What Are Fractional NFTs & Their Possible Use Cases
Fractional ownership of non-fungible tokens (NFTs), a new kind of digital collectible, is starting to gain some traction. While still very much in the early stages, this concept could open up new opportunities for both creators and collectors. Fractional NFTs might even enable you to share your passion with friends or family members who don’t want to buy their own entire NFT collection but would be interested in buying a fractional share. So what are fractional NFTs? And how do they work? Read on as we explore these questions!
What Are Fractional NFTs?
A fractional NFT is a smart contract that allows you to own a part of an asset. The NFTs that are being traded on the market are limited-edition digital art, collectibles, and other unique pieces.
Traditional ownership of assets is straightforward: you either own something or don’t. If you buy an artwork for $1000 with Ethereum, it’s yours forever. You can sell it later on if you want or keep it in your digital home as decoration.
What if instead of buying an entire piece of artwork, you could own just 1%? That would make sense only if there were many people who wanted to buy those small shares in order to build out their collections. Or simply support this artist’s work financially without owning a full piece themselves. That’s exactly what fractional NFTs do!
Each share represents about 0.1% ownership for example; so even if someone owns 100 shares out of 1 million total available shares (0.1%), they still have very little influence over how much profit gets generated from selling one single item because each sale distributes profits equally among all owners (in this case 100/10 million).
Potential Uses for Fractional NFTs
There are several use cases for fractional NFTs which are beyond art or owning a digital asset:
Jobs & Services
Fractional ownership of NFTs could be a useful tool in helping people with short-term needs for jobs and services. For example, if you need a plumber to fix your leaking faucet, but don’t want to pay someone full-time wages for the job, you can use an NFT to pay for that service. Or if you need someone to clean your house once every two weeks, instead of hiring them as an employee or contractor, you could use fractional NFTs as part of their payment structure.
The same thing goes for various types of work: construction projects like:
- painting houses
- repairs such as plumbing or electrical work
- moving furniture
- transportation services such as rideshare platforms (Uber/Lyft) or delivery companies like Postmates
- even small tasks like washing clothes or babysitting
These are all good candidates for fractional ownership via blockchain technology.
Games & Augmented Reality
One of the main reasons that fractional ownership is so attractive to developers and gamers is that it allows them to turn their in-game purchases into an investment.
For example, if you buy a game like Fortnite, you can earn money from selling your skins on NFT marketplaces or other platforms. This means there will always be demand for your in-game items because people want to acquire them for their own collections or as investments or upgrade their levels.
The same can be said about AR technology: once users start creating custom experiences in AR with an item they own (like a specific character), other users will want access too. The unique experiences that are in demand can have multiple owners via Fractional NFTs.
Content Creation & Licensing
Fractional NFTs could also help artists and creators expand their audience. With fractional ownership, people who might not be able to afford a full-price ticket and can buy a small share of creation instead. This means you could have a larger pool of investors in your work, which can lead to more money for you and more exposure for your work.
This is especially important for content creators who want to license their work but don’t want it to be locked up in digital vaults forever. For example, if an author wants his or her book available through the Kindle Store or iBooks store but doesn’t want it there forever (or hasn't been able to get into those stores yet because he/she isn't famous enough), then he/she could create an NFT that represents access rights for 1 year after purchase so that every new purchaser gets access until that date passes by and only then does no one else get access anymore under this arrangement unless they buy another copy from someone online later on down the road who owns it.
Real Estate
Fractional NFTs are not just useful for music, art, and other collectibles. They could also be used to create a new type of ownership model for real estate.
This is already happening: The Polymath Real Estate Asset Platform allows people to buy a fraction of real estate assets in their area, which means you can own a piece of the building in which your office is located or even own an entire apartment building. This could have big implications for the way people invest in property going forward and could transform how we think about owning properties as well as how we look at ourselves as citizens and community members.
New Opportunities For Everyone
In conclusion, fractional ownership of NFTs is an exciting new development in the world of blockchain. It opens up new opportunities for everyday users, creators, collectors, and investors alike by allowing them to do their tasks & businesses and in ways that didn’t exist before.
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