2.2 Asset Minting and Fractionalization

The initial minting event serves both as a cryptographic commitment to the asset’s verified status and as a gateway to programmable capital markets. Minted NFTs include structured metadata conforming to Parax’s on-chain registry standard, which encodes origin, valuation bracket, validator attestations, and custody proof.

Fractionalization is performed via a smart contract module that wraps the parent ERC-721 token in a vault contract and issues corresponding ERC-20 shares. These tokens are deployed into the Parax marketplace, where liquidity pools and auction mechanisms allow price discovery and investor participation. Fractional holders maintain economic rights proportional to their stake, while ownership control and physical redemption remain governed by the NFT’s integrity and associated rules.

By decoupling the physical asset from its economic value through token wrapping, Parax enables fluid participation without physical transference, while preserving the option of redemption and reassembly when necessary.