Introduction to Fractionalized NFTs

How Fractionalized NFTs Work

Fractionalized NFTs represent a groundbreaking innovation in the NFT space, allowing for the division of high-value digital assets into smaller, more affordable fractions. This democratizes access to NFTs, enabling a broader audience to participate in the market and increasing liquidity for these digital assets. Fractionalized NFTs utilize standards like ERC-741 or ERC-404 to split a single NFT into a hybrid ERC-20/ERC-721 token.

History and Development

The concept of fractionalized NFTs has evolved quickly, with notable projects like Pandora leveraging the ERC-404 standard. These early projects laid the foundation for more advanced implementations, demonstrating the potential for fractional ownership to enhance liquidity and market accessibility.

Notable Projects in Fractionalized NFTs

Pandora (ERC-404):

One of the pioneering projects in the space, Pandora introduced the concept of fractionalized ownership using the ERC-404 standard.

NFTX:

A platform that allows users to create and trade fractionalized NFT index funds, enhancing liquidity and market access for NFT collections.