Collective NFT Ownership Protocol Fractional Raises $20M and Rebrands as Tessera
Fractional, a protocol that allows collective ownership of non-fungible tokens, announced on Wednesday that it is changing to Tessera and also revealed that it raised $20 million in early funding led by Paradigm.
The Series A funding was raised earlier this summer and included investments from Focus Labs, Uniswap Labs Ventures, eGirl Capital, Yunt Capital and over 50 angel investors.
Non-fungible tokens, or NFTs, represent the ownership of digital objects such as artwork, music, files or other virtual assets using blockchain technology. Some of the world’s most sought-after artwork NFTs have reached hundreds of thousands or millions of dollars in value, putting them right out of the market for most people.
The vision of Fractional, now Tessera, is that while NFTs are unique and one-of-a-kind by design, fractional ownership will allow multiple people to purchase parts of that token as property, similar to owning stocks, and have it split into their own tradable tokens.
A “tessera” is a small tile or block of stone used to construct a mosaic, a reference to the fractionalization that the company does for NFTs.
By fractionating a larger, more expensive NFT, large investors can create liquidity in an expensive digital asset that can be extremely difficult to sell. After all, in the market there are very few people with $100,000 or more who can buy a single item, but split it into 100,000 tokens and put them on the market for $1 each and they can rise in value.
The platform has been used to fractionalize some well-known high-profile projects, including the internet-famous original Doge meme image NFT purchased by PleasrDAO for $4 million. A DAO is a type of decentralized organization where the individual members can vote on governance and choose what the organization does.
The organization decided to fractionalize the Doge NFT, which it was then able to sell nearly 17 million DOG tokens, making it worth nearly $336 million in September. Although now the total market value of tokens is around $10 million.
Tessera has also been used by the UkraineDAO to raise over $6 million in aid by fractionalizing an NFT of the flag of Ukraine. The prominent project Azuki, with its generative anime-inspired art, also used Tessera to fractionalize ownership in its NFTs.
“NFTs are transforming how people interact, build communities and view governance, so we are transforming too – from a simple smart contract to full-fledged NFT infrastructure to support the future of collective ownership,” the Tessera team wrote in the announcement.
The Tessera team intends to use the new funds to build a new version of the protocol that will allow the platform to fractionalize NFTs into NFTs instead of fungible tokens as it does now. The company also intends to expand its current team of 24 people with more developers and engineers.
