens that only exist on a blockchain and are not allowed to be replicated. Most of the time, NFTs represent real-world items, which includes real estate and artwork.

NFTS are also allowed to be used in order to represent individuals, property rights and many more things. Also, tokenizing real world tangible assets through NFTs can help a lot in making buying, selling, and trading more efficient while reducing the risk of getting involved in fraud.

What Are Fractionalized Non-Fungible Tokens?

A fractional non-fungible token refers to a set of fungible tokens that are tied to a whole or a set of non-fungible tokens. Like the name suggests, fractionalized non-fungible tokens, implies on proportional or fractional shared ownership of an NFT.

When a fractional non-fungible token is fractionalized, the original NFT is locked in a volt and someone then issues a small amount of fungible tokens, which then represent the ownership of that certain non-fungible token.

These fungible tokens are bought on F-NFT (Fractional Non-Fungible Token) platforms such as and could be traded on markets such as the Uniswap.

What Is The Process Of NFT Fractionalization?

Fractionalized non-fungible tokens are the latest trend and because they allow people to invest in high-valued digital artworks or other assets, people are hopping on the trend of using it.

But before you actually use this one, you need to know what the process of non-fungible fractionalization is.

Remember, a non-fungible token is just a token that follows the Ethereum ERC-721 standard and at the most basic level, and for the non-fungible token to be fractionalized, it is required to be secured in a smart contract.

After the directions that are given by the owner of a non-fungible token, the smart contract divides the ERC-721 token into a number of fractions and each one of them is represented by a different ERC-20 token.

According to the owner, the quantity of every ERC-20 token will be issued and their price, meta data and other important attributes are going to be disclosed, meaning that every fraction will be representing an ownership or a stake in the entire non-fungible token network..

Also, please do remember that a predetermined price is established for all the fractions and they are only going to be available for purchase at a specific amount of time or until they get entirely sold out.

Four Benefits Of Fractionalized NFTs

Like what we mentioned before this, fractionalized non-fungible tokens implies on proportional or fractional shared ownership of an NFT, and they bring some benefits with them, which includes:

Price Discovery

One of the best benefits that are brought by fractionalized non-fungible tokens include the fact that they can help you assess the market value of a certain non-fungible token in a very fast way. In order to sell or know the market value of a digital artwork or an NFT, all you have to do is fractionalize the NFT and sell around 10 to 20 percent of it in the market.

Solved Liquidity Issues

The thing with fractionalized NFTs is that it solves the liquidity issues that come along with NFTs. Remember, when you sell an expensive non-fungible token, you are required to wait for some time because there are few investors that are capable of affording them, but the thing with fractionalized non-fungible tokens is that they can be divided into small parts and could be sold to a wider range of buyers.

Curator Fees

The owner of the original non-fungible token that divides the non-fungible token into fractionalized NFTs are known to stand and receive a curator fee on an annual basis. Remember, the fee is set up and is updated by the NFT owner, and the cost is usually capped at a maximum price that is set by the government in order to avoid high fees.

Easy Monetization Of Assets

Artists and non-fungible token owners are easily allowed to monetize their assets through fractionalized non-fungible tokens.

Examples Of Non-Fungible Tokens

Non-fungible tokens are digitally allowed to represent assets, which include online assets such as digital artwork, real assets, and even real estate. When it comes to NFTs that are present in in-games, avatars, collectibles, and other rare items are included. Lastly, it can also be used with non-digital collectibles, domain names and even event tickets.

How Can I Purchase Non-Fungible Tokens?

Most of the non-fungible tokens are only allowed to be purchased with ether, which means that if you want to purchase some for yourself, you are required to purchase some of this cryptocurrency and store it in a digital wallet.

Most of the time, that’s the only thing that you need to do and in order to purchase NFTs via online NFT marketplaces, you can visit OpenSea, Rarible and SuperRare.

Are Non-Fungible Tokens Safe?

Generally, non-fungible tokens are safe, considering that they use the blockchain technology just like any other cryptocurrency.

Thanks to the distributed nature of blockchains, NFTs become really difficult to hack, please do note that they are not impossible to hack. Also, it is important to keep in mind that with NFTs, it is possible that you could lose access to your non-fungible token in case the platform that is hosting the NFTs gets shut down for business.

7 Unique Features Of NFTs (Non-Fungible Tokens)

Here are some of the most unique features of NFTs:

  • Non-Fungible Tokens are indivisible
  • Non-Fungible Tokens are verifiable
  • Non-Fungible Tokens can be traded
  • Non-Fungible Tokens can be purchased
  • Non-Fungible Tokens can be sold
  • Non-Fungible Tokens guarantee ownership
  • Non-Fungible Tokens are indestructible


The idea of fractional non-fungible tokens is not new, however because not everyone has the ability to invest in valuable assets, this one can become the next big thing, considering that non-fungible token fractionalization allows for higher liquidity, which means that there are an infinite number of investment options.

Please do keep in mind that fractionalized non-fungible tokens, implies on proportional or fractional shared ownership of an NFT. With this one, the original non-fungible token is locked inside a volt and the creator usually issues a small amount of fungible tokens to investors, which represent the ownership of that certain NFT.

If you are planning to purchase fractionalized non-fungible tokens, you can buy some from and could be traded on markets such as the Uniswap.

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