NFTX

NFTX is a protocol platform creating liquid markets for illiquid Non-Fungible Tokens (NFTs). The company's platform allows the creation and trading of funds that are composable and fungible, which means they are interchangeable for other tokens, and tracking sought-after NFT collectibles such as CypherPunks, CryptoKitties, and others, enablingcustomers to actively trade funds on decentralized exchanges (DEXs) such as Sushiswap and Uniswap.

NFTX (NFTX) - protocol for NFT-backed index funds

NFTX is a platform for creating ERC20 tokens backed by NFT collectibles. These tokens are called funds and (like all ERC20s) are fungible and composable. With NFTX, you can create and trade funds based on your favorite collectibles like CryptoPunks, Axies, CryptoKitties and Avastars directly from DEXs like Uniswap.

1. D1 funds (input) have 1:1 support between one NFT contract and an ERC20 contract. For example, if Alice owns 2 PUNK-ZOMBIEs, this means that she can redeem exactly two random PUNK-ZOMBIEs at any time. Another example would be Alice owning 1 AXIE-MYSTIC-2, which gives her the ability to redeem one random AXIE with 2 MYSTIC pieces.

2. D2 funds (top level) are pools of balancers that pool D1 funds. For example, AVASTR would be a D2 fund that combines three different Avastar D1 input funds (AVASTR-BASIC, AVASTR-RANK-30 and AVASTR-RANK-60). The point of this is to offer more varied exposure without requiring users to hold multiple tokens.

When a new fund is created, the account that sends the transaction is designated as the fund manager. This allows the creator to change fund parameters such as fees, vendor incentives, and NFT eligibility. When the creator has completed changing the fund, he can then "complete" it, which will result in relinquishing his control to increase reliability.

A common misconception is that NFTX is a project for NFT faucets, but most NFT faucets love to browse and trade individual NFTs, so there is no reason for them to package their collections into fungible tokens. However, there are many people who do not have the time or knowledge to trade individual NFTs but would like to enter the NFT markets. These are the target users of NFTX - people trading on Uniswap with top tier blue chip NFTs like AXIE, PUNK & KITTY, not people minting/redeeming their NFTs on the NFTX website. In most cases, the only people minting/purchasing the fund's tokens will be the arbitrageurs. This is similar to the dynamics with WBTC. Most people who trade WBTC do not mint or burn it themselves.

NFTX will only start with D1 tools, so the home page will list fairly specific tools first, but once the top-level D2 tools are created, the home page may shift focus to those tools instead. The idea is for NFTX to be something like a CoinMarketCap or DefiPulse style website, but for the NFT space. Users will be taken to the main page and see metrics for top level funds backed by blue chip NFTs such as CryptoPunks, Axies, CryptoKitties and Avastars. Eventually, the hope is that NFTX will be home to over a hundred top-tier NFT funds, each with real-time price, volume, and TVL displays.

The NFTX Token is a governance token that can be used to vote on proposals and manage the direction of an organization. There will ever be 650,000 NFTX tokens in total.

65,000 NFTX tokens allocated to NFTX founder Alex Gausman. These tokens are on a 5-year linear transfer schedule with no break. The rewards for this transition schedule are unlocked for each block and added to the circulating supply until fully distributed.

390,000 NFTX tokens were distributed during the Source Community Boost, which ran from December 2020 to early January 2021. The tokens were given to early community members through open rewards with various ETH rates, as well as several NFTs. You can find the full crash of this event here.

65,000 NFTX tokens are provided as NFTX DAO liquidity on AMM.

130,000 NFTX tokens are held in the NFTX DAO treasury and are intended to be used as rewards for liquidity growth starting in the first or second quarter of 2021. More information about this program is currently not available.

The fund creation process was inspired by the Balancer pool process. Essentially, the creator of the pool gets "manager" privileges, but can also call a "finalize" function that relinquishes their control. Like balancer pools, NFTX funds also have a termination function, but unlike a balancer, when the NFTX termination function is called, control of the fund is transferred to the NFTX Dao. There are two reasons for this.

The first reason for the Dao to have privileges to manage funds is that in some cases funds need constant management (for example, adding new rights). The second, and more controversial, reason why the Tao gets governance rights is so that we can direct the development platform however we see fit. If funds start to gobble up each other (e.g. multiple funds targeting similar subsets of NFTs), this could hurt the UX of our platform, so in this situation we may decide to shut down all but one fund so that the remaining one can thrive.

The goal of NFTX is to offer one top-tier fund that will receive the most liquidity for every major NFT contract. For example, if someone wants to create an AVASTR-V2 fund that is different from the main AVASTR fund, then that is fine (and actually encouraged), but if we get into a situation where AVASTR and AVASTR-V2 share liquidity in the middle, and there is a simple solution (like merging the differences), then Tao can think of it.

In the long term, NFTX's goal is to become the primary issuer of wrapped NFT funds. This is a potentially huge use case with a legitimate opportunity to one day outshine the existing market cap of all cryptocurrencies combined. Digital land, game items, rental agreements, digital art, digital collectibles, digital lottery tickets, and more can be represented as NFTs. As the ecosystem grows, NFTs will become increasingly difficult to track and tokenized funds will become a necessity for many investors and trading platforms.

In terms of making a profit, it is likely that a 2.5% fee will be charged in the future on all mint transactions and NFTX records. This added value will be mostly absorbed by the arbitrageurs and will essentially cause the fund's tokens to de-peg a little more than usual. For a wrapped token such as WBTC, a 2.5% price difference from regular BTC would be a major UX disadvantage, but for NFT funds (which are by nature an illiquid asset category), a 2.5% price difference would probably not be noticeable.

NFT → ERC20 Loans - D1 fund token minting requires NFT transfer, and in many cases people will want to take advantage of the fund token without giving up ownership of their NFT. These people would rather lock up their NFTs in exchange for a loan (similar to minting Dai with ETH). With an excess of D1 tokens in the NFTX treasury, our platform will be able to provide low interest ERC20 loans to NFT faucets. In addition, these loans will have zero risk of unexpected liquidation because NFTs are always worth no less than the D1 funds to which they are entitled.

Online liquidity- One of the biggest challenges in the NFT space is price discovery. If market makers are not "in the know", it can be difficult for them to determine the real price of an asset. One of the reasons for this is fishing trade, the other is illiquidity and gaps between sales. Getting real-time price information from popular funds largely solves both of these problems. As a specific example, if a trader can verify that PUNK-ATTR-4 is 150% of the price of PUNK-BASIC and that PUNK-ZOMBIE is 60 ETH, then he will be able to determine that a CryptoPunk Zombie with four attributes should be around 150 % of 60 ETH or 90 ETH. After solving this problem, it is not difficult to imagine that NFTX forks into an on-chain liquidity game,

Random packages and gift cards - having a large stock of NFTs opens up a number of possible uses for NFTX. One such possibility is a service that offers randomized packages with different probabilities of different NFTs. Another option is gift cards. Currently, when a user redeems an NFT by burning a fund token, the NFT received is randomly selected, however, we can extend the NFTX smart contract so that (at an additional cost) users can choose the exact NFT they want. . This will be similar to a gift card and will allow recipients to enjoy the process of choosing their own unique items from the NFTX reserves.

While NFTX version 1 is just getting started, improvements are already in place for version 2. Some of these improvements include new features such as smart funds that will have dynamic rule sets. Other improvements are related to security issues that were raised during our audit but were listed due to being considered low. Probably the most pressing issue for version 1 will be the cost of gas, which is quite high and will be considered one of the priority improvements for NFTX v2. Even though most end users (top-tier fund traders backed by blue-chip NFTs) are not affected by the cost of the platform, this can still be a significant issue for arbitrageurs and casual users who mint or redeem.

If there is one important takeaway for readers, it is that NFTX is completely community driven. This document outlines a vision for the future, but that future is entirely dependent on what NFTX token holders decide to implement. All assets received from the community will be treated as part of the NFTX treasury and will be under the control of token holders. The intention is to use most of the treasury to provide liquidity for the fund tokens as well as the NFTX token, however make no mistake, these are treasury assets and can be used to cover expenses at any time if the DAO chooses to do so.

NFTX's current mission is to become a DeFi black hole for NFT assets. We will strive to remain objective on which NFTs we give away preferentially, focusing on what is best for the long-term appreciation of the NFTX token. However, we will also place great emphasis on the principles of decentralization and strive to work with like-minded organizations.

The only potentially unpopular views of the NFTX DAO that community members should be aware of are (A) the bias against ETH and Ethereum and (B) the bias against PUNK and CryptoPunks as a store of value for the NFTX DAO treasury.

When in doubt, we will store the wealth of our organization in these assets. And, unless there is no other option, we will always use Ethereum. Treasury allocation could shift towards a more diversified basket of blue-chip NFTs such as Axies, Avastars, CryptoKitties, Autoglyphs and Joyworld Joys' as more community members participate in DAO operations and the diversification proposal gets voted through DAO governance.