Introducing Fragment Protocol and the exciting new world of secondary NFT markets
So, you bought an NFT, then what? While the NFT market has exploded with an influx of new creators and buyers, what those buyers and owners could then do with their NFTs has been fairly limited. You could hold onto it of course, or resell it and try to make a profit off of it, but, outside of that, you didn’t have that many options. Until now.
Fragment Protocol is a new project that is revolutionizing the NFT industry. The concept behind the project is fairly simple. Once you’ve bought or created an NFT, using Fragment, you can fractionalize ownership of it by minting a set of corresponding tokens on another network. From there the options are manifold. You can use the fraction tokens for trading, fundraising, lending, borrowing, staking or any other business model applicable to the DeFi world.
The benefits that Fragment brings to the NFT industry are twofold. On one hand, the protocol redresses the virtual dead-end that has existed for NFT owners. While there has been great excitement over the technology that has brought many new consumers and artists into the flow, the limited scope of activities outside of selling and reselling could have led to stagnation and decreasing interest. Fragment’s secondary market adds a whole new layer of economic activity that will help the industry to grow and more firmly establish itself.
On the other hand, Fragment has opened the door for more consumers to get involved in the NFT space. We have all heard about Beeple’s NFT that went for $69 million, and the scores of songs, artworks and highlights of famous people that have garnered hefty sums on NFT markets. But who can afford to purchase these outside the mega-rich? Even artworks that only go for sums in the thousands are too much for most people. And while there are a relatively large number of potential buyers now, how long can that last without a more inclusive price threshold that allows more people to participate?
Fragment Protocol has solved that problem by opening up fractionalized ownership and investment pathways in secondary markets. Using Fragment, the owner of one of Beeple’s artworks could, in turn, offer equity in the ownership of the artwork in fractionalized, more affordable pieces. Not only would this allow more buyers to emerge, the subsequent influx of liquidity would go a long way towards further stabilizing the NFT economy as it develops further.
The way the Fragment Protocol works is pretty straightforward. First, you start by creating or purchasing an NFT. From there, you deposit and freeze the NFT on our ETH smart contract. Once the NFT is frozen on our contract, a corresponding set of BEP-20 tokens will be minted on your address on the Binance Smart Chain network. The great part about tying your NFT to BSC is that you can enjoy the network’s smooth operation without having to deal with the high gas prices you get with ETH, where minting an NFT can cost upwards of $50. Here you determine how many BEP-20 tokens will be minted and each set of BEP-20 tokens are unique and tied to their specific NFT.
With the NFT frozen on the Ethereum network and your corresponding BEP-20 tokens issued, you are then free to conduct an ICO/IDO with your token and use the liquidity you have accumulated to create pairs for your token on PancakeSwap or any other decentralized exchange. With solid liquidity behind you, your possibilities are virtually unlimited. Your token will be frozen on the Ethereum network for as long as you want until you withdraw it. In order to withdraw your NFT all you have to do is return all the BEP-20 tokens you have minted to the corresponding address on the BSC network.
While the NFT economy has been booming of late, fears that it may be a flash in the pan were compounded by the lack of real use-cases for NFT owners. Fragment Protocol changes all that. With the introduction of secondary markets, lending and staking, sustainable development of the NFT space is about to kick into a higher gear.
