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Everything You Need To Know About NFT Fragmentation

NFT fragmentation : Fragmented NFT

Since 2021, the overall market value and volume of NFT transactions have grown quickly, yet its concept is distant to many individuals and investors. It remains challenging for individuals to invest and benefit from the NFT ecosystem.

Poor user experiences, low incentives, and insufficient liquidity of this asset class are the three barriers that impede its ecological development and repel many users. Therefore, boosting liquidity, incentives, and user experiences is currently the pivotal direction for NFT. This article discusses NFT fragmentation meaning and more about this project without becoming too technical.

What is an NFT fragmentation?

Before delving deeper into this topic, it is of essence to weigh more into the questions like–Can NFT be fragmented? And how? How does it benefit the NFT ecosystem?

NFTs, or non-fungible tokens, are distinct tokens on the blockchain that are transferable but cannot be replaced or copied. As the name suggests, NFT fragmentation refers to splitting a non-fungible token (NFT) into smaller units, known as fragments. It allows an original NFT asset to be divided and owned by multiple parties or bidders rather than owned by a single individual entity.

The complexity of NFT circulation decreases by using partial ownership tokens, which let users divide a complete NFT into several ERC-20 standard fragmented tokens that the users can trade on the secondary market. NFT is effectively hosted in a fractional NFT smart contract as part of this “split,” which generates ERC-20 standard tokens based on the split. Users can set their own prices on the split tokens.

Why is NFT Fragmentation important?

One potential use case for NFT fragmentation is the creation of a digital asset investment fund. In this scenario, an NFT representing a valuable digital asset, such as a rare in-game item or artwork, could be divided into smaller fragments and sold to multiple investors. Each investor would then own a portion of the original NFT, allowing them to share in the profits if the asset’s value increases.

If someone owns a collection of NFT masterpieces but at the same time feels the items right now are undervalued and wishes to wait until they grow in value before selling them—but they urgently require funds. In such a scenario, one can fragment their collection and sell a few fragments on the open market instead of mortgaging NFTs. In essence, this develops a demand for collateralized financing for NFTs.

On the one hand, the fragmentation of NFTs lowers the investment entry bar, allowing more individuals to ride the wagon destined towards the NFT ecosystem and fostering its growth. On the other hand, it increases NFT’s liquidity and enables creators to earn more money from their creations. It finds artists, creators, and investors in a favorable light.

There is numerous recognized community governance in the ERC-20 realm, such as DAOs, profit sharing, mining, and derivatives. These tools can be used with NFTs once their value is divided into several ERC-20 tokens with NFT fragmentation. It helps users to engage in governance, purchase options on meta-universe props, and take advantage of NFT deposits in the future.

What are some examples of NFT fragmentation?

Users can construct a vault in the project for one or more NFTs from the same collection and split them into different fungible ERC-20 tokens. When another investor wishes to redeem an NFT from the vault, they need to pay more than the trigger price set by the vault owner. The winning bidder then can purchase one or more intact NFTs following ERC-721 or ERC-1155 standards. 


In the context of fragmenting NFTs, fractional is a very recent development. Top organizations and VCs like Paradigm, Delphi Ventures, Flamingo DAO, and Divergence Ventures recently invested a whopping $7.9 million in this project. Fractional user experience and solution design are identical to other fragmentation projects.

The curator asset fees are an intriguing feature of Fractional, among other NFT fragmentation initiatives. The person who splits an NFT is known as the curator. A curator can buy fragmented tokens at a particular share each year.


In the history of NFT fragmentation, it is likely the pioneering project in this field. It is based in Singapore. A sizable investment of approximately $500,000 was made in the platform by several businesses, including MetaCartel Ventures, Digital Currency Group, 1kx, and many others.

The second iteration of NIFTEX was released at the start of 2022. It is a portal that showcases NFT fragments from CryptoPunks, Axie Infinity, and other prominent collections. The technique for splitting NFTs in NIFTEX is straightforward. Moreover, this platform now supports NFT assets that adhere to the ERC-1155, ERC-721, and ERC-777 token specifications.

Szns, another project on the fragmentation of NFTs and yet has a different approach. The NFTs in each collection operate as the collection’s governance tokens. In this project, the token holders function together to manage and utilize the NFT collections by voting.


Bridgesplit, which uses the Solana blockchain, offers a wide range of NFT-related products, including index funds, yield farming with fragmented NFTs, and fractionalization. Fragmented NFTs can be exchanged on Solana AMMs like Raydium, like other projects. Holders of tokens can also vote on the selling price and timing of NFTs.

What is the future of NFT Fragmentation?

Although the notion of splitting up and redistributing assets has been around for a while, its more recent application in the field of NFT offers great hope for its future development. Currently, The most prominent choice to support merchants and buyers amidst the NFT market dilemma is NFT fragmentation. Smart contracts can also help divide ownership of NFTs and let retail investors share ownership of an NFT work.

However, it is essential to note that NFT fragmentation has its challenges. One of the major concerns is that fragmenting an NFT may reduce its value or authenticity, as the original work is divided into smaller pieces. Moreover, not all NFTs are suited to the fragmentation project.

It will be necessary for the NFT community to address these concerns and ensure to carry out the practice of NFT fragmentation lawfully and beneficially to all parties involved. Overall, the future of NFT fragmentation looks bright, with many exciting possibilities on the horizon.


Practice of NFT fragmentation can revolutionize the thought process of ownership and value in the digital world. By allowing the division of ownership and value among multiple parties, NFT fragmentation opens up new opportunities for investment and collecting in the growing craze of the digital realm.

Because of the lower investment entry barriers and increased liquidity, NFT fragmentation may be the next big thing to happen to the NFT market. Even rare NFT collections with a high floor price will become affordable to general people and investors alike. It is worth keeping an eye on how these projects develop in the coming years.

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