Over the past few years, the market for non-fungible tokens (NFT’s) has grown exponentially. Purchases of these digital collectibles can range anywhere from a few measly dollars to multi-millions. With more and more major players and organizations entering the space of decentralized finance (DeFi), the NFT market is only expected to grow even more. Recently, Visa, the multinational financial services corporation, made history with their 49.5Ξ ($160,000) purchase of CryptoPunk #7610, a pixelated digital collectible that is part of the CryptoPunk collection.
As of the time of writing, the CryptoPunk collection has traded over 360,182Ξ or $1,202,384,765.14 with the lowest priced CryptoPunk for sale at 73.97Ξ ($246,998.65 USD). While these are all unbelievable amounts of money for the average consumer to spend on NFT’s, there is a way for retail investors to own a piece of collectibles from major collections.
Enter CryptoPunk #2066.
Purchased with 1144Ξ or $3,802,339.27, CryptoPunk #2066 may not be the most expensive CryptoPunk, but it may become one of the most important. This digital collectible was not bought by a singular individual but rather by a number of people, each bidding for a fraction of the NFT, and, in turn, each owning that fraction of this zombie avatar. After the bidding is over, the NFT is then sent to fractional.art, an online marketplace built for fractionalized NFT’s.
How is this fraction represented? With each purchase, the buyers are given Party Of The Living Dead (DEAD) tokens built on the Ethereum blockchain equivalent to the portion of the NFT that they own. These tokens can then be bought or sold at their discretion on token exchanges like Uniswap.
While the idea of fractionalized art and securities is not new, this development in DeFi will open the market up to many people due to its increased accessibility. The introduction of fractionalized NFT’s allows more and more individuals to be exposed to collectibles that they would have never been exposed to. Average consumers are now able to purchase parts of an NFT regardless of its price and are able to sell their tokens for a profit or just hold them for ownership. However, due to the novelty of both NFT ownership as well as DeFi in general, there are some concerns that have been raised.
Normally, NFT’s skyrocket in value due to the fact that an individual is able to own the whole collectible themselves. With fractionalization, issues surrounding ownership begin to arise. Even if someone had 99% of the NFT tokens, they still don’t have full ownership. Without full ownership, holders won’t have access to perks that full owners of some of these collections have such as community groups, future airdrops, etc.
These shortcomings will, without a doubt, be solved in the near future. Details and specifics of fractionalized NFT’s will be ironed out as both DeFi and these digital collectibles become more and more mainstream. Anyone will be able to have their own piece of multi-million dollar digital collectables.
Links below for help if you are interested in fractionalized NFT’s:
Fractional.art- Fractional NFT Marketplace
partybid.app- Group bids on an NFT to determine ownership proportions