- August 9, 2021
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
One of the fastest-growing sectors in the crypto space has been non-fungible tokens (NFT). The fun, market depth, and simplicity elements enable the more expansive NFT space to grow enormously.
The growth is even more indicative when you consider how everything happened merely in a relatively short time.
NFT for Decentralized Finance
Despite the fanfare, cases and applications for NFTs are for collectibles, gaming, and digital artwork.
While the market is waiting to see the next breakthrough in this space, enabling NFT to represent real-world asset ownership in a fractionalized manner could be the upcoming big thing. Not just for the total NFT market development but could also pave the way for the DeFi world.
Anyone with a secure wallet will be capable of trading shares of exotic private-sale tokens or private investment in the shape of fractionalized NFT. This development could be disruptive, and there is one protocol established to make all this possible.
What are Fractionalized NFTs?
Fractionalized NFTs (F-NFTs) is a new decentralized project that will allow NFT owners to mint tokenized fractional ownership of their items, expediting the purchasing and trading of sections of the whole NFT.
Additionally, fractionalizing allows the NFT holder to obtain liquidity from their asset without exchanging the whole token.
The Advantages of F-NFTs
How will F-NFTs benefit people who hold assets? Let us find out.
Easier Investments
The platform will allow users to fractionalize complete collections of NFTs and deliver them beneath one distributed ownership token enabling those with insufficient understanding of the space to invest in digital art gathered by more notable collectors.
Compatibility with Vaults
The Fractional project operates with NFT vaults, which command the entire article and let the holder split it into portions as they see appropriate. They can then transfer the fungible ERC-20 tokens to friends, sell them off, or utilize them for liquidity reserve.
When an enthusiastic party appears, they can transfer ETH equivalent or more prominent to the stock price of the asset launching a sale. Upon conclusion, the auction winner will get the NFT, and token holders will be capable of petitioning for the ETH spent.
Decentralized Autonomous Organization Finance (DAOfi)
DAOfi is another project that has propelled a decentralized exchange forked from Uniswap to exchange fractionalized NFTs. Its creation is to resolve the liquidity dilemma in secondary markets for NFTs. With DAOfi, NFT owners have to wait for someone to buy or bid at an asking rate for a particular item.
Breaking the non-fungible ERC-721 tokens into fungible ERC-20 tokens enables buyers to have a piece, much like having a reproduction of an artwork. The fungible tokens will be arranged on a bonding curve on DAOfi so that liquidity can be provided algorithmically for consumers and merchants at any time.
The Future of F-NFTs on Horizon Protocol
Horizon Protocol is exploring the capacity to fractionalize NFTs by either having someone lock the original NFT or by creating a synthetic version of the NFT that is then fractionalized and backed by our debt pool.
By locking the original NFT or the synthetic creation of an NFT and thereby fractionalizing it – Horizon Protocol can provide liquidity and a better price gauge for NFTs that are instead sold and bought rarely and in wholes etc. paintings sold once every few years at a subjective price can be fractionalized and parts of the painting could be traded, just like any other asset. This increases the liquidity and provides a more concurrent and active price for the owner/s of the original NFT.
Horizon Protocol is also investigating the idea of adding new layers of DeFi functions to NFTs such as staking, lending, and shorting.
Conclusion
Horizon Protocol’s system facilitates a secure and safe platform for synthetic assets representing the real-world economy. The infrastructure allows for a host of innovative asset classes to be tradeable. Fractionalized NFTs is an expansion upon Horizon Protocol’s base of synthetic asset frameworks (crypto and real-world economy) providing users and NFT owners a unique method to discover liquidity and more accurate valuations.
You can learn more about Horizon Protocol on Twitter and Telegram here.
