Fractional Ownership: Web3, Tokenization, Valuations

The official NFT for Trends #0076 — Fractional Ownership

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“..the tokenization of everything is the biggest thing we have ever seen and will ever see. It dwarfs all other opportunities for risk reward over time.” — Raoul Pal

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❓ What You’ll Learn

  • What is fractional ownership?
  • What are user-owned networks?
  • Why does fractional ownership matter?
  • How to find high-quality assets?
  • Which artist sold 50% of music royalties to fans?
  • Who gets bragging rights on fractional NFTs?
  • Which platforms are tokenizing farmland?


💎 Why It Matters

High-quality assets tend to have above-average returns


🔍 Problem

Most of us can’t afford to buy fine art, an entire commercial building or billion-dollar company.


💡 Solution

Fractionalization democratizes ownership.

Don’t have millions for a Rembrandt or Monaco condo?

No problem. Buy shares instead.


🏁 Players

Platforms

  • Fractional.art • Buy, sell and mint fractions of NFTs
  • Royal • Buy ownership in songs directly from artists.
  • Republic • Invest in startups, real estate and crypto projects.
  • FranShares • Earn cash flow from franchises without operating.
  • Otis • Trade shares of collectibles, NFTs and art
  • Pacasso • Buy shares in a second home.

Tokenized Assets

DAOs

  • WhaleShark •  DAO with a token backed by NFTs. 
  • Crypto Cookout • A group that pooled funds to buy several CryptoPunks. 
  • PleasrDAO • The group behind iconic NFTs purchases. 
  • CityDAO • An experiment in decentralized land ownership. 


🔮 Predictions


☁️ Opportunities


🏔️ Risks

  • High Valuations • Keep an eye on fundamentals and valuations. Share prices (such as $1 per share) are arbitrary. What’s the valuation? 
  • Illiquidity • How will you get paid back? Is there a secondary market for your shares? Will you have to wait for an acquisition? Understand liquidity events.


🔑 Key Lessons

  • Fractionalization increases access to quality assets and makes it easier to diversify.
  • Fractionalization unlocks liquidity and boosts valuations. See the liquidity premiums.


😠 Haters

“Facebook is a public company. It’s technically a user-owned network.”

Facebook went public after 8 years. They have dual-class shares. There’s not much overlap between users and decision makers.


“PFPs should not be fractionalized. If they are, who gets bragging rights?”

Social consensus will decide. Some add party hats to NFTs to indicate fractional ownership. 


“This report is too focused on web3.”

We looked at traditional asset classes in past reports. See Equity Crowdfunding.



🔗 Links


📁 Related Reports

  • Equity Crowdfunding • Fractionalization of non-web3 assets.
  • NFTs • A closer look at NFTs.
  • DAOs • DAOs are vehicles for financial, human and cultural capital formation. 
  • Alternative Assets • Other long-tail asset classes.
  • Crowdsourcing • See how information, effort and innovation are being crowdsourced. 


🙏 Thanks

Thanks to Stewart Townsend (Podcast Hawk), Stefan von Imhof (Alternative Assets Club), Wyatt Cavalier (Alternative Assets Club), Vajresh Balaji (SuperLayer Labs), Yarty Kim (A4E), Sean Hua, Aadil Razvi (Demand Curve), Ashwin (Trends.vc) and Rick Segal (CRAAG Angel Group). We had a great time jamming on this report.


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    📈 What else?

    Trends PRO #0076 — Fractional Ownership has more insights.

    What you’ll get:

    • 20 Platforms (233% More)
    • 10 Tokenized Assets (100% More)
    • 8 DAOs (100% More)
    • 6 Predictions (100% More)
    • 8 Opportunities (100% More)
    • 4 Risks (150% More)
    • 5 Key Lessons (153% More)
    • 10 Links (233% More)
    • 10-minute audio episode with exclusive Fractional Ownership stories, insights and opportunities.

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