Non-fungible tokens (NFTs) are now popular around the world, establishing a new model of digital asset ownership. From digital art to virtual real estate, NFTs have found numerous application scenarios. And now, we are witnessing a new variant: Fractional NFTs. What exactly are these divisible NFTs? How are they different from standard NFTs?

Similar to cryptocurrencies such as Bitcoin and Ethereum, NFTs are unique digital assets verified through blockchain technology. Unlike other cryptocurrencies, each NFT is unique and non-fungible and has its own specific source of value. It is this non-fungible characteristic and traceability that makes NFT particularly suitable for representing the ownership of unique items, such as artworks, collectibles, etc.

Why should digital assets be made “non-fungible”? What other characteristics does NFT have? Please refer to the entry: What is an NFT

As the name suggests, a divisible NFT can be split into smaller, divisible parts. This means that a unique NFT is no longer owned solely by one person, butco-owned by multiple people, each of whom owns a piece of it, just like shareholdersin a company. Each divisible part represents a portion of the entire NFT, with a corresponding share of the original asset value and ownership.

For example, a piece of digital art represented in the form of an NFT is generally purchased and owned outright by one person. However, with divisible NFTs, the artwork can be divided into 1,000 parts, and these parts can be sold to different people, allowing those people to all own a piece of the digital artwork. These owners can trade and hold their shares when investing in the target, and they can even aggregate their shares to make collective decisions on NFT-related matters.

The emergence of divisible NFTs is a major development in the world of digital assets. Through shared ownership, individual investors can more easily trade high-priced NFTs. Furthermore, they open up new possibilities for community participation and collective governance in the digital asset space.

At the same time, divisible NFTs also bring new challenges. Legal issues surrounding shared ownership, the impact of divisibility on the value of individual NFTs, the complexities of managing divisible assets, and more are all areas that require careful study and regulation.

All in all, divisible NFTs are an exciting development in the world of digital asset ownership. Divisible NFTs greatly expand the potential of NFTs by enabling shared ownership and opening up new avenues for community engagement. As with any new technology, its development will be accompanied by a struggle between innovation, regulation and market.