An Intelligent Framework for the Management of Fractional Ownership of Digital Assets through Decentralised Autonomous Organisations (DAO)

With blockchain technology, digital asset ownership and governance paradigms have undergone profound changes. Decentralised Autonomous Organisations (DAOs) and fractional non-fungible tokens (F-NFTs) have emerged as pivotal mechanisms for managing shared digital assets that are secure, transparent, and participatory. In many existing F-NFT implementations, initial fractionalisation and trading are emphasised. However, subsequent lifecycle governance, including metadata evolution, share redistribution, and retirement, is handled off-chain or via ad-hoc arrangements, which creates operational and accountability gaps. Therefore, a governance framework based on DAO is proposed for F-NFT management in this paper. A fractionalized asset is governed by rules, quorum thresholds, and life-cycle transitions embedded in smart contracts on the blockchain. These contracts automatically execute token-weighted, proposal-driven outcomes without human intervention. In this paper, ‘intelligence’ refers to rule-based automation and verifiable state transitions encoded in smart contracts, rather than machine-learning-based decision-making. Digital assets are managed through a proposal-driven governance mechanism that decentralises authority, automates decision-making, and maintains transparency. There are three primary categories of proposals embedded in the system: (i) updating metadata to adapt to the underlying digital assets, (ii) redistributing fractional ownership in accordance with evolving stakeholder agreements, and (iii) retiring assets to dissolve ownership and legally distribute value. The DAO enforces ownership rules securely and verifiably through smart contracts and token-based governance, mitigating centralisation and fraud. The study provides empirical insights into the viability of the framework for co-owned digital asset ecosystems by evaluating its operational performance and scalability and discussing the implications for governance effectiveness. Based on our findings, DAO-enabled F-NFTs present an innovative mechanism for collaborative ownership in a transparent, democratic, and tamper-proof blockchain environment. As a result of the paper, a contribution is made to the governance and management of F-NFTs in digital asset ecosystems through presenting the framework conceptually and practically.