The world needs fractional NFTs for several reasons: they provide better liquidity, make investments more affordable and democratic, help assess NFT market value, and enable DeFi integration.

Let’s consider each of these advantages in detail.

Higher liquidity
Traditionally illiquid assets, such as real estate, luxury goods, and high-class art, can now be turned into NFTs and fractionalized in order to boost their liquidity.

When an NFT is split into multiple ERC-20 tokens and sold individually, it also attracts the attention of a lot more people. Thus your asset becomes a subject of discussion among the community and gets sold out quicker.

More democratic and affordable investments
Fractional NFTs lower the barrier to entry for new investors and in general open up opportunities for investors of all levels and bank balances. Even if their possibilities are limited and they are new to the NFT world, they can still safely join in with the trend and invest in valuable tokens, backed by real assets.

Quicker and easier NFT price estimation
Yes, F-NFTs can help asset owners quickly assess the market value of their digital tokens. They can start by fractionalizing their NFT and selling small fractions first. Once buyers begin purchasing them or offering their own prices, the NFT owner will know the overall price of their whole token.

More monetization opportunities
As an artist or asset owner, you can easily monetize your assets by selling them in tokenized fractions. If you are a business owner running your own NFT marketplace, the introduction of fractional NFTs will bring you financial benefits too as it will help attract more investors to your platform.

Easier integration with DeFi solutions
Since F-NFTs are underpinned by ERC-20 tokens, they can be used in DeFi. For example, many ERC-20 tokens can be traded on DEXs or used in staking and yield farming.

What about the benefits for NFT buyers, besides the fact that they can afford to become investors even with limited funds? Well, they can also diversify their portfolio and expand their collections of NFTs. They can buy fractional NFTs that represent pieces of different artworks or assets. With time, some of these F-NFTs may grow in price and then the buyer will reap the financial rewards.

If you want more clarification you should consult NFT marketplace development services providers.