Fracton Protocol is an innovative decentralized protocol designed to solve the liquidity problem in the NFT market by fractionalizing illiquid NFTs into fungible ERC-20 tokens. Its flagship product HiBAYC represents 1/1,000,000 of a Bored Ape Yacht Club (BAYC), and users can redeem underlying BAYC NFTs at any time through the on-chain BAYC Meta-swap pool operated by Fracton Protocol. This mechanism allows NFT holders to partially exit their positions without selling the entire asset, while also lowering the entry barrier for retail investors to participate in blue-chip NFTs.
How HiBAYC Works and Its Supply Mechanism
The circulating supply of HiBAYC equals its total supply and is dynamically adjusted based on the actual amount of BAYC locked in the BAYC Meta-swap pool. When a user deposits a BAYC into the pool, the protocol mints an equivalent amount of HiBAYC. Conversely, destroying HiBAYC redeems the corresponding BAYC. This ensures that each HiBAYC is always fully backed by a corresponding BAYC, eliminating the risk of over-minting. Currently, the fractionalization ratio is set at 1:1,000,000, meaning one BAYC can be fractionalized into one million HiBAYC tokens.
FT Tokenomics and Market Data
The native governance token of Fracton Protocol, FT (Fracton Token), is responsible for governance, fee distribution, and other core functions. According to the latest data, FT reached an all-time high (ATH) of $7, and its current price has retraced from that peak. As of May 25, 2026, the circulating supply of FT stands at 87,472,220 tokens, with a maximum supply capped at 100,000,000 tokens. This allocation suggests that approximately 12.5% of tokens are reserved for future incentives or ecosystem development, indicating a relatively scarce supply model.
Storage and Security Recommendations
Users can store FT tokens through various methods. For beginners, the custodial wallet provided by centralized exchanges (e.g., KuCoin) offers a convenient way to manage tokens without worrying about private keys. More security-conscious users may opt for self-custody wallets (such as MetaMask, Trust Wallet), hardware wallets (e.g., Ledger, Trezor), third-party crypto custody services, or paper wallets. Each storage option has its trade-offs in terms of convenience, security, and control; users should choose based on their asset size and risk tolerance.
Market Outlook and Challenges
The NFT fractionalization sector has been highly anticipated, and Fracton Protocol stands out as a pioneer with its on-chain instant redemption mechanism that addresses the liquidity discount issue seen in other fractionalization protocols. However, the space still faces challenges including regulatory uncertainty, smart contract risks, and fluctuating market demand. The price performance of FT will heavily depend on the liquidity demand for underlying blue-chip NFTs like BAYC, as well as the ecosystem expansion of Fracton Protocol itself. At present, HiBAYC's secondary market liquidity remains relatively limited. If Fracton can integrate more NFT collections into its Meta-swap pool or launch cross-chain fractionalization services, it could significantly enhance FT's utility and market attention.