π€Divided Ownership
Possess a fractional share of an asset
Last updated
Possess a fractional share of an asset
Last updated
Divided ownership is an emerging concept that transforms the way people can own and benefit from high-value NFTs (Non-Fungible Tokens).
Unlike traditional ownership, where a single individual or entity owns an entire NFT, divided ownership allows multiple parties to collectively own a portion of the NFT and, in turn, share in the revenue generated when the NFT is eventually sold.
This innovative approach to NFT ownership opens up exciting opportunities for a broader range of individuals to participate in the NFT market, especially in cases where the NFTs have a high monetary value.
Instead of needing to have the financial resources to purchase an entire NFT outright, individuals can now pool their resources with others to collectively own a share of the NFT. This opens up access to NFT ownership and makes it more inclusive.
When the NFT is eventually sold or its value appreciates over time, the revenue generated from the sale or any associated income is distributed among the divided owners according to their respective ownership shares. This means that each owner benefits in proportion to their stake in the NFT, allowing them to potentially profit from the NFT's success without the need for full ownership.
Divided ownership has the potential to foster a sense of community and collaboration among NFT enthusiasts, as they can come together to invest in and collectively manage NFT assets.
This concept is made possible through the utilization of the ERC-1155 standard, which serves as a foundation for dividing ownership in NFTs.
The ERC-1155 standard allows NFTs, which can be represented as ERC-721, or ERC-6551 tokens, to be fragmented into smaller, more manageable portions referred to as shares. These shares essentially represent ownership stakes in the NFT.
When individuals own these shares, they gain specific privileges and entitlements related to the underlying NFT.
In the case of a platform like PhygitalX, when users purchase divided ownership NFTs, they are acquiring these ownership shares. Consequently, they become entitled to a portion of the revenue generated when the NFT associated with those shares is eventually sold or generates income.
This mechanism enables a level of fractional ownership in high-value NFTs, making it accessible to a wider range of participants. Instead of needing the financial means to acquire an entire NFT, users can now buy a share of it, which in turn grants them a proportional claim on the benefits generated by that NFT.
ERC-1155 is a versatile standard within the Ethereum ecosystem, designed for smart contracts. Unlike its predecessors, ERC-20 and ERC-721, which are used for fungible and non-fungible tokens respectively, ERC-1155 offers a more comprehensive approach.
This standard enables the creation of multiple token types within a single contract. It can represent and manage both fungible and non-fungible tokens concurrently, making it highly efficient. Unlike ERC-20 and ERC-721, ERC-1155 allows for various operations to be performed in batches, simplifying the process. You can conduct batch transfers of multiple assets, check balances for multiple assets in a single query, and grant approval for all tokens to a specific address simultaneously.
Furthermore, ERC-1155 tokens offer additional functionalities, including hooks and support for non-fungible tokens (NFTs). This versatility makes ERC-1155 a powerful choice for developers seeking to create a wide range of token types and streamline operations within their decentralized applications on the Ethereum blockchain.
High-value NFTs often experience long-term appreciation in value, primarily because of their collectible nature and inherent rarity. In the context of PhygitalX, NFTs offer an additional layer of value as they are linked to tangible real-world assets, such as collectible cards or physical items.
For example, let's consider a scenario where User A decides to sell a tokenized baseball card as an NFT on PhygitalX. When User B purchases this NFT, ownership of the actual physical baseball card is transferred to User B. Once User B claims the real-world asset, User A initiates the shipping process to deliver the card.
Now, divided ownership NFTs take this concept further by allowing other users to acquire fractional ownership stakes in the card. In this case, User C decides to purchase a 20% ownership share of the card from User A for $4,000 when the card's total value is $20,000.
Several months later, User B decides to purchase the card from User A, but this time at a higher price of $25,000. As soon as User B completes the payment, User C has the opportunity to visit PhygitalX and exchange their divided ownership NFT for their share of the revenue. In this case, User C receives 20% of the sale price, which amounts to $5,000.
This scenario demonstrates the potential benefits of divided ownership NFTs. Despite initially investing $4,000, User C realizes a return of $5,000, thanks to the increased value of the NFT. This appreciation in value highlights the attractiveness of divided ownership as a means to not only participate in the ownership of high-value assets but also potentially profit from their appreciation over time. It's a compelling example of how NFTs can enable new forms of ownership and investment in both the digital and physical worlds.
After the primary NFT is sold, the USDC funds will be secured within a Smart Contract, allowing shareholders to later claim their return.
For the example above, to redeem the $5,000 return upon the sale of the primary NFT, user C must transfer the divided ownership NFT to the smart contract address of PhygitalX. In response, the smart contract will promptly send User C an equivalent amount of USDC, which amounts to $5,000.
Divided ownership NFTs create a mutually beneficial scenario for all parties involved:
Issuer: The issuer of the divided ownership NFT receives the revenue generated directly into their wallet. However, it's important to note that this revenue is not immediately accessible. Instead, it's securely held in a smart contract until the main NFT is sold. Once the sale occurs, the revenue is automatically divided between the issuer and the shareholders, proportionate to their ownership stakes. This ensures that the issuer benefits from the sale of the NFT, aligning their interests with the success of the asset. In terms of contributed funds from shareholders, issuer will receive the contribution immediately when a shareholder makes a transaction.
Shareholders: Those who purchase divided ownership NFTs become shareholders in the asset. As with the issuer, their share of the revenue is also held in the smart contract until the main NFT is sold. When the sale takes place, the revenue is distributed among the shareholders and the issuer based on the ownership ratios. This system offers shareholders a direct stake in the NFT's performance, providing a potential return on their investment when the NFT appreciates in value or generates income.
PhygitalX: The platform facilitating these divided ownership transactions charges a modest commission of 2.5% for each transaction. This fee covers the platform's operational costs and services, ensuring the smooth and secure execution of these transactions. It's a reasonable fee in exchange for the convenience and opportunities the platform provides to both issuers and shareholders.
Yes, it is entirely possible to resell divided ownership NFTs on OpenSea, and this can be an attractive option for those looking to potentially realize a faster return on their investment.
Rather than relying on the sale of the primary NFT, shareholders have the option to list their divided ownership NFT on Opensea and recoup their investment at any time.
Using the previous example as a reference, User C can opt to list the divided ownership NFT on Opensea instead of waiting for the primary NFT to be sold. By doing so, they can quickly secure $4,500 in proceeds. Although this approach may yield a lower return compared to patiently waiting for the primary NFT to sell, User C benefits from a faster return on their investment.
When you resell a divided ownership NFT on OpenSea, you are essentially putting your ownership share up for sale to a broader market of potential buyers.
Please contact Bacoor at info@bacoor.co to mint divided ownership NFT.
