Fractional Ownership: Investing in the Decentralized Finance Future?

Imagine doing your morning coffee rituals, scrolling through your phone and going through your investments, suddenly it strikes out that you own 0.004% of a Picasso. Meanwhile, you get a call from your friend who is boasting about their full ownership of a mass-produced print from the furniture store. Who’s the real art collector now?

This is possible through fractional ownership, which is revolutionizing investment by allowing people from anywhere to own parts of high-valueassets without selling their souls to finance them. Be it a luxury penthouse, a startup, digital art or a fine masterpiece, owning a fraction of them is now just as beneficial as owning the whole thing, because it does not just mean investing for a need anymore, but also for a want of your desires!

‍What is Fractional Ownership?

In simple terms, fractional ownership is the ability to buy a small part of an asset, rather than paying for the entire thing, proving to be one of the smart investing strategies! It’s like going to a restaurant for dinner with a couple of friends where everyone pays for their share, except for food, here you’re buying a share of a luxury villa.

We all know that traditionally high-value investments were reserved for the high-net-worth individuals, since only they could afford it. But thanks to fintech and blockchain technology, fractional ownership is making investing more accessible and affordable.

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 The Rise of Fractional Investing

Fractional ownership isn’t just a trend, it is apart of a bigger movement toward democratizing investments. Here’s why:

1. The Sharing Economy Effect – People are renting more and owning less, from cars to vacation homes.

2. Fintech Disruption – Digital platforms make investing in fractional assets as easy as buying stocks with the help of tokenization.

3. More accessibility in High-Value Markets –Luxury collectibles now don’t require people to learn how to become wealthy to own them, butown fractions of them, without being the wealthiest.

And the best part? You don’t need millions of euros to get started.

How Fractional Ownership Works

Fractional ownership can occur in several forms. At NYALA,we focus on the fractionalization of financial instruments, such as bonds or equity:

Step 1: Identification of an asset – When it comes to general fractionalization, assets can beanything: from real estate to bonds of a company or luxury items.

Step 2: Ownership of the selected asset is split into Tokens – Instead of buying 100% of the asset,it’s divided into small fractions depending on the investor’s custom needs.

Step 3: Digitization on blockchain: Ownershipis recorded as digital tokens on a blockchain, where each token represents asmall fraction of ownership in the house. For example, if 1,000 tokens arecreated, each token represents 0.1% ownership.

Step 4: Investors buy a portion – You basically invest in a piece of theasset, just like buying shares in a company.

Step 5: Profit & Liquidity – Earn rental income or dividends,and sell your share if you want, with just a few clicks.

Fractional ownership is investment, minus the hassleof full ownership because full means you take on all the risk but fractional meansyou share the ride—and still get to enjoy the view!

The advantage of Blockchain and Fractional Ownership

Blockchain is what makes fractional ownership truly seamless because it is committed to security, as ownership isrecorded digitally on the blockchain, accessible at any given time to all theowners. Every transaction is visible and verifiable, reducing the risk of fraud and making the whole process transparent.

It’s like owning tokenized digital stock in any physical asset you want to own—without the mountains of paperwork.  It also helps in diversification of your portfolio to lower risks according to Capital Asset Pricing Model (CAPM). Spreading investments across real estate, luxury assets, or Start-ups will help in avoiding risk that's caused by investing in one stock or one industry only. Owning 100% of a high-rise? That’s cute. Owning fractions of 10 high-rises? That’s the diversification you need!

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