NFTX

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Discover NFTX's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is NFTX?

NFTX is a cryptocurrency operating on the Ethereum platform that allows users to create, mint, trade, and earn yield with NFT-backed tokens. It enables the creation of ERC20 tokens backed by NFT collectibles, providing a platform for NFT index funds and liquidity provision. The NFTX token supply is 650,000, with a significant portion allocated for community governance and liquidity provision.

How is NFTX used?

NFTX is a cryptocurrency project that allows users to create and trade ERC20 tokens backed by NFT collectibles. These tokens, called funds or vaults, are fungible and composable, making it possible to create and trade funds based on popular NFT collections such as CryptoPunks, Axies, and CryptoKitties.

Key Features and Uses
  1. NFT-backed Tokens:

    • NFTX enables the creation of ERC20 tokens that are backed by NFT collectibles, providing a way to trade and own fractions of NFTs.
  2. Fungible and Composable:

    • These tokens are fungible, meaning they can be exchanged for one another, and composable, allowing them to be combined into more complex financial instruments.
  3. Trading and Liquidity:

  • Users can buy, sell, and swap NFTs instantly on the NFTX marketplace, earning yield by providing liquidity for popular NFT collections.
  1. Vault Operations:

    • The three primary vault operations are minting (sending NFTs to a vault and receiving vTokens), redeeming (burning vTokens to receive NFTs), and swapping (exchanging NFTs in a wallet for NFTs in a vault).
  2. Fees and Yield:

    • Vaults charge fees in ETH for buying, selling, and swapping NFTs, which are distributed to inventory stakers and liquidity providers. Inventory stakers receive 20% of the ETH fees, while liquidity providers earn 80% of the vault fees and additional AMM trade fees.
  3. AMM and Premium Fees:

  • NFTX employs an Automated Market Maker (AMM) system with vToken/WETH pairs and two fee tiers. Premium fees, ranging from 500% to 0% over 10 hours, are designed to incentivize liquidity providers, with 90% of the proceeds going to the original seller.
  1. Target Users:
    • NFTX is primarily designed for users who want exposure to NFT markets without directly trading individual NFTs. Arbitrageurs also play a key role in minting and redeeming fund tokens.

Overall, NFTX provides a platform for users to access and trade NFT markets in a more liquid and fungible manner, while also offering yield opportunities through inventory staking and liquidity provision.

How do I store NFTX?

To store NFTX tokens, you can use a hardware wallet like Ledger or Trezor. These wallets are designed for cold storage, which means they are offline and not connected to the internet, making them more secure against hacking attempts. You can transfer your NFTX tokens to the hardware wallet and manage them securely. Additionally, you can use software wallets like MetaMask, Trust Wallet, or Enjin Wallet, which are digital wallets that can store NFTX tokens. However, software wallets are less secure than hardware wallets as they are connected to the internet and can be vulnerable to hacking attempts.

How to buy NFTX?

To buy NFTX tokens, follow these steps:

  1. Access a Decentralized Exchange (DEX): Go to a DEX like Uniswap, where you can trade NFTX tokens.
  2. Set Up a Web3 Wallet: Download and install a Web3 crypto wallet like Metamask or an App wallet like Trust Wallet.
  3. Find NFTX Tokens: Search for NFTX tokens on the DEX and select the desired token.
  4. Place an Order: Enter the amount of tokens you want to buy and the price you are willing to pay.
  5. Confirm the Transaction: Once your order is matched, confirm the transaction and pay the required gas fees.

Remember to check the current market price and gas fees before making your purchase to ensure you get the best deal.

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History of NFTX

The history of NFTX (NFTX) began in 2020 during the DeFi summer. Alex Gausman, the founder, initially started working on a project called PunkFarm, which focused on creating a single floor fund for CryptoPunks. Over time, he expanded the scope to allow anyone to create their own vaults and added features such as customized eligibility lists for specific NFT subsets.

In December 2020, Alex hired LevelK to perform a security audit on the contract. Despite some low-level concerns, no major exploits were found, and the audit was publicized. The NFTX Dao was set up using Aragon, first on the Rinkeby testnet and then on the Ethereum mainnet. This Dao controls the treasury and the ability to upgrade the NFTX protocol contracts.

The community raise, where people could supply high-quality NFTs in exchange for NFTX governance tokens, helped bootstrap the treasury. This treasury is primarily used for providing liquidity to NFTX products on decentralized exchanges like Sushiswap.

NFTX officially launched in 2021, offering a platform for creating ERC20 tokens backed by NFT collectibles. These tokens, called funds, are fungible and composable. The platform allows users to deposit their NFT collections into vaults, minting fungible ERC20 tokens that can be traded on decentralized exchanges.

Since its launch, NFTX has evolved to include features like an AMM system, ETH-based vault fees, and dynamic premium fees. The platform aims to provide high-quality services to the NFT marketplace, including indexing projects and offering liquid markets for trading NFTs.

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How NFTX works

NFTX is a platform that allows users to create and trade ERC20 tokens backed by NFT collectibles. These tokens, called funds, are fungible and composable, making it possible to create and trade funds based on various NFT collections such as CryptoPunks, Axies, and Avastars. The platform aims to provide liquidity and financialization for the NFT market.

Key Features
  1. NFT-Backed Tokens: NFTX creates ERC20 tokens that are backed by NFT collectibles. These tokens are called funds and are fungible and composable, allowing users to trade them on decentralized exchanges like Uniswap.

  2. D1 and D2 Funds: There are two types of funds on NFTX: D1 funds, which have a 1:1 backing between a single NFT contract and an ERC20 contract, and D2 funds, which are Balancer pools that combine D1 funds to offer more diverse exposure.

  3. Fund Management: When a new fund is created, the account that sends the transaction is designated as the fund manager. The fund manager can modify fund parameters like fees, supplier incentives, and NFT eligibility before finalizing the fund, which gives up their control to increase trustlessness.

  1. Liquidity Provision: NFTX includes features like liquidity provision and inventory management using ERC721 tokens. This allows users to provide liquidity for popular NFT collections and earn yield.

  2. Concentrated Liquidity AMM: NFTX V3 includes its own concentrated liquidity Automated Market Maker (AMM), a forked version of Uniswap V3, which supports proportional vault fees to liquidity providers (LPs).

  3. Vault Fees: Vault fees are now in ETH, and there are premium fees that work like a Dutch auction for newly deposited NFTs. These fees are designed to incentivize liquidity provision and improve the overall user experience.

  1. Staking and Rewards: LPs can stake their SLP tokens on NFTX to capture protocol fees. Staking rewards are currently turned off but will be activated in the future.

  2. NFT Flash Loans: NFTX V2 includes the ability for ERC20 flash loans, similar to Maker's flash mint module, allowing for more flexible and efficient use of NFT-backed tokens.

Security and Governance

NFTX uses an upgradeable proxy controlled by the NFTX DAO (on Aragon), which allows NFTX token holders to change the NFTX smart contract if they reach consensus. The NFTX token supply is 650,000, with a distribution that includes allocations for founders, NFT contributions, ETH contributions, liquidity, and farming.

Risks and Precautions

While NFTX has been reviewed by Code Arena and multiple experienced Solidity developers, there are still smart contract risks involved. Users are advised to be cautious and not risk any capital they cannot afford to lose in case of an exploit. The NFTX DAO plans to migrate treasury assets gradually out of caution, and users are recommended to do the same during the early weeks of a new protocol release.

Overall, NFTX aims to provide a comprehensive platform for NFT-backed tokens, offering liquidity, financialization, and a range of features to enhance the NFT market.

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NFTX's strengths

The token NFTX (NFTX) is not explicitly mentioned in the provided sources. However, the sources discuss the strengths of NFTs and FTX Token (FTT) in general:

  • FTX Token (FTT):

    • Strengths include allowing users to receive trading fee discounts on FTX and OTC rebates based on their holdings of FTT in a tiered system.
  • NFTs:

    • Strengths include:
      • Accessible investment opportunities: NFTs enable anyone to invest in a digital asset by providing a convenient and easily transferable means of ownership.
      • Secure and verifiable ownership: NFTs, being based on blockchain technology, offer a tamper-proof and transparent way to establish and verify ownership.
      • Fractional ownership: NFTs allow for the division of ownership and efficient trading among numerous investors, improving market liquidity.
      • Market efficiency: Tokenizing physical assets can streamline sales processes and eliminate intermediaries, allowing sellers to connect directly with their target audiences.
      • Investing opportunities: NFTs can be used to streamline investing in various industries, such as fine wine and real estate.
      • Security: NFTs offer enhanced security by providing unique, non-transferable identities, making it difficult for assets to be pirated or stolen.
      • Fractionalized ownership: NFTs enable fractionalized ownership, allowing multiple people to purchase a share of a physical asset.

These strengths highlight the benefits of NFTs and FTT in terms of accessibility, security, and market efficiency.

NFTX's risks

NFTX, a cryptocurrency project focused on non-fungible tokens (NFTs), faces several financial risks. These risks are inherent to the NFT market and can impact the value and security of NFTX investments.

Counterfeiting and Fraud

NFTX is susceptible to counterfeiting and fraud, as criminals can create fake NFTs or manipulate existing ones to deceive buyers. This can lead to financial losses for investors who purchase these fraudulent NFTs.

Money Laundering

NFTX, like other NFT platforms, is vulnerable to money laundering. Criminals can use NFTs to launder proceeds from illegal activities, taking advantage of the anonymity and lack of regulation in the digital asset space.

Lack of Regulation

The lack of clear regulations and standardized practices in the NFT market increases the risk of fraud, theft, and other illicit activities. This lack of oversight can make it difficult for investors to verify the authenticity and value of NFTs, leading to potential financial losses.

Market Volatility

NFTX is exposed to market volatility, as the value of NFTs can fluctuate rapidly. This volatility can result in significant financial losses if investors buy NFTs at high prices and then see their value drop.

Security Risks

NFTX, like other blockchain-based projects, is susceptible to security risks such as hacking and technical glitches. These risks can compromise the integrity of the NFTs and lead to financial losses for investors.

Centralized Risk

NFTX may rely on centralized services for metadata storage, which can create risks if these services are compromised or shut down. This can result in the loss of access to NFTs and their metadata, impacting their value and usability.

Overleveraging

The use of high leverage ratios in NFT trading can create a highly volatile environment, increasing the risk of significant financial losses for investors.

Regulatory Crackdown

Increased regulatory scrutiny in the wake of events like the FTX collapse may lead to stricter regulations and enforcement, which can impact the value and usability of NFTX.

These financial risks highlight the importance of careful investment analysis and risk management when investing in NFTX or any other NFT project.

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Did NFTX raise funds?

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NFTX’s team

  • Alex: Founder of NFTX, responsible for building the initial version of the project, which began as PunkFund and expanded to allow for permissionless creation of vaults.
  • ChopChop (Chop): First core contributor to the NFTX DAO, involved in setting up early communication channels and creating educational content.
  • Jackieboi (Jack): Joined the team for client-side development, allowing for faster iteration of the product.
  • Quag: Handles infrastructure and UI development, referred to as a set of identical twins working around the clock.
  • Toes: Assists the DAO with support, documentation, business development, and governance calls.
  • Aeto: Also assists the DAO with support, documentation, business development, and governance calls.

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