How Does Fractionalization Impact the Original NFT’s Market Value?
Fractionalization can increase the overall perceived market value of the underlying NFT by significantly increasing its liquidity and accessibility to a wider pool of investors. By lowering the barrier to entry, it can lead to a higher aggregate valuation for the ERC-20 fractions than the whole NFT's original price.
However, it also introduces complexity and potential governance disputes.
Glossar
Aggregate Valuation
Valuation ⎊ Aggregate Valuation represents the comprehensive determination of the total market worth across a diversified set of financial instruments or positions.
Fractionalization Impact
Access ⎊ Fractionalization impact fundamentally lowers the barrier to entry for retail and smaller institutional investors into high-value assets, such as tokenized real estate or expensive blue-chip stocks, which can then underpin derivatives.
NFT
Provenance ⎊ Non-Fungible Tokens, within cryptocurrency markets, represent a unique cryptographic token linked to a specific digital or physical asset, establishing verifiable ownership and authenticity.