What are Fractional NFTs?
Fractional NFTs (Non-Fungible Tokens) are a method of breaking down ownership of unique digital assets into smaller, tradable portions. This innovation allows multiple investors to own a fraction of a high-value NFT, making it more accessible and enabling shared ownership.
Traditional NFTs represent ownership of a single item or a unique asset, often linked to digital art, collectibles, or other non-fungible items. However, due to the high prices of some NFTs, many potential buyers cannot afford these assets outright. Fractional NFTs address this issue by enabling owners to tokenize their NFTs and sell fractions to interested parties.
The process typically employs smart contracts on a blockchain platform, which ensures transparency, security, and ease of trade. Through this method, each fraction is represented as a token on the blockchain, allowing for peer-to-peer transactions.
As a result, fractional NFTs create new investment opportunities and democratize the ownership of valuable digital assets, paving the way for innovative financial ecosystems in the NFT space.