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, Author: Crypto Briefing, Encrypted Asset Research Institution, Translation: Leo Young, published with permission.

Introduction

NFTX is a non-homogeneous token index fund protocol. NFTX brought liquidity to the low-liquidity NFT market, immediately found a market fit and gained widespread attention.

If NFTX is successful, NFTX collectors can benefit from hard-to-price assets, and investors can better participate in the market growth in the NFT field without having to pick a single collection.

Introduction

The trading volume of the non-fungible token market has repeatedly hit records. In the past 30 days, the total amount of NFT sales reached about 400 million US dollars, reaching a new high in the market. Despite impressive growth, this is also an emerging market, with total NFT transaction volume accounting for only 0.1% of Ethereum transaction volume.

Institutions and celebrities such as the NBA, Kings of Leon, Soulja Boy, etc. have issued their own NFTs to monetize the fan economy, earning millions of dollars from these digital collectibles. These celebrities bring new users to the market. None of these users had ever participated in the cryptocurrency market.

Taking a closer look at the NFT market in the past year, we believe that the market has just reached a turning point.

While there are many opportunities in this field, it is also fraught with risks. Investing in digital collections also has many disadvantages, such as high gas fees, low threshold for casting new collections, and poor market liquidity, which makes it unwise to invest in NFT.

Among these problems, mobility is the biggest obstacle. Collectors buy expensive collections and take the risk that they may never be resold.

Projects that can solve such problems will bring great value to the market. The pioneer NFTX precisely solved this problem.

NFTX is a platform for minting ERC-20 tokens backed by NFT collections. Index funds on which the tokens minted represent popular holdings such as

If you want to get in touch with Hashmask NFT but do not have the relevant expertise to appreciate the content, you can choose to buy MASK index at NFTX.

All in all, the concept behind the project is simple and sound. Adding liquidity to the NFT market captures a lot of market value. Aspects of the project, such as token supply and roadmap, also met our other selection criteria.

Based on these elements, NFTX is our top pick for March.

The NFT market has unlimited prospects

Before understanding the NFTX platform in detail, it is very important to understand the NFT market development and market expectations.

According to DappRadar data, the NFT field developed strongly in February, and NFT sales reached a new high. In addition, a small number of NFTs are sold at sky-high prices, indicating that they are either widely accepted or short-term bubbles.

NFTs that sell for over $200,000

The popularity of the NFT market has doubled. An NFT of Banksy's burnt work was sold for $380,000 in ETH. Numerous celebrities are also minting NFTs.

As mentioned above, even in the cryptocurrency space this is a bit overheated, but the NFT market is still a niche market with huge room for growth. According to NonFungible data, only 222,000 wallets interact with NFT smart contracts in 2020, which is not enough for 30% of the number of active addresses in Ethereum.

NFT indicator source: nonfungible.com

As the NFT market becomes more and more popular, more natives of cryptocurrency will join this ecosystem. Plus, these celebrities and artists bring in new users who have never been exposed to the cryptocurrency industry.

The global art market is valued at 67 billion US dollars, and the global collection market is valued at 360 billion US dollars. In comparison, the current NFT market is just a drop in the bucket. There will be more demand growth in this market.

Create an NFT fund to solve liquidity

Trading ERC-20 tokens rarely has liquidity issues. For example, buying and selling ETH, each token is worth the same. Each token is interchangeable, just like legal currency, ten dollars is ten dollars.

Non-fungible tokens are different. They represent unique item ownership in the world and are presented on the blockchain in the form of information. NFTs have no similarities.

The application of NFT includes many artistic mediums. It can be pictures, or complex video and audio, all of which are stored on the blockchain.

With a popular peer-to-peer NFT marketplace (currently dominated by OpenSea and Rarible by market share), anyone can create their own NFTs to sell on the marketplace.

The most popular NFT works should come from social experts with many fans.

"Blue chips" such as AXIE, PUNK, and KITTY have already appeared in the NFT market. These are some of the most popular collectibles among NFT collectors.

• Some people want to enter the NFT market, but do not have the time or patience to trade a single NFT work, NFTX is to meet the needs of these users. This solves the liquidity problem of less popular NFTs, giving less professional investors access to the most popular collectibles.

• This also makes NFTX the most popular investment asset in the NFT field, especially for users who don't want to delve into individual NFT works.

It is easier to buy funds in NFTX. There are currently two types of funds:

D1 Fund: ERC-20 tokens are minted 1:1 with a single NFT contract.

D2 funds: Multiple D1 funds are mixed in the Balancer fund pool.

Working principle of D1 fund: Zhang San has three Hashmask works, deposit them in MASK D1 fund, and get MASK tokens. These tokens can be traded on Sushiswap for better liquidity.

When Zhang San deposited the Hashmask into the D1 fund, he gave up his ownership of the Hashmask, but thus released the liquidity of these Hashmasks.

Of course, if everyone likes Zhang San's Hashmask, it might not be a good idea to put it in the D1 fund, because selling it in OpenSea may earn more money. For other less valuable Hashmasks, depositing in the D1 fund will bring good liquidity to these assets.

But these index funds have a downside. The D1 fund does not reflect the value of all Hashmasks in proportion, but comprehensively reflects the average price of all Hashmasks. This makes the NFT component of the fund less popular.

The D2 Fund mechanism is similar. The main purpose is to allow users to invest in comprehensive value without holding multiple tokens.

medium and long term goals

Currently NFTX has 22 funds. Mainly D1 funds, only one D2 fund. Most popular NFTs on the market can issue index funds on NFTX, such as CryptoPunks, CryptoKitties, Axie Infinity, Hashmask.

The ultimate goal of NFTX is to become Binance in the NFT world by aggregating market liquidity. This will make the NFTX token the only index of all NFTs in the market.

Currently the only function of NFTX tokens is platform governance. NFTX token holders have the right to vote on NFTX smart contract changes. Likewise, holding governance tokens is similar to holding voting rights in a public company.

The platform currently does not charge any fund management fees. But in the future, as the platform grows, adding fees can bring benefits to token holders.

• It should be noted that the platform was only a few months old. Initial free will make it easier for users to accept.

• The team also plans to introduce more features in the future. Several plans on the roadmap are as follows:

risk

NFT – ERC-20 Token Loans. Users can mortgage NFT to obtain loans (similar to minting Dai with ETH). This feature allows owners to unlock the value of NFTs without giving up their tokens.

Blind boxes and gift cards. The team plans to launch an NFT blind box. This opens up a variety of possibilities, functionally similar to the popular gameplay of games like Fortnite, World Cup Soccer, and Counter Terrorist Force.risk》

Translator's Note: A vulnerability was discovered in NFTX the day before yesterday. See "

in conclusion

NFTX Proposes $50,000 in ETH to Security Researcher Samczsun as a Bug Bounty

There are also risks in the NFT space as a whole. Although the market is trending upwards, there may be a short-term bubble. Some have compared the overheating of the NFT market to the ICO boom. At that time, if you participated, you knew that 99% of the fundraising companies were dead. If the NFT price falls, this will directly affect the NFT token price as well.

in conclusion

As mentioned above, NFTX is ideal for all standards.

First, the project is in a fast-growing segment in a fast-growing market. In short, the potential is huge. The NFT craze is just the beginning, and as the Bitcoin bull run continues, NFT prices are likely to continue to climb.

Secondly, the project has already formed products, which can solve the pain points of users. Liquidity is a big problem in the NFT market. Bringing liquidity to the market can bring great value to users. Value can be converted into platform revenue.