Democratizing Ownership via Fractional NFTs panel from CoinGeckoCon

Altcoin Buzz is a partner with Coingecko. We are covering their GeckoCon conference this week.

In this article, we are going to look at Democratizing Ownership via Fractional NFTs session. The speakers are:

  • Eddy Travia, CEO of Coinsilium Group, Moderator
  • Andy Chorlian, Co-Founder Fractional Art
  • Jae Chung, Founder of JennyDAO and also Founder of Uniqly

The major themes in this session were accessibility, education, and awareness. Let’s take a look.

What are the Benefits of Fractionalization?

Both speakers, Chorlian and Chung, agreed:

  1. more accessibility
  2. greater reach 
  3. and lower buy-in points for buyers and traders 

were the main benefits of fractionalization of NFTs. Chung went on to say that it will be easier to integrate NFTs into DeFi generally with fractionalization too.

In fact, when asked if they were working on a DeFi app themselves or working with any DeFi apps, Chorlian said they are not. Overall access and collectors are their focus at Fractional Art. Chung said they are. It’s clear that liquidity is an issue as well as slippage in the current NFT market and with the high floor prices we see for many collections.

What is the main barrier to wider adoption of NFTs and thus Fractional NFTs?

Chorlian answered this by saying the culture is the main barrier right now. He meant that NFTs in general, aside from the craze going on, are still mostly unknown to the public. Yet, he feels that their long-term success is inevitable. There are just too many benefits to documented, digital ownership for it not to be successful. Chorlian also said we must make the UI better and easier to get more adoption faster. Chung’s response was all about education. He made the observant comment that most NFT buyers and collectors are different than the typical crypto user. Regular crypto users need education on why they should enter the NFT market. That will help the broad market as well as the fractional NFT market.

What sector aside from collectibles is the most promising for fractional NFTs?

I was pretty disappointed here by this answer as both said P2E (play to earn) gaming as the top response. It’s a good answer but I wanted them to look a little more forward to something like maybe tokenized real estate or maybe even tokenized exclusive vintages of wine.

Chorlian did make a good comparison of a use case for small utilities like how friends or family members often share Netflix passwords with each other. That answer I did like. Chung, understandably due to his own DAO said that DAOs and guilds stand to benefit a lot and soon from fractional NFTs.

Are you only on Ethereum? Any Other platforms?

Both speakers said they are on Ethereum. Fractional Art is only on Ethereum. JennyDAO started only on Ethereum and now is on Polygon and looking at Solana integrations too. Despite the big issues on ETH, they need to be there since that’s where the money is.

Are you concerned about regulations and/or being called a security?

Both had a resounding Yes to this question. There’s little doubt that a fractionalized NFT fails the Howey test in the US to determine if an asset is a security. In most countries, these are considered securities so this is a major concern for both businesses and this part of the industry. Chorlian said sufficient decentralization and lack of a custodian will help in some jurisdictions. Meanwhile, Chung said he set up this business as a DAO specifically to be decentralized enough to have a legitimate argument against their assets being securities. In fact, Chung joked the community is so involved that he’s had proposals of his own that he thought were good ideas voted down by the DAO. He hopes no central owner or custodian will help make their case against the need to apply securities laws to his business.

All in all, it was a session with a good introduction into a new niche in the NFT market, that we hope can help the market grow now and into the future.

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