Non Fungible Tokens (NFTs) have gained a lot of ground this year and expanded their market massively. This particular category features an extensive catalogue and contains including but not limited to arts, collectibles, tickets, game items, monetized time and skills, domain names, ownership records etc. Presently, the things of value are mostly found in the NFT subcategories of arts and collectibles. However, investors are faced with the herculean tasks of finding valuable NFTs, determining their authenticity and acquiring them (plus dealing with their rather “illiquid” nature. Enter NFTX.
NFTX is a NFT management platform and index fund, backed by the underlying NFTs and ETH tokens in it’s treasury. It’s platform allows users to generate ERC-20 tokens and create funds, backed by governance selected significant arts/collectible individual pieces (D1 funds) e.g Bacio Kinkynose Crypto kitty, further wrappable by combining multiple D1 NFT tokens from the same general asset class (D2) e.g Gen 15 Crypto Kitties. Further, it’s a governance token which gives holders right to determine the future direction of the project.
These funds can finally be redeemed for (at specified or traded against the primary token NFTX which has potential market demand, turning illiquid NFTs into a liquid ones, tradable on decentralized exchanges such as Uniswap. It has the potential of bringing NFTs into the DeFi mainstream, by granting them the standardness, liquidity and composability. The three things which are the cornerstone of Decentralized Finance (DeFi). NFTX can grant NFTs the power to be used directly with the DeFi services.
For instance, the value of the underlying NFTs can be typically used for issuance of stablecoins, borrowing, lending, being used as collateral, for insurance etc. in the future, by integrating NFTX directly with these services. In the long, it might even become the benchmark for NFT index funds, a vastly open field at this point. The NFTX token will be made available on Uniswap after Jan 05, 2021. However, there are currently two ways of acquiring NFTX.
First and the easy one is by providing ETH tokens. Only the last tier is remaining now, the first two tiers were filled in the first hour of the community raise launched on 22 Dec, showing the demand for a NFT index fund. The rate is around 1 ETH = 43.3 NFTX which is likely to be exceeded significantly, once general trading opens after the new year.
Second one and a little complex, is by providing specific NFTs as noted in the interface and redeeming them for NFTX tokens, at a fixed weightage. These currently include CryptoKitties, CryptoPunks, Axies, Glyphs, Joys and Avastrs. Owing to the popularity of the platform, most of the categories are filled for now, but the caps are soon to be removed, for addition of more NFT assets. The list will include new additions and asset classes, as soon as the governance is live and votes on additions.
For investors looking to get 1-Click exposure to the NFTs with minimal effort or for DeFi enthusiast looking to involve themselves further with NFTs, the project is a no-brainer. It’s an abstraction of the otherwise intensive and arduous work that goes into researching, buying and managing NFTs. NFTX has the potential of becoming the next premier NFT project and a robust index fund.
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Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.
Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future.
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