Oxalus Insights Guides

Fractional NFTs (F-NFT) Explained & How Do They Work?

Guides Feb 10 2023

NFT is a one-of-a-kind digital asset developed on blockchain. The unique features of NFTs increase their value thereby making them more sought after by investors. However, the high prices of some NFTs pose a barrier for individual investors who do not have the financial resources to access popular collections.

Therefore, the concept of fractional NFT (F-NFT) began to appear. Fractional NFTs are a great solution for small and medium investors, as they give them the opportunity to own a piece of the NFT. It is similar to owning shares in a company.

What Are Fractional NFTs?

A fractional NFT (F-NFT) is an NFT that has been divided up into smaller pieces, which enables many persons to claim ownership of various pieces of the same NFT. To fractionalize NFTs, a  smart contract will be set up to generate a certain number of tokens connected to the original indivisible NFT.

These fractional tokens reflect a proportion of each NFT holder’s ownership. In addition, the exchanges that support NFT allow for the trading or exchange of this type of NFT. These NFTs also offer a potential use case for investors who intend to own more valuable goods when they are applied to real-world assets. The most popular example of F-NFT is probably artist Pak’s The Merge, which is also the world’s most expensive NFT with a total value of over $91 million.

How Do Fractional NFTs Work?

Currently, most NFTs operate on the Ethereum blockchain and use the ERC-721 standard. The first step in fractionalizing an NFT is to put it in a smart contract, which is a blockchain script that is programmed to generate a certain outcome when certain standards are met. The smart contract specifies the total amount of ERC-20 to be created, as well as their base price, characteristics, metadata, and other distinctive features.

Fractional NFTs allow for ownership of a single NFT to be divided and sold to multiple individuals. This is accomplished by dividing the NFT into smaller units, each representing a fraction of ownership of the original NFT. The ownership rights, such as the ability to trade, transfer, or display the NFT, are also divided among the owners proportionally. The ownership of fractional NFTs is recorded on the blockchain, enabling a secure and transparent transfer of ownership. This allows for a wider audience to own a piece of unique digital content and potentially opens up new investment opportunities in the NFT market.

What Mechanism Related To Price

Because the NFT is broken into smaller pieces, the price of each part is also cheaper, of course. As a result, investors or enthusiasts only have to pay less money to own a part of the ownership of that NFT. For example, if a $1,000 NFT is divided into 100 pieces, you only need to pay $10 for each piece. The more pieces of NFT you own, the more your ownership of that NFT increases accordingly.

The Benefits of Fractional NFTs

One of the most significant characteristics of F-NFTs is that they allow investors to own a share of a bigger and more expensive NFT. F-NFTs are a better choice for investments, and in some cases, owners may be granted governance rights on the NFT platform. In addition, it helps people who want to get acquainted with NFT to participate actively in the booming NFT market.

Increased Accessibility

Fractional NFTs allow for small proportion ownership and make NFT investments more accessible to a wider range of investors.


Fractional NFTs provide greater liquidity as smaller pieces of an NFT can be bought and sold easily.


Fractional NFTs enable investors to diversify their portfolios by investing in a range of NFTs without having to purchase full units.


Fractional NFTs make NFTs more affordable for individuals, as ownership can be split into smaller, more manageable parts.

Potential for Higher Returns

Fractional NFTs have the potential to offer higher returns, as the underlying asset (the NFT) may appreciate in value.

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Use Cases of Fractional NFTs

So now that we have a better understanding of the benefits of fractional NFT, how can fractional NFT be used most effectively? Of course, fractional NFT applies to most of today’s NFTs, we have selected a few areas that will work best with them.

Art Collecting

Fractional NFTs can be used to allow multiple individuals to own a piece of rare or valuable art.

Real Estate Investment

Fractional NFTs can be used to allow for fractional ownership of real estate assets, making it more accessible for smaller investors.

Digital Collectibles

Fractional NFTs can be used for collectible items in the gaming or sports industries, allowing for a more democratic and accessible investment opportunity.

Music Royalties

Fractional NFTs can be used to represent ownership of a fraction of future music royalties, making it possible for fans to invest in their favorite artists.

Crypto Assets

Fractional NFTs can be used to represent fractional ownership of crypto assets, allowing investors to diversify their portfolios with smaller investments.

Where To Buy Fractional NFTs?

Just like traditional NFT, you can find fractional NFT in most NFT marketplaces. Here are some of the most popular marketplaces for F-NFT


OpenSea is one of the largest NFT marketplaces and supports fractional NFTs.


Rarible is a decentralized NFT marketplace that allows for the creation and sale of fractional NFTs.


SuperRare is a high-end NFT marketplace that has recently started supporting fractional NFTs.


Unicly is a protocol for fractionalizing, combining, and trading NFTs. Any ERC-standard Ethereum NFT can be fractionalized there.


You may purchase, trade, mint, and fractionalize your non-fungible tokens with Fractional.art as well. It also works with Ethereum NFTs that adhere to the ERC standard.


The trusted centralized exchange KuCoin allows you to access Fractionalized NFTs from top collections, such as Mutant Apes.

The Popularity of NFTs and Barriers to Access

NFTs have gained significant popularity in recent years due to their unique characteristics and investment potential. NFTs offer a new way for artists, musicians, gamers, and other creators to monetize their digital assets. However, there are still barriers to accessing NFTs, including a lack of understanding and awareness, technical hurdles, and high entry costs. For many individuals, the process of buying, selling, and storing NFTs can be complex and intimidating. Additionally, the price of individual NFTs can be prohibitively high, making it difficult for smaller investors to participate.

Fractional NFT is a new solution that solves all the problems that still exist in this market. On the other hand, further education and the development of user-friendly platforms and tools are also needed to increase the overall accessibility of NFTs. Although it is too early to say whether F-NFT is the future of the NFT industry, it has contributed to bringing the concept of NFT to more people. We believe that this technology will be further improved and applied in more areas of life.

Frequently Asked Questions

1. Are fractionalized NFTs necessary?

Fractional NFT is just one solution that helps solve some problems such as high price, and user accessibility, so it is not a required step for NFT projects.

2. Are fractional NFTs a good investment?

In our opinion, the answer is yes, because it helps you diversify your portfolio while spending less money. However, you need to be aware of liquidity because a less popular collection will very quickly lose its value.

3. How do F-NFT owners benefit?

F-NFT holders can enjoy the same privileges as other owners. If they own more than one piece of an F-NFT, their ownership will also be more valuable.

4. Can you sell a fractional NFT?

Of course, you can sell your F-NFT in most NFT marketplaces, but it’s better to choose reputable parties as we have suggested above.

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