Democratizing and Liquifying NFTs: Welcome to Fractional NFTs on Gate.io
NFT collections like Bored Apes or CryptoPunks have become the pinnacle of many NFT enthusiasts’ collections. However, for most collectors and traders, the high prices and low liquidity often leave them unattainable.
So, how do you lower the barrier to entry for blue chip NFT collecting and trading? Look no further than fractional NFTs, which take traditional NFTs and break down ownership into fractions. These fractions can be individually bought and traded and can even grant community governance privileges. Essentially, you can own a portion of an NFT by holding one or more fractions.
Fractional NFTs: Why and How?
The fractionalization of NFTs is made possible by tokenization, where the original NFT is locked in a vault, and tokens representing each ownership fraction are issued to buyers. With the ability to trade each fraction individually, NFTs can indirectly become a highly liquid asset, opening an alternative market.
Take The Doge NFT, for example; its valuation went from $4 million to over $225 million after fractionalization. This was due to its corresponding token skyrocketing in value. Although, do consider that the prices of each fraction will fluctuate much like any other crypto asset.
Overall, fractionalization widely increases the benefits and uses for NFTs, enhancing trading opportunities. Furthermore, it enables the purchase of NFTs without buying them outright and allows just about anybody to join exclusive NFT communities.
Beyond just trading, fractional NFTs open up subcommunities and governance within individual NFT assets. Ownership grants personal avatar use and the ability to vote on commercial rights or outright sales, with profits proportionally distributed back to all owners. With fractional ownership, the governance possibilities are endless.
Where to find Fractional NFTs
Fractional NFTs have been particularly popular on Gate.io, with the first two fractional NFT crowdfunding rounds featuring MAYC (Mutant Ape Yacht Club) selling out within a week.
The third round, featuring the Azuki collection for 14 USDT per fraction, is open now and will finish on August 7th at 13:00 (UTC) and has nearly sold out. The fourth round is also open, featuring an NFT from the famous MAYC collection for 29 USDT per fraction. This round will end on August 21st at 13:00 (UTC). Both rounds offer 1000 ownership fractions, or “shards,” with a max of 5 per user.
Hosted on Gate NFT, Gate.io’s NFT marketplace and creation platform, each round begins with a subscription period. When the subscription threshold is met, Gate.io purchases the NFT and distributes it as fractions to the subscribers.
These past rounds were just initial pilots, and with the apparent success of fractional NFTs on Gate.io, you can expect the variety and frequency of crowdfunding rounds to increase. Also, unique to Gate NFT, every fractional owner can access avatar privileges and vote on governance decisions such as outright sales or commercial authorization. Lastly, owners will be able to access all the governance features on a new page soon to launch on the Gate NFT website.
With these features, Gate.io is building subcommunities with exclusive Discord channels, where members can socialize, interact, and enjoy collective ownership. Furthermore, the platform is exploring more ways to enhance the benefits of NFT ownership and empower the communities around them. Ultimately, Gate.io’s fractional NFTs may be your ticket to obtaining a high-quality and highly valuable NFT.