The Split NFT Revolution: From High-End Collectibles to Mass Asset Turnaround

At the beginning of 2024, a surprising data point stands before us: when the total market capitalization of NFTs reaches $50.51 billion, the segmented NFT (FNFT) niche accounts for only $2.68 million. This huge gap precisely illustrates the growth potential hidden within FNFTs. Rather than saying FNFTs are new, it’s better to see them as a democratization movement within the NFT world—allowing digital artworks valued at millions of dollars to enter the wallets of ordinary investors for just a few cents.

How FNFT is Changing the Rules of the NFT Game

Traditional NFTs are like luxury homes in the real estate market—unique and indivisible, with owners boasting their rarity. But this rarity often becomes a nightmare for liquidity. In contrast, segmented NFTs do the opposite: they decompose an NFT into millions of tradable fragments through smart contracts.

Imagine a $3 million NFT divided into 1 million parts. Each part might only be worth $3 but can represent ownership of the original asset. This is the core magic of FNFT—democratization.

Technically, this process usually follows a three-layer conversion: ERC721→ERC1155→ERC20. The first step converts an indivisible NFT into a token standard that allows partial transfers; the second upgrades compatibility; the third finally generates a standard tradable token. This process is fully automated by smart contracts, with the original owner defining the number of divisions, price per unit, and other parameters.

Market Status: From Niche to Mainstream Transition

Although segmented NFTs are still young, their influence is accelerating. 2021 was a breakout year for this field. After experiencing a crypto winter in the following years, data from early 2024 shows FNFTs are gradually regaining popularity.

Currently, three main types of participants are driving this market globally:

• Decentralized platforms: implementing segmentation and trading through Automated Market Maker (AMM) models
• Major exchanges: some mainstream exchanges are beginning to integrate FNFT features, such as launching fractionalized NFT products through partnerships
• Professional investment DAOs: these organizations purchase high-value NFTs, then segment and sell them to the community

Why FNFT is So Attractive to Investors

The End of Liquidity Dilemmas

There’s a famous case: Jack Dorsey’s “First Tweet” NFT sold for $2.9 million in 2021. A year later, the seller tried to sell it for $48 million, but what happened? The highest bid was only $30,000. This gap wasn’t because the NFT wasn’t valuable, but because there were too few buyers—liquidity had dried up.

Segmentation can change all that. By dividing a high-value collectible worth millions into 10 million parts, each costing just a few dollars or cents, liquidity issues are solved.

Lowering the Entry Barrier

A single Bored Ape Yacht Club (BAYC) NFT might require an investment of $300,000. But through segmentation, an ordinary investor can hold a small fraction for just a few dollars. This democratization turns high-end art markets into accessible ecosystems for everyone.

A New Asset Valuation Mechanism

Interestingly, once an NFT is segmented, the market re-evaluates the true value of the original asset based on the trading volume and prices of its fragments. This provides a more transparent pricing mechanism than traditional rare item trading.

Seamless Integration with DeFi

Since FNFTs are ultimately converted into ERC-20 tokens, they can directly enter the DeFi ecosystem. This means you can trade on decentralized exchanges, stake in liquidity pools, participate in yield farming, or even borrow and lend—things that traditional NFTs cannot do.

Classic Cases: Top NFTs Becoming Public Assets

CryptoPunks’ Path to Mass Adoption

In April 2022, 50 CryptoPunks were divided into 250 million “uPunk” tokens. This means anyone can become a “Punk” with just a few cents. On decentralized platforms, these tokens traded at about $0.046 each. The symbolic significance of this transformation far exceeds its financial meaning—it shifted from an exclusive symbol of wealth to a publicly accessible asset.

Grimes’ Digital Art Democratization

Canadian musician Grimes earned $6 million from NFT sales in 2021, but most of her fans couldn’t afford such amounts. So, she split her two works, “Newborn 1” and “Newborn 3,” into 100 parts each, costing only $20 per part. This move not only increased sales but also fostered a closer relationship between the artist and fans.

Doge Legend: From $4 Million to $44.6 Million

The famous Doge meme NFT sold for $4 million in 2021. Its owner (a DAO composed of artists and collectors) made a bold decision: to split it into 17 billion $DOG tokens. The result exceeded expectations—over the following months, they raised $44.6 million by selling these fragments. Each $DOG traded at about $0.0032. This case perfectly illustrates how segmentation can unlock value trapped in a single high-priced asset.

Mutant Cats Community Experiment

This DAO-managed platform takes a more aggressive approach: it regularly acquires top NFT collections like Cool Cats, CryptoPunks, and BAYC, then segments them using its $FISH tokens. Holders not only share in the assets but also gain community governance rights and exclusive airdrops—something unheard of in traditional asset ownership.

Trading Platform Ecosystem: The Choice is Yours

Decentralized platforms have become the main venues for FNFT trading. These platforms typically use AMM models, allowing users to freely mint, trade, and manage segmented assets. Compared to centralized exchanges, they offer higher transparency and autonomy, though users need to manage their private keys.

Some leading exchanges are also experimenting. They collaborate with segmentation protocols to offer pre-segmented trading pairs of popular NFTs, simplifying participation—at the cost of reducing some autonomy.

Realities Investors Must Face

Segmented NFTs are not risk-free utopias. Before jumping into this field, rational investors should consider the following:

Regulatory Gray Areas

Most FNFTs are in a regulatory vacuum. Different countries and regions have varying legal classifications—some see them as securities, others do not. This means regulatory policies can change at any time, and investor protections are far below those of traditional financial products.

Intellectual Property Risks

A seemingly legitimate FNFT may hide IP issues. Before purchasing any fractional tokens, verify whether the original creator truly owns the rights. While blockchain metadata can provide some proof, it’s not foolproof.

Code as Law Trap

The security of FNFTs depends entirely on the quality of their underlying smart contract code. Design flaws or discovered vulnerabilities could lead to fund losses. Audits are important, but even audited contracts may face unforeseen risks.

Volatility Fate

As an emerging asset class, FNFT prices are far more volatile than traditional investments. In a bear market, liquidity may evaporate again, trapping you in a situation with high value but no market.

Irreversible Decisions

Although theoretically, the community could reassemble all fragments into the original NFT, in practice, this is extremely difficult. Once divided, expecting full restoration is almost impossible.

Long-term Outlook for FNFT

Segmented NFTs are unlikely to be a fleeting trend. Whether Bitcoin is at $10,000 or $100,000, whether the market is bullish or bearish, the logical necessity of FNFT as an asset structuring method is clear.

What is it doing? Moving high-end asset markets from exclusivity toward inclusivity. This shift could ultimately change our understanding of “ownership.” Not everyone needs to own a full Picasso, but everyone might want to own a pixel of it.

For creators, collectors, and ordinary investors, FNFT opens a brand new door. Opportunities and risks coexist, but that door is indeed wide open.

Further Reading

• Understanding the operational logic of the DeFi ecosystem
• Investment logic of NFT Mystery Boxes
• Blockchain wallets and asset security
• The future of real-world asset tokenization (RWA)
• The difference between NFTs and semi-homogeneous tokens (SFT)