GlossaryIntermediate
Fraction Token
A fungible token representing a proportional ownership claim on a single NFT locked in a vault.
A fraction token is a fungible token minted when an NFT is fractionalized, representing a proportional financial claim on the NFT locked in the corresponding vault, rather than direct control of the NFT itself.
Fraction tokens can be bought, sold, or traded independently of the underlying NFT, and their market price can diverge from what the whole NFT might actually be worth.
Examples
- Holding a fraction token gives a claim on the vault's value, not direct ownership of the NFT.
- A fraction token's price can drift from a fair value for the underlying NFT.