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What Is a “Governance Token” in a Fractionalized NFT Vault?

The resulting ERC-20 tokens that grant holders voting rights on the original NFT's management, such as setting the sale reserve price.
Greeks.Live16.11.25

What Is a “Governance Token” in a Fractionalized NFT Vault?

When an NFT is fractionalized, the resulting fungible ERC-20 tokens often serve as governance tokens for the vault that holds the original NFT. Holders of these tokens can vote on key decisions regarding the NFT, such as setting the reserve price for a potential sale or deciding on its future utility.

This structure aligns the incentives of the fractional owners.

What Is the Role of ‘Governance Tokens’ in the Evolution and Parameter Setting of an AMM Protocol?
How Does a Governance Token Grant Power within a DAO?
How Does the Sale of ‘Fractionalized’ NFTs Complicate Their Classification?
How Does Fractionalization Affect the Governance Rights Associated with the Underlying NFT?

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