Tessera, a protocol that enables collective ownership and governance of non-fungible tokens (NFTs), is winding down its operations over the next few weeks, co-founder Andy Chorlian tweeted on Friday.
Chorlian, who co-founded the company alongside Nejc Krajnik in 2021, said that the decision was made after “carefully analyzing possible market scenarios, our company structure and our financial situation.”
Curated digital fine art marketplace Escher, one of the projects in the Tessera portfolio, will also be shutting down, Chorlian tweeted.
“As we really dug into the economic model for Escher, we saw that the targets we needed to hit to attain profitability – compared to the time and resource costs to scale there – just didn’t add up or make good business sense,” he wrote.
Other Tessera projects include Nounlets, a fractional ownership platform for Nouns NFTs, and We Do a Little, a podcast hosted by Chorlian and NFT influencer Deeze.
The news of Tessera’s shutdown comes just under a year after it rebranded from its original name Fractional and announced a $20 million funding round led by crypto investment giant Paradigm. Other investors in the Series A funding round included Focus Labs, Uniswap Labs Ventures, eGirl Capital and Yunt Capital.
Fractionalizing NFTs involves creating fungible tokens tied to an underlying digital asset, like a Bored Ape or CryptoPunk. The NFT is often locked away in a vault, and fractional tokens can be traded on secondary marketplaces.
As the NFT market continues to struggle through an extended crypto winter, marketplaces have embraced ways to allow users to invest in digital collectibles with smaller upfront costs. Earlier this month, popular NFT marketplace Blur launched a peer-to-peer lending network called Blend, which allows traders to put up a percentage of the NFT’s price upfront and finance the remaining balance. NFTX, another fractionalizing platform, allows traders to pool NFTs of equal value into index funds and mint fungible ERC-20 tokens tied to underlying NFTs (ERC-721 tokens), creating increased liquidity.
Last month, the U.S. Department of Justice revealed that Chorlian, along with four other individuals, had been charged for allegedly participating in a securities manipulation scheme.
Credit: Source link