What is Fractional Ownership in Tokenization?
Fractional ownership in tokenization refers to the process of dividing ownership of an asset into smaller, fungible tokens on a blockchain. This allows multiple investors to hold a fraction of an asset, making it more accessible to a broader range of participants. Traditional assets such as real estate, art, or even shares of a business can be tokenized, providing liquidity and democratizing investment opportunities.
Key Benefits
- Accessibility: Investors can purchase smaller portions of high-value assets that would otherwise be out of reach.
- Liquidity: Tokenized assets can be traded on secondary markets, making it easier for investors to buy and sell their fractions.
- Transparency: Blockchain technology ensures that all transactions are recorded immutably, increasing trust among participants.
How It Works
In fractional ownership, a specific asset is evaluated and tokenized, creating digital tokens that represent a share of it. These tokens can then be sold, traded, or held by investors, who benefit from any appreciation of the asset's value. This model encourages broader participation in investment markets, enabling users to diversify their portfolios with fractional stakes in multiple assets.