Can fractional ownership increase the liquidity of NFT assets?

Fractional ownership, or splitting up a token into multiple parts, might be one solution that can potentially increase the liquidity of NFT assets. This can be done by making it easier for a larger pool of investors to own a portion of the asset. When an NFT is divided into fractional ownership shares, each share can be bought and sold separately, allowing for a more diverse range of investors to participate in the market.

Let’s understand this through an example. How fractional ownership could increase the liquidity of Bored Ape Yacht Club (BAYC) NFTs.

Bored Ape Yacht Club is a collection of 10,000 unique NFTs featuring cartoon ape characters with various attributes, such as clothing, accessories, and backgrounds. Each BAYC NFT is unique and cannot be replicated, making them a highly sought-after digital asset in the NFT market.

Currently, the market for BAYC NFTs is highly illiquid, with only a small number of transactions occurring each day due to their high price point. For example, as of the time of writing, the floor price (i.e., the lowest price for which a BAYC NFT could be bought) was almost 60 ETH, which at this time translates to over $100,000.

Fractional ownership could increase the liquidity of BAYC NFTs by allowing a larger pool of investors to own a portion of the asset. For example, imagine that an individual BAYC NFT is divided into 10,000 fractional ownership shares. Each share would represent a 0.01% ownership stake in the NFT, and investors could buy and sell these shares on a fractional ownership platform.

The barrier to entry for potential buyers would be lowered by dividing the NFT into fractional ownership shares, as they would not have to buy the full NFT at its high price point. This could increase the overall demand for BAYC NFTs, which could increase their value and liquidity. In addition, fractional ownership could also make it easier for investors to diversify their portfolios by investing in a fraction of multiple BAYC NFTs instead of investing in one full NFT.

Moreover, valuing NFTs can be tricky due to the current illiquid market and a lack of transactional data for price reference. But, fractionalization of ownership provides a solution to this issue. With fractionalization, investors get to bid on fractions of the NFT, allowing for price discovery from a wider range of sources to reach an accurate price.

Overall, while there is no guarantee that fractional ownership would increase the liquidity of BAYC NFTs, it could potentially expand the pool of potential buyers and sellers and increase demand for these highly sought-after digital assets.

About Ommniverse

Ommniverse offers innovative fractional ownership options to NFT buyers. Whether you’re a creator or collector, Ommniverse opens the door to a world of new possibilities. By reducing entry costs and increasing accessibility, Ommniverse creates opportunities for communities of all sizes to come together and share in the excitement of the NFT collection. With the world’s largest NFT marketplace at your fingertips, you can discover a vast selection of breathtaking art and collectibles that will inspire and captivate. Embrace the future of NFTs and join the Ommniverse community today! Find us on:

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