Fractional Ownership of Assets
Fractional ownership is exploding and driving the next wave of NFT adoption. 💣
I heard the term “Fractional Ownership” for the first time in 2017 when a colleague quit to start a company in the space. I didn’t understand the term much back then. Enter 2022, and the growth of blockchain and NFTs has made the term common lingo. 👀
So what is Fractional Ownership?
Simply put, it allows part ownership of an asset and participation in any upside the underlying asset has to offer. Understandably, it’s relevant for high-value tangible assets such as real estate, yachts etc. 🤑
For years, expensive assets have belonged to the rich. Most of these assets continue to generate a high rate of return. However, it’s hard for an everyday investor to add this alternative asset class to his/her portfolio. For the rich, liquidating these assets is expensive, risky, and time-consuming due to the lack of a secondary market. 😢
Koia is solving this problem by acquiring these scarce and valuable assets (eg. watches, whiskeys, handbags) and selling off fractions of them as NFTs. As an investor, you can buy 1% of a $20,000 Rolex watch and enjoy all the associated benefits — price appreciation, usage in the metaverse, and defi based borrowing. As an owner of these assets, you enjoy a low-hassle and low-cost secondary marketplace.
They are on the path to becoming the Robinhood of such iconic assets. How exciting! 🥳
Koia makes money in 3 ways.
- Listing fee from the owners: 1.5%
- Royalty from the NFT owners for future transactions: 2.5%
- Retained ownership in the assets listed: 1%
As per Koia, the global market for collectables is currently worth $370bn and is projected to grow to $522bn by 2028. We don’t even know the market opportunity of these assets in the metaverse. (My guess would be — a lot). 📈
Koia’s first asset — a “Rolex 2018 GMT-Master II Pepsi” dropped on 4th April. Soon, Koia is planning to introduce “Kollector tokens” to decentralise the platform, enable trading in the Koia ecosystem, and equip its community with decision making and preferential access. 👯♀️