Application space and current status of fragmented NFT (F-NFT).

F-NFT is a type of NFT that enables people to own a portion of an NFT to ease the financial burden. This fragmentation process allows ownership of NFTs to be shared through a set of fungible tokens tied to the original NFT.

Application space and current status of fragmented NFT (F-NFT).

From an artist’s or owner’s perspective, an NFT is a unique digital asset that exists on the blockchain – such as artwork, music, or collectibles – and it allows artists to monetize their creations. Fractionation allows users to break down NFTs into smaller, fungible pieces with various use cases.

The NFT fragmentation landscape is still relatively new and still in the very early stages of NFT adoption, but there is no doubt that fragmented NFTs are clearly a revolutionary concept and ever-changing NFT world.

Outline of this article

  • Introduction to fNFT
  • How to fragment NFTs (fNFTs)
  • fNFT platforms and comparisons
  • Advantages and disadvantages of fNFTs
  • Fragmented vs. secondary NFT collections
  • Real-world use cases

DAO as a tool for NFTs investment

Social media posts converted into NFTs

Personalization of NFTs

  • Real-world F-NFT use cases
  • Endnotes

Introduction to fNFT

Application space and current status of fragmented NFT (F-NFT).

New use cases emerge with new types of NFTs, which were originally created as digital collectibles, game items, music, and artwork. However, this is just the beginning. Financial NFTs are finding new use cases, such as representing insurance policies and liquidity provider positions.

Application space and current status of fragmented NFT (F-NFT).

NFTs are part of the new NFT financial ecosystem. NFT-Fi stands for Decentralized Finance (DeFi), simply applying DeFi to NFTs and NFTs (non-fungible tokens are records on the blockchain associated with digital or physical assets), NFTs are different from tokens, they are unique digital assets built on blockchains such as Ethereum, fNFT stands for fractionalized NFTs and belongs to the NFT-Fi type.

Application space and current status of fragmented NFT (F-NFT).

Fragmented NFTs (fNFTs)

NFT-Fi unleashes a plethora of actions for collectors, and one of these new actions is fNFT, which brings new ways to access and own NFTs.

Fragmented NFTs are NFTs that are split into smaller parts by their original owners. With fragmented NFTs, ownership coexists as a community or co-ownership. Therefore, fragmented NFTs are the breaking down of NFTs into smaller pieces to sell separately. Each part represents a part of NFT ownership, enabling a community to own a token.

So, from a buyer’s perspective, this type of NFT enables people to own a portion of an NFT that would otherwise be unaffordable, and fragmentation enables individual investors to acquire smaller stakes in high-value NFTs or baskets of NFTs as the value of NFTs rises.

From the perspective of an author, artist, or owner, part of the value can be unlocked without the NFT being sold completely. When the value of assets is very high (thousands of euros), they can be divided into more liquidity and used as collateral.

How to fragment NFTs

When the NFT is divided, the original NFT is locked in the vault.

Although ERC-721 and ERC-1155 are the two most common Ethereum standards, ERC-20 is the standard used to create altcoins or other fungible tokens.

Application space and current status of fragmented NFT (F-NFT).

ERC-20 tokens representing NFT ownership are then minted, each token representing a portion of the original NFT ownership, and a limited supply of fungible tokens representing a portion of NFT ownership is issued.

You will need to deploy a smart contract that contains instructions to generate specific ERC-20 (alternative standard) from ERC-721 (non-fungible standard).

Therefore, the fragmentation process involves generating multiple fungible tokens from a single non-fungible token. Anyone holding ERC-20 tokens can partially own the associated NFTs.

Fragmented NFT execution path:

Application space and current status of fragmented NFT (F-NFT).

NFTs must be secured in a smart contract. This smart contract needs to have instructions to divide this non-fungible token (ERC-721 or ERC-1155) into several fungible token (ERC-20) small parts.

Each ERC-20 token represents partial ownership of the NFT.

After the owner of the NFT sells it, holders of ERC-20 tokens can redeem the tokens to receive a share from the sale.

The owner of the NFT makes all the major decisions regarding the decentralization process, such as deciding on the number of ERC-20 tokens to be created, and will also determine the price of each token.

  • Sale: Organize a public sale of fractional shares at a fixed price for a certain period of time or until they are sold out.


  • Recoverable: Fragmented NFTs are a reversible process. Fragmented NFTs can be put back together to form a whole. Every F-NFT smart contract has a buyout option. This buyout option enables each NFT shard holder to purchase all parts of the NFT to unlock its original version.

To trigger the buyout option, shard holders must transfer a certain amount of ERC-20 tokens back into the smart contract. A buyback auction will be held within a set time after triggering. Other NFT shard holders have time to make a decision. Once that time is over, all parts of the NFT will be automatically transferred to the smart contract, and the entire NFT will be granted to the buyer.

f-NFT platforms and comparisons

  • Allows users to fragment NFTs by connecting wallets, depositing NFTs into a vault, and minting new ERC-20 tokens (uTokens).

Unicly has its own token, called $UNIC, which is a governance token with a total supply capped at 1M and a reduced inflation rate approximately once a month.

Application space and current status of fragmented NFT (F-NFT).

  • This is a decentralized protocol that enables NFT holders to differentiate tokens individually or on a collective basis.

Application space and current status of fragmented NFT (F-NFT).

  • NFT marketplace platform that lets users deposit their NFTs into a vault to create a fungible ERC20 token (vToken). The newly minted token represents a 1:1 claim to any random NFT inside the vault. Users can pool ERC20 tokens, such as SushiSwap, in automated market makers (AMMs) to create liquidity and trades.


Application space and current status of fragmented NFT (F-NFT).

  • Nftfy: is an Ethereum-based, autonomous, open-source platform that subdivides non-fungible tokens (NFTs) to generate ERC20-compliant scores that are fully NFT-supported.

Application space and current status of fragmented NFT (F-NFT).

The obvious problem with the above platforms is that whales are able to outbid the entire community of token holders. Another subdivision project, Unicly, tries to improve this by bundling the segmentation of multiple NFTs into a single vault, rather than a single NFT on Fractional. This allows users to hold fragmented assets of a collection of NFT assets. While this doesn’t technically make it harder for whales to plunder the entire NFT, it preserves bits and pieces of ownership for the average user.

Four concepts common in fNFTs:


A buyout auction is similar to a regular auction; The only difference is that it involves trading F-NFTs instead of physical assets.

Current section holders can retain their fractional ownership if they wish. However, a buyout occurs when an external party deposits an amount higher than or equal to the reserve price, which triggers an auction.

Holders will have to beat potential buyers by exceeding their bids. If they don’t, then all the separate pieces will automatically come together and restructure the NFT to transfer to the buyer.

When the auction ends, the NFTs are withdrawn and some owners exchange their tokens for cryptocurrency obtained from the sale.

Supply supplies can be collected

The fragmented shares of NFTs that can be purchased are called collectible supplies.

If the collectible supply is zero, it means that any part of that NFT cannot be purchased now.

Implied valuation

This is the price at which the NFT is currently valued. It can be used as a reference to determine your “entry price”.


The auction only starts when a reserve price is set, so the reserve price may be considered the lowest price an NFT can sell.

Advantages and disadvantages of fNFTs


  • Access to premium assets: Traditional finance uses decentralization to treat high-value assets, such as vacation homes and airplanes. As a result, investors can expose their portfolios to high-value assets without having to own it.
  • Reduced risk: This means fragmenting assets can reduce investment costs and the risks associated with them. NFT fragmentation provides the same benefits to NFT investors.
  • More liquidity: NFT segmentation allows smaller investors to access expensive NFT collectibles. This allows more liquidity to enter the market, as expensive NFTs can be divided into their share of value using fungible tokens.
  • Community: Fragmentation allows artists to join community members while maintaining the scarcity of their NFTs.
  • Curator rewards: NFT owners who divide assets into parts receive curator fees from the NFT marketplace of their choice. While owners can set and update the amount of this fee, it has a maximum price limit to prevent reckless pricing.


  • Restructuring: As mentioned earlier, it’s possible, but it’s really hard. One difficulty that comes with NFT segmentation is the process of “putting it back together.” In order to remove the entire NFT from the vault, all holders must sell their shares, which means that all the pieces must be put back together.

Fragmentation with secondary NFT collections

As I explained, fragmentation allows artists to join community members while maintaining the scarcity of their NFTs.

However, we need to distinguish between secondary NFT collections and fragmentation.

  • Secondary NFT collection : refers to the artist or creator who may decide to publish another collection with similar characteristics to the previous one. Meanwhile, fragmentation is when artists break NFTs into fungible tokens, making it possible for multiple people to own an NFT.

Potential real-world use cases

1) DAO as a vehicle for NFT investment.

DAOs are gaining traction thanks to the community surrounding a piece of art that few individuals can afford, making the accessibility of rare and expensive NFTs possible. Typical cases: PleasrDAO, Partybid.

2) Convert social media posts to NFTs.

Social media posts can be converted into NFTs and distributed to individuals’ original supporters, resulting in community-based rewards for fans.

For example, the first likes of a very well-known creator in a particular topic, his or her first Instagram post or tweet may be rewarded with a small portion of that post for their initial support. Typical cases:

  • Minti: is a platform that allows users to use their social media posts as NFTs and create a digital identity around content that can be monetized. This puts power back into the hands of content creators and allows their communities to better support their creations without any middleman platform for maximum benefit. Social media NFTs enable fans to get more involved in content posted by artists and allow artists to generate additional revenue themselves.
  • CocoNFTs: Make it very easy for social media content creators to create NFTs.
  • BlogToNFT: Your web content, such as blogs, can also be converted to NFTs, which is exactly what BlogToNFT was created for. To help users convert their blogs to NFTs. All you need to do is sign up and have your own blog to convert.

NFT personalization

Thanks to the Metaverse, the digital representation of an individual will require more individuality and uniqueness. This can be achieved by decorating your NFT with certain defining features that make your image in the Metaverse different from others.

  • Filta: is a face-filtering NFT marketplace. We are still in an extremely early stage, but there is no doubt that these concepts herald exciting solutions that will make the NFT ecosystem a part of our daily lives.

Real-world FNFTs use cases

  • real estate

By replacing intermediaries with smart contracts, NFTs can greatly speed up the process of buying a property.

Real estate investment requires a lot of upfront capital to purchase any property, which means that only a few people can invest in the real estate sector. NFT fragmentation is to help solve this problem by selling fragmented shares of real estate NFTs, making real estate investments affordable.

  • Art space

This use case It has been developed in the article because it is the most common use case.

From the perspective of creators and investors, with the advent of fragmented NFTs now, even small investors can invest in expensive artwork, and creators can earn huge returns when their creations are sold.

A recent example, Sir Anthony Hopkins launched his first NFT collection, *The Eternal Collection, in collaboration with *Orange Comet a few days ago.

The concept of the Timeless Collection is an interpretation of the numerous character archetypes shaped by Sir Anthony Hopkins during his illustrious film career, drawing powerful energy from his uplifting artwork.

The NFT collection will also offer collectors an exclusive IRL event that gives them the opportunity to get in touch with one of Hollywood’s greatest icons.

  • Music

Canadian rapper, singer and record producer Tory Lanez unveiled the first NFT collection, releasing NFT digital albums directly to fans, selling 1 million digital units in less than a minute.

As NFTs and fNFTS are used to help them access resources to build and broadcast, artists are starting to experiment with hybrid events to bridge the gap between physical events and online participants.

They’re not just VR or AR or even music companies. Artists create experiences that connect artists with fans. So this type of hybrid experience makes sense.

  • Game

Unlike other types of crypto games, Play-to-earn games allow players to earn, buy, sell, and even give away in-game digital assets.

Such multiplayer games can use F-NFTs to bring players together to buy and sell expensive in-game assets by investing in their decentralized shares.

Multiplayer games like Star Atlas and Axie Infinity feature NFT technology, which is used to allow players to get together to buy more expensive items.

  • Collectibles

If CryptoPunks were not subdivided, ordinary investors would not be able to invest in them, given their high price. Fragmented NFTs will only make it easier for NFT enthusiasts to purchase NFTs as collectibles.

  • domain name

Domain names such as .crypto and .eth have had great success in the web3 space. Dividing domain NFTs and selling them can also be a huge business.


The NFT segmentation landscape is still relatively new, and if a winner is to emerge in this space, factors such as curatorial fees/incentive structures for NFT owners, artists, and investors will determine the champion in this space.

Although the NFT segment is still relatively new, there is no doubt that fragmented NFTs are a revolutionary concept and ever-changing NFT world and will remain strong.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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