Fractional Ownership
Fractional ownership divides an asset into smaller shares or tokens, allowing investors to buy and hold parts of an asset rather than the entire thing. This model is particularly popular in real estate, collectibles, and NFTs.
How Does Fractional Ownership Work?
The process involves several steps:
Asset Tokenization: The asset is tokenized on a blockchain, dividing it into fractional units represented by tokens.
Purchase of Fractions: Investors can buy tokens representing a share of the asset, giving them partial ownership.
Profit and Usage Rights: Token holders may receive dividends, voting rights, or a portion of any appreciation in the asset’s value.
Why is Fractional Ownership Important?
Fractional ownership provides several benefits:
Accessibility: It allows more people to invest in high-value assets by purchasing fractions rather than whole assets.
Liquidity: Fractional ownership provides a more liquid market for traditionally illiquid assets, as fractions can be traded more easily.
Democratization of Investment: Fractional ownership enables broader participation, allowing smaller investors to diversify into high-value assets.
In summary, fractional ownership enables shared investment in assets, democratizing access to high-value opportunities and improving market liquidity.