What Are Fractional NFTs?
To understand fractional NFTs, one must first understand NFTs. An NFT—or nonfungible token—is simply a digital token that represents ownership of a digital asset. The digital token—typically backed by the Ethereum network—corresponds to a specific digital collectible, art, sports “memorabilia,” or other unique digital item. There can only be one owner of an NFT at a time and each NFT is distinctive in that no two are the same.
Fractional NFTs—or F-NFTs—allow the owner of an NFT to break it down into parts on the backend by creating tokenized fractions of the original NFT in order to share ownership of it with others. For a small price, people can own a piece of expensive NFT that they otherwise would be unable to afford.
What Are The Benefits Of Fractional NFTs?
There are several benefits to fractional NFTs and fractional NFT ownership, the most notable being that they’ve allowed more people to enter the NFT game who otherwise wouldn’t have been able to participate. Other benefits of factional NFTs include:
- The ability to assess market value of your NFT: Creating and selling a fraction of your NFT will help you see what the market truly thinks of your NFT.
- Quick monetization: Fractionalizing your NFT allows you to quickly bring in some dough through the fractionalized sales.
- Liquidation: Like with the ability to use a franctionalized NFT approach to bring in money, fractional NFTs can be an easy way to offload your NFT sooner, rather than waiting around for someone who can afford it to take an interest.
- Annual fee: By fractionalizing an NFT as the original NFT owner, you’ll receive an annual curator fee, which is just extra easy money in your pocket.
Where Can You Purchase Fractional NFTs?
To date, some of the most popular fractional NFTs are housed in the arenas of sports collectibles, artwork, and gaming. Music and real estate are also popular NFT sectors that are beginning to see the influence of fractional NFTs, and because the landscape is still so new, there’s a strong opportunity for other sectors to emerge, particularly those that aren’t even on the map yet. The following are a few of the most popular markets that currently offer up fractional NFTS:
- CryptoPunks: One of the most popular NFTs, CryptoPunks recently fractionalized 50 of their digital assets into fractionalized tokens to help more people own a piece.
- Domain names: The value of domain names for web addresses ending in .crypto and .eth have skyrocketed and you can now own a piece of some the rarest and most sought after since they’ve now been fractionalized.
- Real estate: Like all fractional NFTs, the real estate market is now being impacted by allowing multiple people to purchase fractionalized NFTs to a single property, which could have lasting implications on the future of NFTs in general.
Fractional NFTs And The Future
The future for fractional NFTs looks just as bright—if not brighter—than the future of NFTs, so it should come as no surprise if the NFT and fractional NFT boom continues. Seemingly each day, new and different properties are becoming NFTs, and from there, ownership of those digital assets also appears to be everchanging, growing and expanding.
Like the start of the Internet, NFTs and fractional NFTs aren’t without speculation and naysayers, however, like the Internet, cryptocurrencies, NFTs and fractional NFTs seem well positioned to be the future of finance and digital collectibles.
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