NFT Focused Index Proposal

As most everyone is likely aware, the NFT market on Ethereum (and elsewhere) is exploding, with many speculating it could rise in popularity similar to DeFi’s recent ascent. Indexed is in a great position to capitalize on the NFT segment, as there are many people who do not want to collect NFTs but do want to speculate on their value.

An NFT-focused index could be comprised of multiple asset types:

  1. governance tokens
  2. tokens used within a project’s ecosystem
  3. NFTs themselves

Right now I am aware of three NFT projects that could fit into an index. There are likely others that are already in the market, more in stealth phase and even more that may be dropping tokens to decentralize in the future (looking at you OpenSea).

  1. Rarible
  2. NFTX
  3. Polyient Games

All three of these have governance tokens that could be included: $RARI, $NFTX and $PGT.

What could make this index very interesting are the unique characteristics of the NFTX and Polyient Games ecosystems (maybe Rarible as well but I am least familiar with their platform).

NFTX’s main products are also index funds but they are backed by NFT collectibles (ERC-721) instead of ERC-20 tokens. They are specifically designed to be used in other defi applications to allow for better NFT price discovery. For instance, funds can be created by supplying CryptoPunks or Axies directly. These funds backed by NFTs are then combined to form top-level funds. From their documentation

There are two types of funds on NFTX:

D1 funds (input) have a 1:1 backing between a single NFT contract and an ERC20 contract. For example, if Alice owns 2 PUNK-ZOMBIE, that means she can redeem exactly two random zombie CryptoPunks at any moment. Another example would be Alice owning 1 AXIE-MYSTIC-2, giving her the ability to redeem one random Axie with two Mystic parts.

D2 funds (top-level) are Balancer pools which combine D1 funds. For example, AVASTR will be a D2 fund which combines three different D1 Avastar input funds (AVASTR-BASIC, AVASTR-RANK-30 & AVASTR-RANK-60). The point of this is to offer more diverse exposure without requiring users to hold multiple tokens.

The index could use D1 funds only, D2 only or both. It could even allow the minting of the index tokens by directly supplying NFTs via the Indexed interface. For example, such as supplying CRV to get CC-10, you could supply a CryptoPunk to get this new NFT index token.

In the case of Polyient, they have a DEX (Uniswap clone) where most of the liquidity resides for their tokens, so an integration would be necessary. What makes them unique is they have created NFTs called PGFKs (Polyient Games Founder’s Keys) that provide rewards & access within their ecosystem. Further, they have developed what they call a “Particle Bridge” Particle Bridge - Polyient Games that allows the conversion of ERC-721 PGFKs to ERC-20 fungible tokens xPGFK.

The PGFK-xPGFK combo is a first of its kind, where a digital asset exists in two simultaneous states, each with unique use cases and reward structures. xPGFK will be available for trading via a decentralized swap protocol that will be accessible only within the Polyient Games Marketplace.

Use cases include:

  Main transactional unit for all purchases made within the Polyient Games Ecosystem platform
  Main payment option for NFT pre-sales and auctions conducted within the PG Marketplace
  Main trading pair for all fungible tokens listed on the PG DEX

Therefore, this index could include xPGFK’s and the Indexed interface could enable the minting of the index from the NFT version PGFK directly (similar to the NFTX minting).

Obviously this is more complex than a normal index but I think it would open up a lot of opportunities by targeting an emerging asset class such as NFTs. I’d love to hear other’s thoughts on the viability of this idea and if it’s worth expanding upon. Thanks!


NFT based index’s are something I have been interested in for a long time, since the advent of the first crypto-kitties wrapper contracts, and the sort of hybrid tokens like uniswaps $SOCKS.

The simple option is an index of the fungible governance tokens, as these would fit simply into the already established framework, but these are still relatively thin on the ground at the moment, and are far from mature yet.

The other option is direct NFT integration, given the nature of the structure of the contracts we use almost certainly via wrappers. The mooted problem with these is that they attempt to force fungibility onto what is not fungible - no two cryptopunks are the same, and it reduces all punks in the wrapper, assuming the existence of a burn function, to the lowest rarity price floor items, not allowing exposure to any of the higher value rarities and options.

The item specific tokens NFTX provide are a good way around this, fractional ownership of specific items basket’d in a simple index.

The actual structure of any NFT NDX index would have to be very carefully managed. It would likely require a novel approach to weighting, and care must be taken not to distort underlying markets - NFT’s tend to be far less liquid than their fungible counterparts, and this could easily create price squeezes if we aren’t careful.

Once the more immediate items on the list of “things to do” are taken care of I would love to discuss this further, NFT’s are of course not just “ART” or “game specific utility items” but an incredibly broad range of projects, tokens and ideas all stuck under the same convenient umbrella, So I think some input from the wider NFT community would be invaluable in the proper structuring of any such index.


We can also use to wrap high value NFTs and create indices based on those, say a nart5 for top 5 NFT art wrapped tokens that are erc20 tokens and so can just use current controllers, dont think that nftx wrappers are DAOs so not sure how the token collateralizes the NFT ownership but Alchemy would allow the index to vote on the DAO, so ENS domains could actually be like leased out to geberate further rev rather than just own the NFT.

Could we instead of focusing on specific NFT, could this index be NFT protocol projects like Enjin, Superfarm, REVV, and other projects that are in the space. Instead of a specific NFT like PUNK-ZOMBIE, we have the project that creates it.

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An NFT index is a good idea. I would not include actual NFT in this index though, they are also harder to directly buy via Uniswap. I do see e.g. interest for e.g. having exposure to “ART” NFT of various artists but i would prefer to have this in a seperate index. I’m also not sure how feasible that is.

Tokens i would like to see included are

Enjin : token is used to back NFTs that are used for gaming, certificates, fashion etc…

Rarible: marketplace for NFT

Axs: Axie infinity game

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Agreed, it is probably a good idea at this stage of the nascent NFT market to make the first index as simplified as possible. Not only would that protect investors but also easier on the development front.

Therefore, we could have this index focus specifically on NFT governance tokens. $RARI, $PGT, $NFTX and $AXS would fit that criteria. I will do some research for others - anyone have any suggestions?

We could have a separate discussion around ERC-20 NFT derivatives, as I think that is a fascinating use case. But the market needs to mature before we get there.


I personally love what Aavegotchi is doing. Their DAO governance token is $GHST (GHST Token -- Aavegotchi Wiki). Aavegotchi is a “pet” rearing/breeding game. Each Aavegotchi is an ERC721 NFT and have different rarity scores based on various modifiers. One of the more interesting feature is that players can stake collateral on their Aavegotchi hence giving them intrinsic value. The collateral will be able to earn interests from the Aave platform.

It is worth a look if you are looking for more tokens to be added to the index.


Agreed on this first point: an “NFTG” pool focused purely on the governance tokens would be the simplest way forward to start. I don’t think we’d need to be too concerned about the weighting mechanisms in that case - but the minute we started playing around with NFTs themselves, the thinking hat would need to go on.

Thanks for proposing this.


Man this sounds like a good idea.

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CoinGecko has an NFT category:

Many of these are the product tokens or the tokens used as currency within their specific ecosystem. Of the governance tokens I’ve identified, most are very illiquid, as one would expect at this stage of the market.

Therefore, I suggest we start with a small index that can be expanded as the market matures. For instance, OpenSea is likely to have a token and perhaps others, such as Zora, may as well. And those would be (depending on the token model of course) great candidates since they already have significant market share and exposure.

  • NFT Gov tokens with sufficient liquidity
    • AXS
    • NFTX
    • RARI
  • NFT Gov tokens with low market cap / low DEX liquidity
    • PGT (liquidity is on a uniswap fork split between ETH and native ecosystem token pairs)
    • GHST (most liquidity is on Binance)
    • MUSE
    • MONA
How should the NFT Governance Index be initially allocated?
  • AXS/NFTX/RARI to start
  • AXS/NFTX/RARI + 1 or 2 less liquid low caps
  • Wait for more gov tokens before launching

0 voters

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Support the concept and would be happy to collab

I have been considering proposing something similar and love to see this being pushed forward.

My recommended basket, optimizing for a) liquidity and b) expected upside.

  • ENJ
  • MANA
  • AXS
  • SAND
  • NFTX

Smaller caps worth considering.

  • RARI
  • GHST
  • TVK
  • REVV
  • PGT

Would suggest starting with a basket of the larger caps and creating an expanded basket if successful (i.e. a DEGEN version of gaming / nft tokens). Including low caps with low liquidity in an index expected to garner significant TVL can be troublesome.

Another option would be to include something like all 10 of the above, but weight heavily to the larger caps.

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I was compelled to propose this being an invested NDX holder but also because I wanted broad exposure to the NFT market (and expect others do as well). It’s a different type of exposure with those protocol/utility tokens that are used, in many instances, to purchase items within an ecosystem (eg. $SAND and $MANA).

Personally I would rather hold the tokens that aim to capture value from the usage of the ecosystem, as those likely hold more upside potential. So I would advocate for keeping them separated in different indices.

Which brings up an interesting potential long term vision… I know there has been some discussion of a “meta index” and we could get there with NFTs as well. A “NFT Meta Index” could be composed of multiple different NFT indices:

  • NFT Governance Token Index
    • $NFTX, $RARI, $AXS, $PGT
  • NFT Protocol Token Index
    • $ENJ, $SAND, $MANA
  • NFT Derivative Token Index
    • $PUNK, $MASK, other future tokenized NFTs

So we could just focus on the first one and then move on to the rest after that successful launch. However, if the majority disagree and think a large bundle of different types is a good idea, I will concede :slight_smile:


I suppose it just feels like a rather arbitrary separation, given that AXS and SAND will have very similar mechanics.

PGT + RARI have low vol/liq so if included alongside AXS and NFTX would recommend it’s not at the same weight.

Possibly makes more sense to have an “NFT” index and a “Gaming” index.

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Consider adding to the NFT index as a small cap, to be honest there are very few large even medium cap NFT projects.

For more info - Doki Doki Finance – Medium


+1 for DokiDokiFinance. What they are building is extremely innovative and unique from other NFT projects. Their gamified NFT machines are essentially acting as a launchpad for new NFT artists to earn profits for their work.

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I would focus on the NFT platforms more than individual games, despite marketcap. Or weight the index accordingly to include both. On platform side, $DOKI / $AZUKI should be included. $DOKI is Top 20 and $AZUKI Top 35 on Coingecko NFT index. Combined gotta be near Top 15. It’s on the way up with giant NFT content partnerships in the works. Plus, it actually facilitates the entire NFT space with its gachapon concept, not just retro Japan brand. If you don’t add it now, you’ll be adding it shortly, due to the deflationary attributes for both tokens. Check out the Dokinomics. Pretty cool.

Why not have both types?

DOKI DOKI should be supported in the NFT index. DOKI is the YFI of NFTs

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Two other suggestions for the index: