What Is Token Fractionalization and How Does It Affect NFTs?
Token fractionalization is the process of dividing a single, high-value NFT into multiple, smaller, fungible tokens. This allows multiple investors to own a piece of an expensive asset, lowering the barrier to entry and increasing liquidity.
For example, a rare piece of digital art can be split into 1,000 fungible tokens, making it accessible to a wider market.
Glossar
Token Fractionalization
Decomposition ⎊ Token fractionalization represents a mechanism for dividing ownership rights of an asset, typically a digital or physical one, into smaller, more accessible units.
Ownership Tokens
Derivation ⎊ Ownership Tokens represent a digitized form of equity or claim on an underlying asset, extending beyond traditional securities to encompass real-world assets and digital collectibles, facilitating fractional ownership and increased market access.
Fractionalization
Process ⎊ Fractionalization is the procedural mechanism by which a single, high-value asset, often a non-fungible token (NFT) or a large block of cryptocurrency, is mathematically divided into multiple, smaller, and typically fungible tokens.