Divisible non-fungible tokens (Shared ownership over NFTs)

[devzl]

For our project we are exploring the need to have divisible non-fungible tokens, or in other words, shared ownership over a non-fungible token.

At first we thought about using the ERC-721, but it was illogical to have someone considered as the sole owner of a token when in fact he/she could only have a percentage of that token.

So the idea is that each unique, non-fungible token can be separated to equal, similar, fungible parts.

An example for this idea would be a smart contract that track multiple startups and the equity of their founders. While a startup could have multiple co-founders, none of them could be considered as the sole owner of the startup.

Looking at things backwards, NFTs as they stand now are NFTs with a percentage of ownership locked at 100% (a divisibility of 1).

I wrote a basic quick example of an implementation for this type of tokens. It only contains a mint function and a transfer function that allows an owner to move some parts of a token to another address.

I'm unsure how many real world projects will have this need and if it should become a standard, so your feedback is more than welcome.

Note:
In our case we want the parts to be fungible, but one can think of use cases where there is a need to separate a token like a puzzle of non-fungible parts, that use case is not what we seek in this proposition.

[devzl]

After thinking about it more thoroughly and having a discussion over reddit, I think it will be totally possible to have divisible NFTs while the contract is #721 compliant.

The tradeoff will be to consider the owner who has the biggest % as the "ownerOf()" the token, and if there are multiple owners who have equal shares, we will consider the last one among them who held the largest part of shares. Of course, on the side, we will make a more precise function available that shows the exact share of an owner.

The basic "balanceOf()" function will show how many tokens an owner has shares of, while another new function will show exactly the share of a, if not all the tokens he owns.

For the transfer function, the ERC-721 compliant one will transfer all the shares of an owner, while another one will allow to choose the exact % of shares to transfer.

Now, as to if this use case should become a standard, it will depend largely about how many other projects have the need of shared ownership over NFTs.

[okwme]

Wrote about a few possible use cases for a continuously mintable "Re-Fungible" token owning an NFT here:
https://medium.com/@billyrennekamp/re-fungible-token-rft-297003592769

[Physes]

Nuhanse Network already implementing this concept via a mechanism called quobands. (Public white paper on SSRN attached).

Basically a quoband involves an ERC20 token contract holding ownership over a specified NFT. The largest relative share is the "owner" of the NFT.

https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3107645

[shrugs]

I would expect that this sort of governance should not be part of the token itself, but as a layer on top, which could take many different forms. For example, a multi-sig could be the owner of an NFT, or perhaps it's an Aragon corp or similar using token-based voting.

[aleksa2285]

@shrugs
Your idea definitely makes sense ( especially with multisignature )
I suppose one of the forms for governance would be smart-contract that keeps track of ownership ( in percentages, for example ), but I suppose this scenario requires value of token to be based on ethereum ( which is point, kinda ).
Interesting topic! : )

[jasan-s]

@shrugs can you suggest a guide or provide more details of how to set up joint/fractional ownership of an ERC 721 token by using the methods you mentioned(i.e multi-sig). thanks in advance

[appcast]

@shrugs can you suggest a guide or provide more details of how to set up joint/fractional ownership of an ERC 721 token by using the methods you mentioned(i.e multi-sig). thanks in advance

Any updates on this as curious to make a final determination to stay erc20 or do the erc721 is solution is out for fractional ownership.. If you have any further info, great appreciated.. Thanks,

[okwme]

hi @appcast i'm finishing a new proposal right now, it should be public in the next week if you're interested.

[okwme]

Hi all,
Just opened a request for comment on EIP 1633, Re-Fungible Token.
Would love your thoughts and feedback.

[CryptoKiddies]

Great thought, but should be a layer on top. Anyone can choose to implement their own custom–multi-sig, or ERC20, or what have you–inspired contract to handle divisibility. Or you have can have an ERC721 superset contract or something noncompliant even.

[j-h-scheufen]

Has this design progressed any further than this EIP?
My two cents are that the fungible part of the NFT, the shares, can and should be implemented as an ERC20. This proposal is basically talking about an extension or derivation of the ERC721 to solve the 'single ownership' challenge. The fractional, fungible part that represents shares in the NFT can be implemented as a fixed cap ERC20, so that the shares in the token can be traded on existing exchange infrastructure.

[chrisfranko]

Honestly it would make more sense to make shared ownership an external meta contract.

Someone would transfer the NFT to the ownership contract, then further management could be done by the external ownership contract. But I love the idea.

[epappas]

I think we're all shadowing here a multisig solution, which makes 100% sense (IMOHP too).

But I think there's still space for further discussion when the "share participants" want to sell/collateralize their own share of the NFT. Maybe scenarios like these can be implemented better with EIP-1155, but I can think of many practical use cases (eg properties, Fine Art, marriage, inheritance etc). Ideas?

[chrisfranko]

Agreed

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On Sat, 27 Nov 2021 at 07:39, Evangelos Pappas ***@***.***> wrote: I think we're all shadowing here a multisig solution, which makes 100% sense (IMOHP too). But I think there's still space for further discussion when the "share participants" want to sell/collateralize their own share of the NFT. Maybe scenarios like these can be implemented better with EIP-1155, but I can think of many practical use cases (eg properties, Fine Art, marriage, inheritance etc). Ideas? — You are receiving this because you commented. Reply to this email directly, view it on GitHub <#864 (comment)>, or unsubscribe <https://github.com/notifications/unsubscribe-auth/AA3BBMITEKRTEZIAZ3JKWEDUODGO3ANCNFSM4EOXV7TA> .

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