Fractions, how do they work?

The NIFTEX protocol creates ERC20s in return for NFTs. These ERC20s are referred to as "fractions" and more informally "Shards".

Fractionalization Lifecycle

At a high level, the NIFTEX fraction lifecycle comprises the following steps:

  1. Setting up the fractionalization through a frontend (e.g. via niftex.org);

  2. Transferring the NFTs into custody;

  3. ‚ÄčDistribution of the fractions via a sale or other methods;

  4. Various applications of fractions, such as trading and governance of NFTs with rights or NFT baskets;

  5. Recovery of the NFT via various methods, usually a "buyout".

Core Elements

  • NIFTEX v2 aims to be a permissionless on-chain service, meaning users will not depend on a centralized entity at any step in the lifecycle. The website at niftex.org is maintained by the NIFTEX team and can be fully replaced by alternatives.

  • NIFTEX v2 uses modules in order to ensure flexibility and extensibility as fractional ownership continues to evolve in the NFT space.

  • NIFTEX v2 uses a custom bonding curve to provide optimal market conditions for NFT fractions.