It is known that one of the main characteristics of NFTs is the guarantee of their exclusive ownership: a NFT cannot be reproduced or falsified; it is essentially a one-of-a-kind token. However, this exclusivity severely limits what NFT holders can do with their assets. This has led innovators in the space to push the boundaries of what is possible for NFTs, including fractional ownership possibilities. So now is the time to better understand the breakdown of NFTs!
Split NFT: what is it?
It’s an entire NFT split into smaller pieces, so multiple people can claim partial ownership of the same NFT. You can think of it as an entire cake that you’ve cut out to serve multiple people.
Since an NFT is unique and cannot be duplicated, split NFTs push the boundaries by allowing for the division of their ownership. However, unlike a pie, it is possible to reverse the splitting process and turn a split NFT into a full NFT. Typically, the smart contract that splits an NFT has a buy-back option that allows the holder of a split NFT to purchase all of the fractions to unlock the original NFT.
The holder of a split NFT can initiate the redemption option by transferring a specific number of ERC-20 tokens corresponding to the smart contract. This will start a kind of buying auction, which will last for a certain amount of time. Other split NFT holders are then given time to make up their minds. If the redemption is successful, the fractions are automatically put back into the smart contract and the acquirer gets full ownership of the NFT.
This kind of practice can help you easily acquire Girles Tokens in the future.
What are the benefits of split NFTs?
The first benefit of this type of practice is democratization. Indeed, the increasingly high prices of some of the trendiest NFTs are unaffordable for many, preventing small investors or collectors from participating in the NFT space. Splitting an expensive NFT cuts costs and makes it accessible to more people. Similarly, with the growing popularity of NFTs, popular collections tend to rise substantially in price. This makes some NFTs accessible to only a few wealthy investors. With fractional NFTs, you can divide ownership of NFTs into multiple shares, making them more cost-effective.
Also note that it can be difficult to accurately determine the right price for a more expensive NFT with very little or no transaction history. Additionally, splitting the NFT makes it more accessible and allows more people to trade this asset, making it easier for buyers to find the true value of the NFT. By the way, through the split, digital creators can enjoy even greater visibility online, as they can reach a wider audience in a more liquid marketplace. So, in many ways, split customizable NFT cards are a great idea.
Yes, this practice will take its toll as split NFT holders may own a larger and more expensive percentage of an entire NFT. Depending on the NFT and the platform on which the split NFT was purchased, the holder may receive exclusive access to the NFT community and other benefits such as voting rights.
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