Are you familiar with the context of sharing? Would you rather bear all the risk? What if the profits turn out to be so massive; would be comfortable to share? However, considering the recent trends surrounding the Crypto space; what if it were possible to minimize the risk while still making as many profits as possible? Well, here comes the role of IX Swap and their Fractionalized NFTs policy. This article is concerned with Ix Swap, its role in the fractionalization of NFTs, as well as the financial security it offers.
NFTs is an abbreviation for Non-Fungible Tokens. This portrays their inability to be interchanged or swapped for something of the similar or same worth, unlike cryptocurrencies.
Fractionalised NFTs (abbreviated as F-NFTs) can be considered a recent adoption in the NFT space. As the word implies, "fractionalization" simply means to break into parts or sections. So, Fractionalised NFTs explains the possibilities of dividing digital assets or NFTs into fractions which can be owned by various owners. Before now, fractionalization of assets (of any kind) was only common amongst other forms of assets but digital assets, like the traditional finances which included physical and visible properties like real estates, luxurious cars, non-digital artworks, aircraft, and the rest. The possibility of fractionalization reduces the cost of investment as well as the risk.
So, the major difference between NFTs and F-NFTs lies in their ownership. While NFT can only be owned by an individual or a body, F-NFTs, on the other hand, can be owned by multiple individuals or bodies.
So, why fractionalise?
Fractionalization permits more Investors for a particular project or asset. This implies that, because pricey NFTs may be exchanged in tiny amounts, fractionalization adds liquidity to a typically illiquid market. NFT holders can sell a portion of their NFT for cryptocurrency while keeping the majority. Fractional NFTs allow investors to have exposure to an asset without having to purchase the entire asset.
So, why Fractoinalise on IxSwap and How?
With the rising surge in the NFTs space, there is expected to be a great deal of widespread participation and use cases. This will increase competition and thus, a corresponding hijack in the affordability of these items, as already seen in the cases of BAYC, Crypto Punks and the rest, which sold for a whopping hundred of thousands of dollars, and even millions. Considering the facts that NFTs are literally changing lives and that many other users would as well wish to be partakers, individual affordability of these assets are only possible to a few, considered "whales". IxSwap, coupled with so many other compelling features, promises to be the haven for fractionalization of NFTs, thus creating equal opportunities for investors from various economic classes.
Fractionalization of NFTs entails the creation of fungible tokens, such as ERC-20 tokens related to underlying NFTs on the Ethereum blockchain (ERC-721 tokens). The Tokens are locked in a smart contract, which is then split into multiple fractions in the form of ERC-20 tokens by the owner. The owner then specifies the number of tokens to be produced, as well as their price, metadata, and other characteristics. Each fraction, or ERC-20 token, represents a portion of the NFT's ownership. The fractions are then sold at a given price for a specified amount of time, or until they're all gone.
So, how does fractionalization benefit the owners, and why is it necessary?
Fractionalization offers the owners the opportunity to be a part-owner of a whole and expensive NFT, thus standing a chance of making lots of profits. Other reasons for the need for fractionalization include;
More liquidity,
Democratisation, and
Price discovery.
Additionally, just like crypto projects with proof of stake, some F-NFT projects make provision for staking, which enables holders to earn a quality amount of passive income in addition to voting rights in a DAO environment.
The concept of F-NFTs is still in its budding stage, though perceptions and trends show it might grow to be the next big thing in the crypto space. With its adoption by IxSwap, users stand to enjoy great liquidity and seamless investment opportunities.
