Fractional NFTs: Breaking them down to the basics

digital NFT non-fungible token concept background

Forming the road to the Metaverse, NFTs are all set to be the future of the internet. However, there is a flip side to them. They are not the most affordable. Their utility and exclusivity create digital scarcity, thereby increasing value. This allows only a certain few to buy NFTs.

Enter: fractional NFTs. These are making everything from art to cricket game NFTs much more affordable to the general population. What are they? Read on to find out.

Breaking it down

Think of it this way: Imagine a pie. This is your NFT. But for more people to be able to taste the pie, you would cut it into individual slices. This is exactly what fractionalization of an NFT is. This makes it possible for several people to share ownership of a digital asset.

NFTs are generally minted using the ERC721 token standard whereas fungible tokens are minted using the ERC20 standard. Fractional NFTs are created by deploying a smart contract to generate several ERC20 tokens that are linked to the non-fungible ERC721 token.

Art NFTs are already being fractionalized allowing people to have a slice of the cultural pie. Games and platforms like cricket NFT marketplaces, too, may utilize fractional NFTs, allowing players to collectively invest in and reap the rewards of a single NFT.

Final Thoughts

At one point in time, NFTs were seen as something inaccessible, exotic even. With the advent of fractional NFTs, this may soon not be the case. How it will revolutionize other fields remains to be seen.

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