NFT Fractionalization

#web3-eli5

As individual NFTs inside certain collections have soared in value, the cost of owning one has put them out of reach for average collectors. To allow more people to participate in a community, some collectors have fractionalized their NFTs.

To accomplish this, they created smart contracts that lock up the original token and divide it’s ownership into a new collection of NFTs. Each NFT in this new collection then represents a small fraction of ownership.

This lets fractional buyers profit from increases in value, or to feel like they’re a part of the project. In some cases, owning a fractionalized NFT even allows access to some of the perks that come with holding the original.

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