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Fractionalized NFTs Get Funding Boost as SZNS Raises $4M From Framework, Dragonfly

As PleasrDAO and Paperclip grab headlines, a new service is aiming to popularize DAO-governed NFT collecting and investing.

Sep 9, 2021 at 6:05 p.m. UTC
Updated Sep 10, 2021 at 6:06 p.m. UTC

Following the success of non-fungible token (NFT) trading collectives like PleasrDAO and Paperclip, a new platform is aiming to make governing, fractionalizing and collateralizing digital art easier.

In a blog post Thursday, SZNS (pronounced “seasons”) announced a $4 million funding round led by Framework Ventures and Dragonfly Capital, with contributions from Pear.vc and Baller ventures, among others.

SZNS allows users to create “albums,” or collections of NFTs, that can be fractionalized as governance tokens and managed by a decentralized autonomous organization (DAO). (Roughly speaking, DAOs are internet communities with a shared checkbook.)

There are a swath of fractionalization services currently on the market, including NFTX and Fractional, but according to SZNS founder John Bisu, the new platform is aiming to expand functionality.

“There’s a limitation on what users can do with their fractionalized tokens,” Bisu said in an interview with CoinDesk. “It’s very buyout-based, where the only option for them is to buy out the NFT.”

He said that giving users access to the upside of non-fungible assets is a “very noble” thing; SZNS is aiming for a more fluid vault model that allows for easy entry and exit of assets based on governance decisions.

In July, PleasrDAO used four NFTs to obtain a $3.5 million loan from decentralized finance (DeFi) platform CREAM Finance’s Iron Bank; as the platform develops, SZNS albums could also be used to collateralize NFTs and vote to use funds in the DeFi ecosystem.

Album governance tokens will function as a fungible proxy for the NFTs in the album vaults, and will be listed on decentralized exchanges such as SushiSwap. Sushi core contributor 0xMaki is an adviser to the project.

The platform is aiming to launch in early October with a series of preset albums focusing on certain NFT projects, including CryptoPunks and Meebits.

SZNS is also planning to release a native token, SZNS. Album DAOs will have the option to deposit 1% of governance tokens into the SZNS treasury in exchange for liquidity provision and dispute resolution management, effectively leading to SZNS functioning as a NFT index token over time.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Andrew Thurman is a tech reporter at CoinDesk with a focus on DeFi.

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