The total NFT shards market capitalization has reached $290,274,439 according to data from ShardMarketCap.io, a DappRadar tracking service for NFT shards. Currently, data includes the Niftex and Fractional.art platforms and tracks 34 fractionalized NFTs.
It is important to note that ShardMarketCap.io is currently still in beta and that there are more sharded NFTs than what is shown by SMC. The rule is that sharded NFT needs to have a liquidity to market cap ratio of at least 1%. Currently SMC supports Niftex (v1 and v2) and Fractional.art.
Share of the NFT pie
Given that NFTs are selling for significant amounts of money the idea of fractionalization is popping up to allow smaller investors a chance to get involved. In essence, this allows anybody to invest in a valuable item. The process of fractionalization or sharding as it is also known is quite simple. Take 1 NFT and break it down into segments, each with its own token and value proportionate to the original NFT.
Additionally, there is great interest in the opportunity to buy fractional shares of large NFT collections. For example, a collection of fifty CryptoPunks, one of the most valuable NFT collections on the market was fractionalized into millions of tokens recently. Earlier this year the Metapurse NFT fund fractionalized their $2.7 million Beeple collections and the accompanying virtual museums. The B20 token now has a market cap of $5.9 million as one B20 token is $1.20.
Platforms such as Niftex and Fractional.art lead in the space, but as mentioned above, there are several more services offering the fractionalization of NFTs. SMC offers a snapshot of the current lay of the land for projects with a liquidity to market cap ratio of at least 1%. Moreover, the fact there is already over a quarter of a billion dollars on these two platforms speaks volumes for the popularity of sharding NFTs even at this early stage.
DOG Shards
At the top of the pile, we see the Doge NFT. With a market cap of over $216 million and a total supply of 884,340,685. Simply put, this means an asset with a value of $216 million has been broken into 884,340,685 pieces and the value of each piece is now $0.01. For example, an investor could own 1000 pieces of the total supply and therefore have a $10 investment in the Doge NFT. If the value of each piece rose to $0.02 then the investor would be then holding $20.
Considering the total market cap of all shards tracked by DappRadar is $290 million, the fact the Doge NFT holds $216 million of that is significant. Of course, this is the NFT attached to the now infamous DOGE token popularized by tech billionaire Elon Musk. His simple tweet on the 20th December 2020, “One word: Doge”, caused trading volume for the meme coin to explode. Subsequently. the price pumped 40%. The “Doge” meme from 2010, which portrays a Shiba Inu dog named Kabosu, inspired the creation of DOGE. A photo of that same dog went on to sell for $4 million as an NFT in June 2021. PleasrDAO, the collective that bought the Doge meme NFT, then offered fractional ownership over it, starting on Wednesday, September 1st.
Through the Fractional.art platform, PleasrDAO fractionalized the NFT — as a result, the NFT is now represented by billions of ERC-20 tokens. In this case, PleasrDAO has called the tokens DOG. Investors can then buy as many or as few DOG tokens as they can afford on Fractional.art and on decentralized exchange Miso. How many tokens an investor buys will determine their ownership stake in the “Doge” meme NFT, though PleasrDAO will retain majority ownership. Interestingly, DOG holders will also be able to participate in decision-making surrounding the NFT. For example, DOG holders will vote before the NFT is sold in the future.
APE Punk
Another interesting case to explore is the Ape Punk NFT. This NFT has been fractionalized in a more simplistic way regarding the volume of tokens being made available for potential investors.
Ape Punk is CryptoPunk #2386 and not one of the other CryptoPunk inspired NFTs. It’s an OG, original. Using the DappRadar NFT valuation tool we can see the last sale of this CryptoPunk was for 77 ETH or over $268,000 a year ago. With a current market value estimated at $4.3 million.
The owners, MrTpunks offered the first sharded rare punk through the Niftex platform. Out of the 10,000 famous OG CryptoPunk NFT’s, there are only 24 Apes. Making this punk very rare and valuable. The NFT was broken down into 10,000 shards with a price of 0.0175 ETH or around $61 each and a total valuation of 175 ETH.
Now we see the ape has a market cap of $8.4 million and each shard is worth $841.35. Representing a 1274% return on the original investment in one shard. Importantly, we see such an ROI result on the CryptoPunk for those that jumped in early. Not for the Doge NFT. Clearly owning a shard of one of the original, and extremely rare Ape CryptoPunks was a savvy move.
Getting a piece of the pie
Getting involved in fractionalized NFTs is simple and can be done right here on DappRadar through our Token Swap page. This can also be accessed by clicking buy next to the shard listing on SMC. Users get direct access to the best trading prices across a variety of protocols on Ethereum, Polygon, and BSC. As mentioned, once sharded, the NFTs are broken down into tokens. In the case of CryptoPunk#2386, the tokens are called APE$. For the Doge meme NFT they are called DOG.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in ETH, BTC, ADA, MATIC, SAFEMOON, HEX, LINK, GRT, CRO, OMI, USDT, SOL, SHIBA INU, AVASTR, RAY, BOSON, AND OCEAN.
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