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09/29/2021

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Fracada: A protocol for fractionalizing NFTs

Non fungible tokens (NFTs) have found a very popular application as on-chain representation of different assets, particularly artwork.

Fracada: A protocol for fractionalizing NFTs

Introduction

Non fungible tokens (NFTs) have found a very popular application as on-chain representation of different assets, particularly artwork.

A natural step is fractioning the NFT: what if you have a NFT you want to share with your friends, or if you buy an NFT together, how do you indicate shared ownership?

Here we present a protocol where you can fraction your NFT and get back a limited amount of of tokens representing fractions of that NFT (and they can be traced back to it).

Design

The contract will either receive the NFT to lock and a number in the redeemer indicating how many fractions (tokens) of the NFT to mint or receive all the fraction tokens and pay back the NFT while burning the tokens.

Fractionating the NFT

Fractioning is done in two steps:

  1. Lock the NFT in the contract.
  2. Mint the tokens and pay to the public key that locked the NFT in the previous step.

Locking the NFT

This step locks the NFT in the contract with the datum containing the nft asset class and the owner, we set the amount of fractions to 0 (no fractions yet)

Off-chain

We build the datum and lock it in the script:

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ORIGINAL SOURCE

https://medium.com/dcspark/fracada-a-pro...

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