What are fractional NFTs? | Headlines | News | CoinMarketCap
09/28/2023 18:39
Fractional NFTs enable the division of a single, unique NFT into numerous, interchangeable units. These units, or fractions, are represented by …
Fractional NFTs enable the division of a single, unique NFT into numerous, interchangeable units.
These units, or fractions, are represented by ERC-20 tokens, each of which signifies a stake in the original NFT. This process, known as fractionalization, is facilitated by smart contracts and essentially provides a digital "IOU" to the holder, stating their ownership of a certain percentage of the original NFT. Fractional NFTs can be sold or traded on various marketplaces, providing an exciting new avenue for investors.
However, it's important to note that NFTs themselves cannot be divided. The concept of fractionalization essentially bypasses this limitation by creating multiple fungible tokens that represent a share in the original, indivisible NFT. This process enhances the …