Apparently There Are Fractionalized NFTs
I wrote a piece about NFTs and in that piece I said something like, NFTs are unique and can not be fractionalized, but it felt weird because, this is crypto, almost anything is possible. Turns out I was wrong as I did some research and found out that NFTs can truly be fractionalized. There was a man, whose name I have forgotten, sometimes in July or august, bought a Doge NFT, fractionalized and tokenized it. I think I read that piece, and I felt, “wow!!! Things keep changing in this crypto space and world”.
It’s great though, seeing how exorbitantly high these NFTs are getting, I don’t mind owning a fraction , it’s a way of also being part of something great when you can’t afford the whole. Right now with fractionalization, it’s possible for multiple people to own parts of an NFT. This is something am not sure is possible with a physical art. Once again, you never can tell, but imagine the Mona Lisa painting being fractionalized.
Just like the man who bought the doge NFT, fractionalized it by tokenizing it, it’s very possible to own parts of an NFT. The way it’s done is that the a smart contract is deployed to enable an ERC20 token to be linked to an NFT which is invincible and has a smart contract attached to the ERC721. The ERC721 becomes the invisible NFT linked to the ERC20 token, this way anyone that possesses the ERC20 token attached to the ERC721 can have a share in the portion of the NFT being fractionalized. This ERC20 are unique and differentiates them from other ERC20 proving that they are different parts of the whole NFT.
Let’s be honest with ourselves, not all NFTs minted will have value, some will have a big hype and value backed by a community, while some will never catch the interest of anyone. So how do we make sure we invest in the most profitable NFT? This is where fractionalized NFTs come in place, it reduces the unnecessary rampant creation and minting of too much NFTs, because right now, the hype of NFTs are dying slowly compared to 5 months back. In April an NFT you bought few days ago must have gone up 12,000%, but right now there are lots of options right there. Only few NFTs have managed to retain their value because of the community and the prestige they posses. So instead of people buying lots of unnecessary NFTs all over the internet, they can just focus on fractions of a valued NFT, there by maintaining liquidity in the NFT space. This way smaller investors can invest and feel good and proud to say that they own a fraction of a popular valued NFT.
We are going to use the doge NFT for example, it was bought for $35,000 about 12 ETH or 13, can’t remember but when fractionalized, the value of the NFT went up to $80 million. This is because it gave lots of people the opportunity to buy as little as they can afford.
How Do You Buy A Fractionalized NFT
Well it’s pretty easy, for now I only know that of ETH. With the Fractional website you can get some NFT fractions. All you have to do is connect your wallet to that of fractional and search for NFTs you would like to buy their fractions and get some.
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