The day before yesterday, this picture swept the encryption community:

On the 23rd, path.eth@Cryptopathic created Feisty Doge's NFT token NFD, which is a fragmented NFT based on the Dogecoin avatar. NFD divided the ownership of a photo of a Shiba Inu (Dogecoin head prototype) formerly known as Kabosu, with a total of 100 billion copies. On the day of issuance, NFD rose to $0.0009, and the transaction volume in the past 24 hours exceeded $140 million.

On the day of its release, this picture became the most expensive NFT with a valuation.

If the fragments of the NFT are visualized, then an NFD held by an investor looks like this:

Then there is the leverage effect of the event. Some cryptocurrency derivatives platforms soon provided operating tools for borrowing, lending, and shorting NFDs. Investors can establish short positions through Uniswap V3 and Sushiswap. Soon, the encryption community focused on the surge in liquidity after NFT fragmentation. Dog picture NFD has become an opportunity for the long-lost outbreak of NFT "fragmentation". However, the market's views on NFT "fragmentation" are polarized. Is it a blessing or a curse?

Has the NFT version of "combination order" phenomenon "prairie fire"?

How did NFT fragmentation evolve and suddenly become popular because of this dog photo? The iconic case of early NFT fragmentation is the painting "Everydays: The First 5000 Days". This painting was also the holder of the most expensive NFT before NFD broke the record. At the end of 2020, an NFT fund called Metapurse acquired 20 works in "Everydays: The First 5000 Days" and issued a total of 10 million ERC20 tokens B20 (Beeple 20 Collection) on Ethereum. Offered in two installments. Through these tokens, the NFT assets held by the fund are divided. 59% of the total B20 tokens are owned by Metapurse, with the remaining 41% reserved for artists, partners and investors. Under such a distribution, B20 is accused of being highly centralized and has disadvantages.

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(Image source: NFTX)

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(Image source: NFTX)

The encryption community also has active explorations in NFT splitting, and a new type of community called "NFT DAOS" has emerged, which provides NFT management services within a niche range based on the community. Take the Jenny Metaverse DAO that appeared earlier as an example. The community is composed of NFT collectors, artists, creators, projects, funds, and influential people. The ERC20 token uJenny was issued on the Unicly platform, representing the organization Fractional ownership of all NFTs purchased.

In addition, uJenny tokens have been given some new functions, such as participation in mining on the Unicly platform. In splitting the CryptoPunk avatar, "circle culture" seems to have found the right soil. On Discord, an overseas community application platform, some group owners acted as the leaders and initiated avatar “crowdfunding” through the Dao organization.

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(Picture: On the social platform, an investor showed crowdfunding to purchase PUNK through DAO)

Through these methods, investors only need to pay a small fee to partially hold the avatar known as "Lamborghini in NFT". Interestingly, in overseas communities, some NFT investors also shared their investment logic of “fixed investment” in PUNK in this way, thinking that this is “within their ability”. In overseas communities, discussions on NFD have pushed the enthusiasm for fragmented NFT to a high point: with the emergence of Shiba Inu pictures with Meme characteristics and NFD, the industry has rekindled the "liquidity" and "increment" brought about by NFT fragments. "Expectation. Affected by NFD, in just a few days, the attention of NFT investors quickly shifted to CryptoPunk fragments. The case of NFD provides a case for those who paid a lot of money to buy a picture: fragment and sell their own valuable NFT, and even have the possibility of further profit on the basis of owning the NFT. Since the development of NFT fragmentation, the mainstream ideas are:

Fragmentation of the NFT ontology: like a precious painting. Fragmentation of NFT equity: equity can be pledged equity, working equity, or liquidity dividend equity. Link NFT with other methods: such as liquidity mining, NFTFi, GameFi, etc. It can be seen that there is still a lot of room for fragmented NFT waiting to be mined.

It can be seen that there is still a lot of room for fragmented NFTs waiting to be tapped.

Community views are sharply divided

Is NFT fragmentation the general trend or liquidity overdraft? The popularity of NFT fragmentation has allowed the market to see more possibilities for NFT in the DeFi era.

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(Data source: Coinmarketcap)

In addition, NFT mortgage lending is another long-standing difficulty on the NFT track. If NFT fragments can continue to obtain higher liquidity and act as collateral, then the mortgage problem will be solved.

For most investors, "Everydays: The First 5000 Days", which is far more than 69 million, is out of reach, and the top NFT asset split tokens may represent a development trend. Fragmented NFTs are just as easy to understand and accept as ordinary tokens. After NFT fragmentation lowers the threshold for investors' participation, there is the possibility of feeding back the NFT ecology, which is an imaginative development direction.

However, there are also more rational investors who believe that this is a "matryoshka" strategy, which transfers investment risks to more individual or retail investors. This view believes that the "NFT is a token" model is too magical. In the fragmentation of NFT, there are still huge problems with the integrity of ownership and the effectiveness of the decision-making mechanism, and the value bubble of NFT may be enlarged again.

On the other hand, although the number of fragmented NFT projects is increasing recently, from the perspective of publicity, operation, promotion, etc., there is little difference from the project "issuing currency" in the ordinary sense. After replacing FT with NFT, even issuing Investors have virtually avoided many risks, and these risks have undoubtedly been transferred to market investors.

This concern is not without reason. The mainstream opinion in the industry believes that concepts such as NFTFi and GameFi are one of the main driving factors for this round of crypto market correction. The position of "50,000 US dollars" of Bitcoin is just regarded as the "critical value" of the entire market. Whether BTC can break through the position of 50,000 US dollars is unpredictable. In this case, the funds that can support the high value of NFT products Limited, fragmented NFT is likely to become a shortcut for NFT whales to transfer risks and accelerate returns.

In addition, there are also analyzes discussing NFT fragments from different perspectives: If the luxury attributes of these high-value NFTs are emphasized, then NFT fragments can be compared to "second-hand luxury goods" and still have the value of collection, trading and circulation, which is not inappropriate.

It can be seen that although there have been NFT fragment projects appearing continuously before, NFD's dog meme pictures have become the easiest way to spread and quickly obtain liquidity in the short term. NFD, which is very colorful with Meme attributes, has further opened the door to the fragmented cognition of NFT to a certain extent.

The positive or negative impact of NFT fragmentation on the market continues. More people are "paying" for these fragments, and the data on the secondary market is still being updated.