6.2 ERC-20 Fractional Wrapping


To facilitate liquidity and fractional ownership, Parax employs a wrapper mechanism that fractionalizes the ERC-721 token into ERC-20 fungible tokens. This process enables an asset’s division into arbitrary shares, which can be traded independently within the Parax marketplace or integrated into broader DeFi protocols. Fractionalization contracts enforce strict lock-up of the underlying ERC-721 asset during the lifecycle of the ERC-20 tokens to prevent double-spending or fraudulent redemption. This dual-token architecture balances the uniqueness of real-world assets with the flexibility demanded by capital markets.