Gas Cost Analysis of Fractional NFT on the Ethereum Blockchain
Won Seok Choi, Jongsoo Woo, James Won‐Ki Hong
Abstract
With the rise of NFTs, which serve as proof of ownership for assets, security tokens that enable transactions without intermediaries have become a popular topic. Tokenization eliminates the need for centralized markets and allows for fast trades. In addition to tokenization, there are attempts to increase asset liquidity by fractionalizing them, a concept known as fractional ownership. Despite the existence of some platforms that use tokenization and fractional ownership, there is still limited research on fractional NFTs, and institutional support is lacking. In this paper, we propose possible implementations of fractional NFTs and evaluate their gas costs, which are crucial for providing fractional NFT-related services. As most NFTs are minted based on the Ethereum blockchain, we implement fractional NFTs using ERC standards. Our evaluation shows that ERC-721 or ERC-1155 NFTs fractionalized into ERC-20 FTs have the lowest long-term gas costs.