NFTX Defi Coin 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.
NFTX Defi Coin 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.
LP and stake minted vTokens to earn yield rewards
Better distribution and price discovery for NFT projects
Instantly sell any NFT by minting it as an ERC20 and swapping via Sushiswap
Increased liquidity for NFT investors and speculators
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.
How does it work?
Vaults can be created by anyone for any NFT asset on Ethereum. Once a vault has been created, any user can then deposit eligible NFTs into the vault to mint a fungible NFT-backed token referred to as an “vToken”.
Anyone can deposit NFTX Defi Coin into an existing vault (or one they have created) in order to mint a fungible vToken that represents a 1:1 claim on a random NFT from within the vault.
Users can then pool their minted vTokens in Automated Market Makers (AMMs) like Sushiswap to create a liquid market for other users to trade. With liquidity and trading volume established, the NFT-backed vToken enters into price discovery and a “floor price” is discovered.
NFTX Defi Coin Mask vault allows any Hashmask to be deposited, however other vaults use an eligibility list that only allows a specific sub-category of NFTs to be deposited. For example, the Kitty Gen 0 vault has an eligibility list that includes only Kitties whose metadata is Generation 0. Other Kitties can not be deposited into this vault.
Who Benefits From NFTX?
NFTs in their basic form do not earn yield. However, when they are used to mint vTokens they can tap into the world of decentralized finance. Put simply, collectors can use NFTX to unlock more value from their NFTs:
Earn protocol fees
Earn trading fees as a liquidity provider
Farm with stable coins using vTokens as loan collateral
By launching on the NFTX protocol, content creators are able to earn protocol fees in perpetuity whilst also improving the reach and fairness of distribution:
Earn protocol fees
Distribute NFTs via an AMM in the form of vTokens
Create instantly liquid markets for new content
NFTs are typically highly illiquid and difficult to price. NFTX makes speculating and investing in the NFT market a far simpler process:
Access the most liquid markets for NFTs
Track the price of particular categories of NFT
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 Defi Coin 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.
Not All The Websites Which Listed In Top List Are 100% Safe To Use Or Investment. We Do Not Promote Any Of Those. Due Diligence Is Your Own Responsibility. You Should Never Make An Investment In An Online Program With Money You Aren’t Prepared To Lose. Make Sure To Research The Website. So Please Take Care Of Your Investments. And Be On The Safe Site And Avoid Much Losing Online.
The Information Presented Here Does Not Constitute Investment Advice Or An Offer To Invest. The Statements, Views, And Opinions Expressed In This Article Are Solely Those Of The Author/company And Do Not Represent Those Of Coinworldstory. We Strongly Advise Our Readers To Do Your Own Research (DYOR) Before Investing In Any Cryptocurrency, Blockchain Project, Or Ico, Particularly Those That Guarantee Profits. Furthermore, Coinworldstory Does Not Guarantee Or Imply That The Cryptocurrencies Or Projects Published Are Legal In Any Specific Reader’s Location. It Is The Reader’s Responsibility To Know The Laws Regarding Cryptocurrencies And Icos In His Or Her Country. Please Respect Your Country Law & Take Advice From Your Advisor .
One of Coinworldstory's longest-tenured contributors, and now one of our news,ico,hyip editors, Verna has authored over 6900+ stories for the site. When not writing or editing, He likes to play basketball, play guitar or visit remote places. Verna, to his regret, holds a very small amount of digital currencies.