Martingale Shares for Fractional NFT Exposure

Summary

The document proposes Martingale shares, called Mortys, as a way to create tradable fractional exposure to a class of NFTs. A vault owner deposits an NFT and sells shares representing part of the claim. At regular intervals, a random settlement process transfers shares between the owner and a buy pool. Settlement continues until the owner’s balance reaches zero or returns to its starting level, determining whether the NFT goes to the pool or back to the owner. Because the process is designed as a fair Martingale, the owner’s expected share balance stays constant, and the initial fraction sold corresponds to the stated probability of recovering the NFT.

The proposal aims to address liquidity and pricing problems associated with NFT buyouts, while avoiding an oracle for valuing the asset. Shares represent the floor NFT in a defined class, rather than ownership of one specific item, and owners can replace collateral or buy shares to improve recovery odds. The paper also sketches alternate settlement rules. It is a speculative protocol design: its fairness depends on the settlement assumptions, and the document gives no market evidence that Mortys would attract liquidity or work in practice.

Key ideas

• Mortys are fungible tokens intended to provide fractional exposure to a defined NFT class.
• A vault’s share balance changes through random settlement until it reaches an endpoint that determines NFT ownership.
• Under the proposed fair process, the owner’s expected balance remains unchanged during settlement.
• Class-based collateral and replacement rights let a vault represent the cheapest eligible NFT rather than one specific item.
• The concept is theoretical and the document does not establish market demand or practical performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.