Application for the NFTI Index

Author: ChopChop
Summary: I’m formally proposing the launch of an NFT Meta-Index as part of the Sigma pilot program.

With this proposal out there, I’m aware of the need to have a minimal amount of liquidity available on Uniswap for it to work. As the NFTX DAO LPs exclusively on SushiSwap, this will be a point to tackle before launching NFTI.

The NFT Index (NFTI)

The NFT Index/category is a passive index of NFTX-based funds representing specific NFT projects. Initially this index will start with a narrow scope and include the five most popular and liquid funds on NFTX:

Description:

NFTX is a platform for making ERC20 tokens that are 1:1 backed by NFT collectibles. These tokens are called funds, and (like all ERC20s) they are fungible and composable. With NFTX, it is possible to create and trade funds based on your favorite collectibles such as CryptoPunks, Axies, CryptoKitties, and Avastars, right from a DEX like Uniswap. In other words, NFTX creates financial instruments from NFTs, making them compatible with the wider DeFi ecosystem.

Indexed.Finance on the other hand is a platform that creates passive portfolios of ERC-20 tokens held in AMMs (liquidity pools). This is why the two projects are highly compatible.

As its name implies, the NFTI aims to give its holders broad exposure to the NFT market sector. The NFTI will evolve along with the NFT space and always incorporate the most popular and mature projects. It will offer broad exposure to investors who don’t have the time or knowledge to dive deep into the NFT space themselves. As such, it will include 5 funds at launch but it can be modified anytime after. The pool will maintain capitalization-root-weighting in order to weigh more evenly and not skew the pool almost entirely to one fund e.g Punk-Basic.

All future index components will be selected with input from NFTI index holders and the NDX community. Besides the NFTX and NDX community, we expect this index to attract a lot of interest from the wider NFT and DeFi community and welcome any feedback and involvement.

Governance

Governance will be handled by Indexed Finance’s existing framework including the forums and Discord.

The Sigma committee will add or remove tokens from the index or alternate list regularly based on community feedback. Examples of changes may be adding new tokens if the alternate list is in danger of being emptied or adding or removing tokens from the index due to material changes in tokenomics or project direction. Community members can propose adding or removing a token from the active index or the alternate list at any time.

Initial value of NFTI

We will target an initial price of $5 for the NFTI token. During the bootstrapping phase, 100 tokens will be crowdfunded to reach a total value of $500 (or $5 per token). Once NFTI reaches its target value, the pool will be deployed giving anyone the ability to mint new NFTI tokens.

Token’s criteria

The index has the following criteria for inclusion:

  1. The token has a market cap ranging from $1 million to $100 million (as calculated by a rolling 14-day TWAP on Uniswap).
  2. The token represents an NFT collectible (not a governance token for an NFT project)
  3. There is at least $50,000 of liquidity for the token on Uniswap.
  4. No major vulnerabilities have been discovered in the token contract.
  5. The token’s supply can not be arbitrarily inflated or deflated maliciously.
  6. The control model should be considered if the supply can be modified through governance decisions.
  • The token does not have transfer fees or other non-standard balance updates.
  1. The token meets the requirements of the ERC20 standard.
  • Boolean return values are not required.

The NFTI Index Composition

Market caps pulled March 16, 2021.

1. Punk Basic

TVL: US$ 4.617.446
Coingecko Listed: Punk Basic (PUNK-BASIC) - koers, marktkapitalisatie, grafiek en informatie | CoinGecko
Link to Gallery: https://gallery.nftx.org/funds/punk-basic/

Punk-Basic is an ERC-20 representing the now famous CryptoPunks from LarvaLabs. The CryptoPunks are 10,000 uniquely generated characters. No two are exactly alike, and each one of them has a single owner on the Ethereum blockchain.

Website: https://www.larvalabs.com/cryptopunks

2. Mask

TVL: US$ 1,434,605
Coingecko Listed: NFTX Hashmasks Index (MASK) - koers, marktkapitalisatie, grafiek en informatie | CoinGecko
Link to Gallery: https://gallery.nftx.org/funds/mask/

Hashmasks is a living digital art collectible created by over 70 artists globally. It is a collection of 16,384 unique digital portraits developed by Suum Cuique Labs from Zug, Switzerland. Hashmasks can be given names by their owners using name changing tokens (NCT).

Website: https://www.thehashmasks.com/

3. Axie Origin

Not launched on AMM yet. ETA 1-2 weeks

TVL: US$ ?
Coingecko Listed: N/A
Link to Fund (pre-launch): NFTX — enabling NFT Index Funds

Axies are fierce creatures that love to battle, build, and hunt for treasure! Build up a collection and use them across an ever expanding universe of games! Axie players can earn tokens such as DAI, KNC, and SLP which can be converted easily to ETH.

Website: https://axieinfinity.com

4. Kitties Gen 0

Not launched on AMM yet. ETA 1-2 weeks

TVL: US$ ?
Coingecko Listed: N/A
Link to Fund (pre-launch): NFTX — enabling NFT Index Funds

CryptoKitties is a game centered around breedable, collectible, and oh-so-adorable creatures we call CryptoKitties! Each cat is one-of-a-kind and 100% owned by you; it cannot be replicated, taken away, or destroyed.

Website: https://www.cryptokitties.co

5. Avastars Basic

Not launched on AMM yet. ETA 1-2 weeks

TVL: US$ ?
Coingecko Listed: N/A
Link to Fund (pre-launch): NFTX — enabling NFT Index Funds

Avastars are generative characters for the metaverse. Each one is unique and has their art and metadata stored on-chain. Avastars come licensed for use commercially by their owners. Collect Avastar Primes to later make Replicants.

Website: https://avastars.io


I’d be excited to bring this index to life together with the NDX community and expect it to get a lot of attention from the NFT, NFTX and wider DeFi communities.

Welcoming any feedback.

11 Likes

I personally love this idea. There’s going to be endless debate on the actual tokens in the index, so I’m not going to touch on that, but the requirements and idea of the index is perfect. Nothing I would change.

1 Like

How does the value of the underlying NFTX tokens stay “pegged” to the values of the NFTs themselves? Is it just through ARB? Will we be able to mint “NFTI5” with Eth? I guess I’m trying to figure out how if the index attracts good volume I’d be worried that could increase the value of the NFTX tokens beyond their actual NFT holdings.

Basically I need to do some research. I held some NFTX and looked into it some but haven’t held them for a little while and am not following as closely.

Sounds great though.

This is the single biggest ask I see across discords… “how do I invest in an index that gives me exposure across the bluechip NFT’s”. This would make the answer so much more simple… Here’s a link to the NFTI Index.

For NFTX funds that is correct. If the value of the token goes up or down disproportionate to the floor price, people mint/redeem NFT’s to balance it out.

1 Like

Great idea and good proposal !
This will bring light on the capabilities of Indexed Finance to create indexes requests by users when there is a demand.
Important to show the agility of the project.

Am completely down, but have 1 concern, we are dedicating a general name to a specific brand, as this is through sigma thats fine, but the name should reflect that these are for NFTX pools, so either call it The NFTX NFT Index or NFTX Index (NFTX, XNFT, NFTXI), or can call it NFTI but the name needs to reflect this is a specific project. We want indices to be project unbiased going forward as much as possible and agnostic and open to all protocols, cause thats what indices are about.

I think this is a step forward in the right direction. Alot of people have hard time conceptualising and accepting the whole narratives around NFTs… this will really help both veterans/newbies easily get access to quality NFT projects in a much efficient way…

Am all for it…

Love the idea, full support for this to diversify the investor reach and scope of indexed finance.

1 Like

I am in favor of this proposal. Any index fund should have underlying assets with proven value, and all of the NFTX funds that make up this token have regular sales and are in the Top 50 Rankings on OpenSea. This is a project that should have a great market fit, as people are always asking for an index that provides exposure to a basket of NFTs.

To my knowledge, there isn’t another NFT index that is backed by a variety of different NFTs offered in the current market, so Indexed Finance could do well with NFTI.

1 Like

great idea.am in favor of this proposal.