How Does Fractional Ownership of Shipping Assets Work?

Fractional ownership of shipping assets is a relatively new concept that is gaining popularity among ship owners and operators. The basic idea is that instead of owning an entire ship, a company or individual can purchase a share of a vessel. This can be a great way to get involved in the shipping industry without having to make a large financial investment, and it can also provide some flexibility in terms of how your shipping assets are used.

What is Fractional Ownership?

Fractional ownership is unrelated; parties own several percentages of an asset and enjoy ownership rights with mitigated risks.
Think of it as collaborative ownership, when a tangible asset is conceptually split into units that can be individually sold or traded, so the cost of the asset is divided between multiple parties. At the same time, each of them enjoys the benefits of ownership like usage rights, income sharing, access to the property on priority and reduced affordability.
Fractional ownership is usually used against costly assets like vacation homes, private flights and jets, cruise ships and boats.

How ShipFinex Enables Fractional Ownership of Marine Assets?

Shipfinex is a platform that enables seamless marine investments and transactions by tokenising and digitising marine assets. Shipfinex makes marine asset investment accessible to retail as well as institutional investors.
The platform allows interested parties to invest in the marine tokens and own a percentage of marine assets through fractional ownership of marine vessels, cargo ships, ships, Yachts and more.
To understand how Shipfinex makes fractional ownership of marine assets possible, we will break down its five-wing services that revolutionise maritime investments and make them truly decentralised.

Asset digitisation and tokenisation

ShipFineX’s process of digitisation and tokenisation involves converting physical marine assets into digital tokens. This is done using a blockchain-based platform to create, manage, and exchange digital tokens. Through tokenisation, the platform aims to help create a more efficient and transparent market for marine assets and provide a way to track and manage them more effectively. Additionally, tokenising these assets will open the maritime space to a larger investor pool, promoting fractional ownership of the marine asset.

Maritime asset offering platform

The platform allows potential investors to buy tokenised assets in exchange for equity. Think of this as the stage in the stock market process where initial offerings are extended to the public.
The Shipfinex platform uses smart contracts and programmable business logic to enhance its solutions and extend its offerings to investors through the KYC process.

Maritime asset exchange

On this platform, previously offered asset tokens are traded in an elastic supply-demand curve between investors by employing a matching engine that executes millions of transactions every second. The other book module presents the compatibility between the offers and orders. It allows the matching engine to execute the orders, allowing the settlement model to execute the final accounting process for the executed trades and new balances.

Maritime services marketplace

The maritime service marketplace allows various vertices of marine service providers to be matched with adequate customers like ship owners, ship management companies and charter institutions. The matching engine executes orders, and invoices are generated automatically. With the smart escrow functionality, the requester, as well as the service provider, can be assured of smooth execution of the whole process and prompt release of funds.

What ShipFinex Aims to Accomplish?

The maritime industry influences over 90% of world trade. It is, in fact, the backbone of international trade. About 80% of global trade by volume and 70% of global trade by value are transported and traded through the maritime industry.
Considering the remarkable impact that the maritime industry has on our lives, it is next to impossible to break into the maritime investment ecosystem, posing problems for interested investors and service providers within the maritime industry.
The lack of buyers and sellers in such a huge market results in low liquidity. This is because owning a ship was always considered a complex and long-time investment that required millions of dollars. Additionally, traditional ship ownership transactions are unbelievably slow with trade documentation and settlement processes.
ShipFinex introduces a more simplified process that allows easy access by not only digitising and tokenising the process but by introducing fractional ownership of marine properties to mitigate the risks mentioned above and the pain points of owning a marine asset.
The platform also extends precise solutions for the market information asymmetry and lack of transparency. For the longest time, only a tiny percentage of investors had access to the market information, rates and fluctuations, giving them an upper hand while posing a disadvantage for new investors within the ecosystem. Over time, this created a market with non-diverse investors. Here, Shipfinex has made a grand entry to fasten, smoothen and decentralise the process like never before.