Benefits of Fractional NFTs?
A fractional NFT is just an NFT that is divided into fractions, these are known as a F-NFT (fractional NFT). They can be bought and sold by individual investors on marketplaces such as The Piece.
So, if you wanted, you could buy a fraction of a Bored Ape NFT for a few hundred dollars and be part of a group that owns that particular NFT.
The idea is that smaller investors can gain exposure to these large and expensive collections without breaking the bank.
The Pro’s of Fractional NFTs:
1. Greater Liquidity
If you’re the one selling an NFT from a renowned collection such as CryptoPunks or Bored Ape Yacht Club, at their all time high and even still now, it can be hard to find someone willing to pay a price you’re happy with.
This is due to investors being weary and many people just simply don’t have the war chest to buy something valued so high.
In comes fractionalisation, if you sell 1000 F-NFTs of your Bored Ape for $100 each, you’ll have greater chances of profiting, as there will be fewer individuals willing to pay $100,000 than finding 1000 people willing to pay $100 each.
2. Levelling The Playing Field
For many investors, they simply do not have the funds to invest into NFTs that cost more than the average home.
And with current technology, we can do something about that, which is what fractionalisation is all about.
The even better part is that it doesn’t need to just be artwork, it can be a whole host of other assets such as real estate, boats, precious metals, you name it, you can fractionalise it.
This gives smaller investors the same opportunities to profit from big time collections like a whale would benefit.
3. Customised Equity Release
Another huge benefit is that F-NFTs allow owners of a popular NFT to customise how much equity they release. For example, if you wanted some quick cash and decided to sell half of the equity in your CryptoPunk, you could release 49% of the NFT for $100 each and still own a majority share of that Punk.