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Nexera Fractionalizer
Overview
Fractionalizer Architecture

Fractionalizer Architecture

Fractionalization Overview

The Nexera Fractionalizer is a tool within the Nexera Ecosystem designed to dissect On-Chain Data Containers (ODCs) into a collection of interconnected assets known as fractions. Associated fractions maintain the integrity and coherence of the original ODC and are selectively issued as ERC-20, ERC-721, or ERC-1155 tokens, providing tailored flexibility for specific requirements and use cases. While these are the currently supported types, the Fractionalizer's inherent flexibility enables seamless integration with any other ERC token standards, whether existing or future. The fully tradeable nature of fractions not only enhances the accessibility of the original ODC but also holds the potential to boost its liquidity significantly.

The fractionalization process for an On-Chain Data Container (ODC) initiates with the deployment of a customized Fraction Token contract. This contract, extending either ERC20, ERC721, or ERC1155, provides the ODC owner the flexibility to choose the fraction type, quantity, and unique identifiers (if applicable) for minting. Following this, the ODC is securely locked – either within a designated Keeper contract for ERC1155 fractions or within the associated Fraction Token contract for ERC20 and ERC721 fractions. You can read more about the Fraction Types here.

Unlocking the ODC is contingent upon the comprehensive burning or redemption of all associated fractions, ensuring a transparent and controlled tokenization procedure. As the cumulative sum of these fractions inherently represents the original ODC, functioning as shares of its underlying assets, a Governance mechanism is also integrated. This mechanism enables the appointment of a designated entity, referred to as the Governor, empowered to initiate on-chain actions from the associated Fraction Token or Keeper contract. For a detailed breakdown of the Governance mechanism and its functionalities, please refer to the following page.





Integral Components

To facilitate fractionalization, the Fractionalizer module employs a suite of essential and supporting components. In order to grasp the mechanics of this process, let's delve into the explanation of its foundational contracts:

Fractionalizers

Fractionalizers act as the primary gateways for fractionalizing On-Chain Data Containers (ODCs), streamlining the process based on the desired fraction type. Three dedicated implementations correspond to each supported ERC standard:

For example, ERC20FractionType facilitates the fractionalization of ODCs into ERC20 tokens through its interface.
The createNewERC20Fractions function triggers a comprehensive procedure, encompassing the deployment of the associated Fraction ERC20 Token contract. It ensures the secure transfer of the ODC from its owner to the created Fraction Token contract and the configuration of the designated Governor. Finally, the minting of fractions occurs based on the owner's preferences, providing control over the minted amount and the choice of the designated Governor.

Fraction Tokens

Specially tailored for each supported ERC token standard (ERC20, ERC721, ERC1155), the Fraction Token contracts include:

These contracts serve as the implementation blueprints, with a new instance deployed for each fractionalized On-Chain Data Container (ODC) corresponding to the desired fraction type. Upon fractionalization, such instances serve as the token contract, issuing the respective type of fractions. For example, when an ODC is fractionalized into ERC20 tokens, a new ERC20MinterGovernedChoice instance is deployed, issuing ERC20 fractions to the owner of the fractionalized ODC.

Governors

Governors play a crucial role in overseeing Fraction Token contract instances, holding the exclusive authority to initiate on-chain actions. During the creation of a Fraction Token contract instance in the fractionalization process, a specific address can be appointed as its Governor. ODC owners have the flexibility to choose an external address, such as a multisig wallet or another contract, for Governance-only, or opt for Nexera's custom Governance solutions extending with a dedicated Voting mechanism. Nexera provides custom Governance-Voting solutions
for ERC20 and ERC1155 fractions:

Notably, ERC721 fractions exclusively support the Governance-only feature, recognizing the unique challenges posed by non-fungible fractions in quantifying voting power.

Choosing Nexera's custom Governance ensures that all fraction owners have a say in how the fractionalized ODC is managed, and that the system functions democratically, empowering stakeholders to propose on-chain actions and cast votes (leveraging fraction balances as tangible voting power) for or against such proposals.

For a detailed breakdown of the Governance mechanism and its extensions, please refer to the following page.

Keepers

The Keeper is a specialized contract dedicated to locking an On-Chain Data Container (ODC) during ERC1155 fractionalization. When a new ERC1155 Fraction Token contract is created, a corresponding Keeper instance is deployed and associated with the ID of the fractions. Additionally, issuing new ERC1155 fractions from an existing contract (ID > 1) triggers the creation of a new associated Keeper instance. Thus, each ODC fractionalization as ERC1155 fractions results in a dedicated Keeper instance which is associated with the respective Fraction token contract and the ID of the fractions. Notably, each Keeper has the same designated Governor as its associated fractions.

Nexera FractionalizerFraction Types