NFT fractions have taken us on quite a ride so far, and we've only just begun. While a lot remains to be discovered, the NIFTEX team wants to make sure we get the basics right and continue to respect the core of what non-fungible technology has to offer.
Part of that innovative core is the smooth enabling of a stream of royalties supporting artists as their tokenized artworks change hands. So far this has been enforced at the marketplace level - each time an NFT is sold on a marketplace that supports royalties, part of the proceeds are reserved for the artist.
Fractionalization "breaks" this flow as an NFT is stored indefinitely in order to enforce the backing of the fractions created from it. The NFT is fixed to an address and its ownership doesn't change. Meanwhile, its fractions trade on the open market and the artist currently misses out on rewards from that micro-level activity.
Instead of trying to design a system that takes a cut every time a fraction is traded, we wanted to explore a different avenue. What if an artist could keep a fraction of their artwork? This is what XCOPY and NIFTEX have already done with The Other Deadness - the artist kept 50 out of 500 fractions and will thus benefit if the market does well.
However, we wanted to make sure that any artist could benefit from one of the artworks being launched on NIFTEX - even if they no longer own it. Starting today, when fractions of an artwork NFT are created, 5% of the fractions will automatically be reserved for the artist. On completion of the Launch the fractions will be sent to an address (0x3dDB542f4BBc36C99e1AE02d99ECDBBB48831c8D - currently controlled by NIFTEX, but we would be happy to make this a multisig setup) to custody the fractions until claimed by the artist.
We think automatically giving creators a fraction of their work is a promising approach and hope it will prove a sustainable method of supporting the blockchain artist community. As always, everyone is welcome to join us in Discord or on Twitter with their thoughts and feedback. One thing is for sure though: the Future is Fractional!