What are Fractional NFTs? | NDTV 360 gadgets

After the surge in popularity of NFTs among collectors, a new trend is the emergence of fractional NFTs (non-fungible tokens), which allow someone who owns assets on the blockchain to break ownership down into smaller ones. parts. NFTs are (to put it simply) digital assets that carry a unique fingerprint, which can be identified even if files are copied. This way, someone who owns an original digital artwork remains its owner, just like buying a physical painting. Someone else can still make prints, but the original can be recognized. With the rise in values ​​of NFTs (Earlier this week, for example, rapper Snoop Dogg revealed that he calls NFTs under a pseudonym and has over $ 17 million, or roughly Rs.125 crore) It’s no surprise that people are now looking at ways in which these purchases can be distributed among groups, for NFT projects where people believe the value will increase over time.

“It’s a bit as if the Louvre decided to split up the Mona Lisa and distribute part of it to the public. However, unlike the Louvre, collective ownership of art is really only possible by using crypto art, ”Jamis Johnson, managing director of an organization called PleasrDAO which represents the collector member of the NFT, recently said. , explaining the concept.

The concept of Fractional NFT is aimed at enabling retail art traders to benefit from experiments in the crypto space. Fractional NFTs are further believed to play an important role in democratizing crypto culture.

Any NFT can be broken down into millions or even billions of pieces, allowing many people to buy and own parts of it. Holders can then trade in their stake later for an even higher price and make a profit on their initial investment.

In June of this year, the meme behind the popular cryptocurrency Dogecoin was sold as NFT for $ 4 million (around Rs. 29.5 crore). Later in September, when the Dogecoin NFT was split into 17 billion pieces and put up for auction, its value exploded to over $ 220 million (Rupee 1,624 crore).

For NFT owners, price discovery, asset liquidity as well as investment diversification are the top three benefits if they plan to split their assets, in accordance with a report by CoinBureau.com. “The NFT split is most likely destined to disrupt not only the fine arts and games world, but potentially even decentralized finance (DeFi) and investing as a whole,” notes the CoinBureau report.

The splitting of NFTs is mainly done on Ethereum, which is the second most valued cryptocurrency in the world.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting Founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is unregulated digital currency, not legal tender and subject to market risk. The information provided in the article is not intended to be and does not constitute financial advice, business advice or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV will not be liable for any loss resulting from any investment based on a perceived recommendation, forecast or any other information contained in the article.

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