Creatives can tokenize their works. Tokenizing means creating and digitally storing these works on a blockchain. Once tokenized, new tools let creatives create fractions for a given work. There are 3 main benefits when creatives fractionalize their works.
Defining Token Fractions
Token fractions are pieces of a bigger whole, such as an artwork. Token fractions are not copies of an artwork. Copies of an artwork are called editions. Token fractions can represent fractions of ownership in a single artwork, just like Apple shares represent fractions of ownership in a single company.
Imagine a digital artwork, like "CryptoPunk #2386" below, one of the earliest tokenized and fractionalized artworks:
The ownership certificate of this jpeg file is represented and stored as a single token on the Ethereum blockchain. That single token notwithstanding, the owner of the above CryptoPunk image can create new tokens. And that's what the owner did. The owner created new tokens representing ownership shares, or fractions, of the image. But how did the owner create these token fractions, and why?
Creating token fractions
The process to create token fractions takes 21 days, 5 lawyers, 3 tech guys, and 5000 USD. Just kidding. The process is simpler, faster, and faster than you think. First, go to a website that lets users create token fractions. NIFTEX is a good example. On the website, log in or connect your digital wallet that holds your tokenized work. Then, choose among several pricing options and issuance options for your token fractions, and click finish. The process to create token fractions takes no more than 10clicks, 10min, and a maximum of 10USD.
Benefits of token fractions
There are 3 main benefits to owners and potential buyers of token fractions.
- Make an illiquid asset liquid. The more expensive an artwork, the fewer the number of potential buyers. The fewer potential buyers, the longer it takes to sell something. By creating token fractions, the number of potential buyers increases, and the faster an owner can sell (a fraction of) a work.
- Get more frequent price updates for a creative's work. The cheaper the fractions of an artwork, the greater the number of potential buyers. The greater the number of potential buyers, the greater the number of transactions. Each time someone executed a transaction by buying a token fraction, the price for the entire artwork (and all fractions) updates.
- Get more people interested in a creative's work. Because more people can now own an a creative's work, creatives get more attention. The number of people collecting a creative's artwork may also, in itself, represent "social proof" of the value of a creative's works, which in turn increases financial value.
Creatives can tokenize something and split it into fractions in 10 clicks, under 10min, and with less than 10USD. Token fractions have 3 main benefits. Token fractions make any liquid assets liquid. Token fractions generate more frequent price updates for a tokenized work. And token fractions get more people interested in a creative's work in general.