What Is NFTX (NFTX)?
NFTX is a community-owned protocol and platform for creating non-fungible token (NFT)-backed ERC-20 tokens. Notably, NFTX powers the creation and trading of funds, tracking sought-after NFT collectibles such as CryptoKitties, CypherPunks and others.
NFTX was launched in early January 2021 to provide an essential new service to the booming NFT sector through indexing of projects. Although these tokens represent index funds, they’re composable and fungible, which means they are interchangeable for other tokens, which distinguishes them from standard NFT protocols. These “funds” are actively traded on decentralized exchanges (DEXs) such as Sushiswap and Uniswap.
The platform’s unique value proposition is to bring NFTs to light to high-level individuals trading funds based on leading non-fungible tokens like PUNK and AXIE on Uniswap and other DEXs.
Who Are the Founders of NFTX?
NFTX is a community-controlled platform that allows users to place index funds on the Ethereum blockchain. Therefore, the project’s governance depends on a decentralized autonomous organization (DAO).
However, to prevent monopoly during decision-making, a proposal targeting new changes needs to garner support from 80% of all voting tokens. Note that the voting period lasts for 24 hours.
What Makes NFTX Unique?
The main business case for the project is to bridge the gap between decentralized finance (DeFi) and NFTs. The NFTX platform supports two types of funds, D1 and D2 funds:
D1 funds have a 1:1 ratio backing involving an NFT and an Ethereum-based ERC20 contract.
For example: say Alice owns 1 ZOMBIE-FEMALE, this allows her to redeem precisely 1 Zombie Female at random.
On the other hand, D2 funds, also called top-level funds, are Balancer pools that make up a combination of D1 funds.
To illustrate: The D2 fund AVASTR makes up a combination of 3 D1 Avastar funds AVASTR-BASIC, AVASTR-RANK-30 and AVASTR-RANK-60 to give users diversified exposure to AVASTR without the need to hold and manage multiple tokens.
Arguably, NFTX seeks to replicate indexes like DefiPulse or CoinMarketCap, but with an NFT twist.
As the defacto wrapped-NFT funds issuer, the platform expands its use case to include the representation of items like digital lottery tickets, in-game items, digital collectibles in the form of NFTs. However, the services come with a price tag. NFTX charges a fee of 2.5% on the burn and mint operations.
NFTX seeks growth through offering NFT-ERC-20 loans and on-chain liquidity. For the loans, NFT holders don’t have to relinquish ownership, while on-chain liquidity helps curb illiquidity and wash trading.
Learn more about NFTX Hashmasks Index (MASK).
Learn more about Name Changing Token (NCT).
Learn more about NFTLootBox (LOOT).
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How Many NFTX (NFTX) Coins Are There in Circulation?
NFTX’s total supply stands at 650,000, with 10% of the token distribution allocated to the founder, while NFT contributions account for 30%. Ethereum (ETH) contributions, NFTX liquidity, and farming account for 30%, 10% and 20%, respectively. Note that funds allocated to the founder have a five-year vesting period.
Furthermore, token holders have a right to contribute to the decision-making process.
How Is the NFTX Network Secured?
Since the platform is built on the Ethereum blockchain, its security relies on the second-largest blockchain network after Bitcoin. Notably, NFTX uses the safety of the Ethereum-side, which is currently powered by both proof-of-stake (PoS) and proof-of-work (PoW) consensus mechanisms.
Note that the protocol’s native asset, NFTX, leverages Ethereum’s ERC-20 token standards, one of the first token standards in the space. Consequently, it provides diverse and battle-tested security measures.
Where Can You Buy NFTX (NFTX)?
The NFTX token is available on both centralized exchanges and DEXs such as Uniswap, 1inch, and Hotbit. On Uniswap, it’s paired with wrapped Ethereum (WETH) while traders on 1inch choose between Ethereum (ETH), Tether (USDT), and yearn.finance token (YFI). Hotbit only has one pair, NFTX/USDT. For more details on purchasing cryptocurrencies, click here.