# Fraction Types

Fractionalization is the process of dividing a digital asset into a collection of tokens, where each member of the collection represents a fraction of the original asset. Considering that assets can be wrapped within ODCs through the use of Nexera Wrapper, ODC fractionalization enables multiple parties to own and trade individual fractions of its underlying assets.

The three main token standards currently employed in ODC fractionalization are:

**ERC20****ERC721****ERC1155**

## ERC20 Fractions

When using the **ERC20 Token standard** for fractionalization, the ODC is divided into equal parts, each represented by a single ERC20 token.
Such fractions, being ERC20 tokens, are **fungible**, thus interchangeable with any other fractions of the same collection.
This characteristic renders them particularly effective for fractionalizing assets that exhibit homogeneity and can be divided into equal portions, examples of which include company shares and real estate holdings.

The implementation token contract for issuing ERC20 fractions is denoted as ERC20MinterGovernedChoice.

## ERC721 Fractions

When using the **ERC721 Token standard** for fractionalization, the ODC is divided into unique parts, each represented by an individual ID of the ERC721 fraction token collection.
These fractions are **non-fungible**, signifying their uniqueness and the potential for distinct values compared to other fractions within the same collection.
This characteristic renders them particularly effective for fractionalizing assets that are heterogeneous and cannot be easily divided into equal parts, such as rare art pieces or collectibles.

The implementation token contract for issuing ERC721 fractions is denoted as ERC721Minter.

## ERC1155 Fractions

When using the **ERC1155 Token standard** for fractionalization, the ODC is divided into parts that can be either **fungible** or **non-fungible**, depending on the total supply of fractions created.
This characteristic renders ERC1155 fractions particularly useful for fractionalizing assets that have both homogeneous and heterogeneous elements.
For example, a collection of rare art pieces might be fractionalized using non-fungible ERC1155 tokens, while a pool of investment funds might be fractionalized using fungible ERC1155 tokens.

The implementation token contract for issuing ERC1155 fractions is denoted as ERC115MinterGovernedChoice.

### Important Note

The choice of which token standard to use for fractionalization depends on the nature of the asset being fractionalized.
If the asset is homogeneous and can be easily divided into equal parts, **ERC20** may be the best choice.
If the asset is heterogeneous and unique, **ERC721** may be the best choice.
If the asset has both homogeneous and heterogeneous elements, **ERC1155** may be the best choice.