Amid the high value that non-fungible tokens (NFTs) are acquiring in the market, a new trend has emerged that leads users to group together in order to have access to ownership of this type of assets.
This is how every day the formation of decentralized autonomous organizations (DAO) multiplies in the world of non-fungible tokens. It is a type of association that allows investors to pool their funds and access the most expensive NFTs , through fractioning.
With this, the so-called NFT fractions , also known as “fragments”, arise , which are derivatives of the underlying asset. Fractions are created through various tokens, which represent a part of the asset (NFT) and can trade on a wide range of decentralized exchanges (DEX) , such as Uniswap and SushiSwap.
According to a blog post in The Desafiant , dedicated to writing about the DeFi market, at the beginning of April 2021 two new organizations were created by groups of individual investors, with the aim of buying works in that format, something that otherwise it would have been out of reach.
In this way, the publication points out how on April 2 a decentralized autonomous organization was able to win an auction for USD 525,000, buying a clip of a unicorn created by the artist Pplpleasr.
“Collector DAOs are going to be a game changer for the NFT space,” said Pplpleasr. This organization was baptized by its fans under the pseudonym PleasrDAO, in honor of the artist. They plan to continue collecting their work as a group.
Added to the wave of DAOs that are acquiring works in NFT format is a discord channel , which brought together 54 EulerBeats fans to form the BeetsDAO organization . This group managed to raise more than USD 500,000 in ether (ETH) to buy four NFTs during an auction of some algorithm-generated audio files.
The first DAOs focused on NFTs since 2020
An important precedent that relates DAOs with NFTs is constituted by the firm ARK Gallery , an autonomous decentralized organization for CryptoPunk collectors launched in 2020. Together with this group, the auction giant Christie’s put nine on sale earlier this month. CryptoPunks linked to small digital portraits .
Through this form of sale, ARK allows people to own a fraction of an NFT , and vote on whether to sell it or not, if there is an offer. In that case, they each get a proportional share of the income, based on how many shards they own.
In addition, another group of organizations must be counted that in 2020 also took the steps for the first time to buy the NFTs as a group. This is the case of @growyourbase_ who last year published this message on Twitter:
This investment fund launched in 2020 a collection plan to acquire non-fungible tokens. It already has resources in the order of USD 10 million. This money has allowed him to acquire between 600 and 700 NFT, including a series of NBA top shop moments . The pieces can be converted into fractional works and connected to emerging decentralized finance (DeFi) platforms , should DAO members vote to do so.
“The DAO even in the field, create more transparency,” said Linda Xie, cofounder of Scalar Capital, a business management specialist criptoactivos investments in the podcast A16Z last March. The executive added: “there are currently lower barriers to entry in many cases. You don’t even have to reveal your identity.
Amid this emerging trend, legal experts have warned that, in some cases, NFT fractions have a greater chance of representing securities and being rated as such by bodies such as the U.S. Securities and Exchange Commission, as reported. CryptoNews.
Non-fungible tokens are digital assets or tokenized versions of the real world that have the particularity of not being interchangeable with each other , and can function as proof of authenticity and ownership within the digital world.