Record Doge NFT Sale Highlights Growing Demand for Fractionalization

Group ownership of NFTs is rising, but critics question whether the trend will last.

AccessTimeIconSep 2, 2021 at 6:49 p.m. UTC
Updated May 11, 2023 at 3:38 p.m. UTC

Just three months after a non-fungible token (NFT) representing an image of the original Shiba Inu dogecoin meme sold for about $4 million, the NFT is now valued at more than $225 million after part of its ownership sold for over 11,000 ether.

Investors were able to boost the price of the doge NFT to a record high for NFTs in such a short time by fractionalizing it into nearly 17 billion tokens named DOG with 20% of the supply for sale via a 24-hour auction ended Thursday.

The event reflects investors’ rapidly growing demand for fractionalized ownership of NFTs, a new, easier way to participate in the increasingly pricey and volatile NFT market. The trend has been rising in recent months, although critics have questioned potential risks around this NFT innovation.

In fractionalization, the NFT owner deposits the NFT into a vault on one of the NFT fractionalization platforms, which allows them to mint ERC-20 tokens. The NFT owner also determines the total supply of the minted ERC-20 tokens. Unlike NFTs, which usually apply Ethereum’s ERC-721 token standard, the ERC-20 tokens are fungible and can be traded, sent and received on smart contracts running on the Ethereum blockchain.

NFT fractionalization “gives wider access to [the] community, and can help make NFTs productive assets,” Delphi Digital co-founder and Chief Operating Officer Anil Lulla said.

PleasrDAO, a group of investors who bought the doge NFT in June for 1,696 ether (about $4 million at the time), auctioned 20% – nearly 3.4 million DOG tokens – of the total $DOG supply on the decentralized fundraising platform Miso. The group fractionalized the doge NFT through a platform called Fractional Art. PleasrDAO still retains majority ownership of $DOG.

The investors behind the DAO, or decentralized autonomous organization, include high-powered venture capitalists Su Zhu of Three Arrows Capital, Dragonfly’s Tom Schmidt and Compound’s Robert Leshner.

Fractionalized NFTs have sold at staggeringly high prices before. Another doge meme-related NFT sold for more than $86 million in late August after it was fractionalized into tokens called feisty doge NFT (NFD).

“I am really excited to see more work done on community ownership of internet culture and history,” Andy Chorlian, founder of Fractional Art, told CoinDesk. Fractional Art facilitated the fractionalization of both NFTs associated with doge, and the platform is backed by Paradigm, Delphi Digital and other investors.

While the NFT market has boomed this year, with sales hovering over 50,000 per week, sale prices have dropped 60% since early August, according to, and some observers have even suggested the NFT phenomenon is a bubble.

Even after selling his NFT “Everydays: The First 5000 Days” for $69 million earlier this year, artist Mike Winkelmann, better known as Beeple, called the market “extremely speculative.” “This is for people who are looking to take some risks because a lot of this stuff will absolutely go to zero,” he told The New York Times.

NFT fractionalization aims to reduce the risks around NFT pricing.

“Imagine if an individual wanted to get a loan based on the value of their CryptoPunk. You need to find a buyer and whoever provides you the loan is going to charge you some premium based on the risk associated with the fact that they might not be able to sell it very quickly,” Mason Nystrom, research analyst at Messari, explained. “Now, in an ideal world where Punks were fractionalized and therefore had greater access to buyers, then the risk to the person giving the loan would be less and the premium paid by the Punk owner would also be less.”

But like all innovations, fractional ownership of NFTs also has risks and has faced criticism, particularly the technology, which is still in its early stage.

By locking an NFT in a vault, the NFT fractionalization issuer has to bear the risk of potential hacks on smart contacts, said Dragos Dunica, co-founder of NFT data site DappRadar.

However, the fractionalization issuer often maintains the majority ownership of the NFT, which means the minority owners need to be aware of potential “pump and dump” schemes.

When the Feisty doge was fractionalized and sold in August, some NFT market observers called it a “scam.” Blockchain data suggested the initial owner of the Feisty doge NFT work removed liquidity from the NFD/ETH trading pair.

“You’re about to see EVERYTHING fractionalized and repackaged as an ERC-20 token that’s suddenly not a s**tcoin,” Twitter user @0xShual, who discovered the problem of the fractionalized Feisty doge NFT, tweeted dryly.


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Muyao Shen

Muyao was a markets reporter at CoinDesk.

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